ICAI Submits Representation for Waiver of Penalty of TAR & other Forms till 31st Mar 2022 for AY 2021-22

The Institute of Chartered Accountants of India [ICAI] has submitted a representation on 6th January 2022 to Chairman, Central Board of Direct Taxes [CBDT] requesting to consider waiver of penalty and other consequences for furnishing of Report of Tax Audit under any provision of the Income-tax Act, 1961 for the A. Y. 2021-22 after January 15, 2022.

This is because of the outbreak of the pandemic and consequently, taxpayers are finding difficulties in completing data for completing accounts, confirmations, reconciliation, and preparing inputs for compiling tax audit reports.

Further, issues like the non-availability of Form No. 3CEB and difficulties in filing forms like 10C and 10B are still continuing. Further, considering the current situation of lockdowns and extremely fast spread of Omicron/COVID19 and consistent technical glitches being faced in the operation of the new portal, compliance is meeting with hindrances.

As on the even date, certain forms like Form No. 3CEB are not available on the IT Portal. In filling up the other forms, difficulties are encountered. As regards, certain other forms like 10C, 10B, difficulties are still continuing.

Further, considering the current situation of lockdowns and extremely fast spread COVID19 and consistent issues being faced in the operation of the new portal, compliance is meeting with hinderances.

In the matter of audits including tax audits, the ICAI members have onerous responsibility to maintain and enhance quality of reports. The Government is well aware that the Institute has the responsibility of ensuring and enhancing the quality of services provided by its members to clients and other stakeholders. In fact, the prime objective of tax audit is to assist the assessing officer to determine income from business or profession. It is also necessary to emphasize for your kind appreciation that in the context of audit requirements, the Chartered Accountants are also the stakeholders.

The current situation of the country is well known to all. On a daily basis, stricter restrictions are being imposed by various Governments/authorities so as to reduce and control the spread of Covid19 virus eg States like Delhi, Maharashtra, Andhra Pradesh etc. have imposed strict weekend curfew as well as night curfew. Similar conditions are prevailing in almost all parts of the country currently. The Government is also of the view that the virus is spreading at an unprecedented pace and 3rd Covid wave has officially started in India. Almost lockdown type situations are prevailing in the country.

Tax Audit also involves discussion & consultation between the clients & staff on one hand & CA & its team on the other hand. This process has been restricted from past several months due to restrictions following pandemic.

Due to lock-down situation, there is almost no public transport for employees to travel to and fro office. This has paralysed, albeit partially but substantially, functioning of Government offices including income tax.

Under the circumstances, the adherence to the extended due dates may not be possible. Majority of the assessees would be unable to meet the extended time-line(s) w.r.t various compliances under the Income-tax law, albeit involuntarily due to pandemic.

It may kindly be appreciated that due to current extra ordinary circumstances, authorities like MCA and GST from Central Government & authorities for cooperative societies & charitable trusts etc. from State Government have already extended the due dates of compliances under respective Statutes
suitably to ease compliance burden of concerned. It is therefore necessary to take cognizance of the genuine difficulties faced by tax payers and provide due relief. CBDT in Taxpayers’ Charter wherein the ITD is, inter alia, committed to provide timely decisions and reduce cost of compliance to the taxpayers.

Therefore, the ICAI humbly requested that the penalty and other consequences should be waived off for filing tax audit reports and other reports/certificates for AY 2021-22 till 31st March, 2022.

Copy of the Representation can be Downloaded from Below Link