Tax Professionals Raise Alarm Over Delay in ITR Utility Release: AGFTC and ITBA Submit Representation to Finance Minister

Two of Gujarat’s leading professional bodies, the All Gujarat Federation of Tax Consultants (AGFTC) and the Income Tax Bar Association (ITBA), have jointly submitted a detailed representation to Union Finance Minister Smt Nirmala Sitharaman on July 10, 2025. The letter highlights serious concerns over the delay in the release of Income Tax Return (ITR) utilities for Forms ITR-2, 3, 5, 6, and 7 for the Assessment Year 2025–26.

The associations acknowledged the Ministry’s timely extension of the ITR filing due date for non-audited assesses to 15 September 2025. However, they expressed concern that, despite the availability of TDS and AIS/TIS data on the e-filing portal, the utilities for filing more complex ITRs remain unavailable even as of early July 2025. This, they stated, is causing immense difficulty for tax professionals, SMEs, and corporate entities who are either in the process of or preparing for return submissions.

AGFTC, established in 1992 and comprising over 2,000 professionals across Gujarat, and ITBA, formed in 1947 with more than 1,100 members in Ahmedabad, emphasized that this delay disrupts the compliance cycle, especially in light of the 30 September 2025 deadline for filing tax audit reports under Section 44AB. The problem is compounded by the upcoming Diwali festival season in mid-October, which typically sees a slowdown in business activity due to the unavailability of clients, auditors, and finance teams. This leaves a narrow window for audited return filings, increasing the risk of errors and creating immense pressure on practitioners.

Another pressing concern raised in the memorandum is the introduction of significant changes to Form 3CD by the Central Board of Direct Taxes (CBDT). These changes include new disclosures related to tax provisions, MSME reporting, and financial transactions. Without updated ITR utilities that integrate these revised components, auditors are unable to validate or complete tax audits, thereby stalling the entire filing process for audited assesses.

The associations warned that the knock-on effects of delayed utility release will extend to late processing of ITRs and subsequent refund delays. Many SMEs and small proprietorships rely on timely refunds for working capital and investment needs. Any postponement in utility availability pushes refunds to January or February 2026, resulting in financial setbacks and reduced taxpayer confidence. Furthermore, the associations noted that interest under Sections 234B and 234C continues to accrue based on statutory deadlines, meaning that taxpayers may incur penalties despite the delay being systemic and beyond their control.

In addition to income tax, the delay also threatens to disrupt GST compliance. Audited financials are a key component in preparing GSTR-9 and GSTR-9C returns, which are due in December. Any delay in ITR filing could cause inaccuracies, missed deadlines, or the need for revisions under the GST regime, leading to penalties and additional compliance burdens for taxpayers.

The representation also pointed out the adverse impact on SMEs and dependent businesses. Tax filings are essential for securing loan renewals, improving credit ratings, and participating in government tenders, all of which rely on up-to-date financial records. Delays in ITR filings create uncertainty in operations and can hinder business expansion, running counter to the government’s objectives of promoting MSME growth.

In light of these issues, AGFTC and ITBA have jointly requested that the Income Tax Department and its technology partners release updated and error-free ITR utilities and tax audit reporting tools immediately. They have also recommended a 60-day extension for filing tax audit reports, shifting the due date from 30 September to 30 November 2025. Further, they proposed a corresponding extension for filing ITR-3 and ITR-6 forms, along with transfer pricing documentation and international transaction disclosures, to 31 December 2025. This, they argue, will ensure smoother compliance and reduce stress on the tax ecosystem.

The associations have expressed hope that under the leadership of Hon’ble Prime Minister Shri Narendra Modi and Hon’ble Finance Minister Smt. Nirmala Sitharaman, appropriate relief will be granted at the earliest to ensure fair and efficient compliance for all taxpayers.