2025 (11) TMI 172 - HC - Income Tax

CBDT directed under s.119 to extend ITR due date for audit-report assessees to 30.11.2025 for FY2024-25

HC disposed of four writ petitions and refused further adjournments, finding no justification to delay. The court directed the respondent tax authority ... Seeking direction to extend the due date for filing of tax audit reports for a reasonable period from 30.09.2025 and as a necessary corollary to further extend the due date for filing tax returns - seeking extension of deadline for renewal of registration u/s 12 HELD THAT:- Repeated adjournments have been granted at fervent request of learned counsel for UOI on the premise that proposal regarding extension of due date for filing of Income Tax Returns in the case of auditable assessees for Assessment year 2025-26 is under submission for early decision. Position is no different even today despite factum of specific and categoric order dated 13.10.2025 passed by High Court of Gujarat [2025 (11) TMI 100 - GUJARAT HIGH COURT], which has admittedly been attained finality. We find no ground whatsoever to further adjourn these writ petitions as has been suggested. Keeping in view the facts and circumstances as above, all the four writ petitions are disposed of while directing respondent – CBDT to issue necessary circular in exercise of power under Section 119 of the Act to extend the due date for filing of returns by assessees required to file audit report as per clause (a) of Explanation 2 to sub-Section (1) of Section 139 of the Act or required to file report of audit under provisions of the Act for Financial Year 2024-2025 (Assessment Year 2025-26) to 30.11.2025. Pending application(s), if any, stand(s), disposed of accordingly. 1. ISSUES PRESENTED AND CONSIDERED 1. Whether the due date for furnishing tax audit reports (the 'specified date' under Explanation (ii) to Section 44AB) for Financial Year 2024-25 (AY 2025-26) ought to be extended from 30.09.2025 to a later date in view of delayed availability of e-filing utilities and substantive changes notified by the Department. 2. Whether, consequent upon any extension of the specified date, the due date for furnishing returns of income under Section 139(1) (the 'due date') for assessees whose accounts are required to be audited should be correspondingly extended so that the statutory interval between specified date and due date is preserved. 3. Whether renewal of registration under Section 12A (and approval under Section 80G) is mandatorily linked to filing of audited financial statements or tax audit reports for the latest prior year such that extension of the specified date affects the deadline for renewal (Form 10AB) or requires extension. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Extension of the specified date for furnishing tax audit reports Legal framework: Section 44AB prescribes audit obligations and defines 'specified date' as 'date one month prior to the due date for furnishing the return of income under sub-section (1) of section 139'. CBDT may issue instructions/circulars under Section 119. E-filing of audit reports and returns is mandatory. Precedent treatment: Reliance was placed on the Court's earlier order of 29.09.2015 (referenced), and the High Court of Gujarat's decision of 13.10.2025 directing CBDT to extend specified/due dates in related matters. The Court treats those authorities as relevant for principles and as demonstrating administrative practice and judicial expectation regarding timely circulars. Interpretation and reasoning: Petitioners established that substantive changes to tax audit reporting were notified on 28.03.2025 but e-filing utilities were made available only on 14.08.2025, causing genuine hardship and curtailed time for compliance. The Union of India acknowledged system readiness issues and had previously extended due dates for certain non-audit categories. The Court accepts the factual matrix showing delay in availability of e-filing utility and recognizes administrative acknowledgement of system changes and hardship. Ratio vs. Obiter: Ratio - administrative extension of the specified date was warranted where system readiness and substantive changes materially reduced the time available to audited assessees; CBDT may and should exercise power under Section 119 to extend specified dates in such circumstances. Obiter - observations on general tendencies of the Department to wait until late in the period to issue extensions. Conclusion: The Court directed CBDT to issue a circular under Section 119 extending the due date for filing returns (and, as a corollary, aligning the specified date) for assessees required to file audit reports for FY 2024-25 to 30.11.2025, noting that the specified date had already been extended to 31.10.2025 and that a consequential extension of the due date to preserve the prescribed interval was required. Issue 2: Obligation to extend the due date for filing returns consequent to extension of the specified date Legal framework: Explanation 2(a) to Section 139(1) sets the due date for assessees whose accounts are required to be audited (31st October of the assessment year, as amended), and Section 44AB Explanation (ii) links the specified date to being one month prior to that due date. CBDT's power under Section 119 permits issuing directions/circulars for administrative convenience consistent with law. Precedent treatment: The Court explicitly follows and relies on the reasoning in the High Court of Gujarat decision which held that where the specified date is extended by CBDT, a consequential extension of the due date is required to preserve the statutory one-month relationship; otherwise the amended statutory scheme would be nullified. Interpretation and reasoning: The Court accepted the Gujarat Court's analysis that CBDT cannot validly extend the specified date without concomitantly extending the due date because Section 44AB's Explanation (ii) makes the specified date one month prior to the due date. If specified date is moved forward without moving the due date, it would restore the prior regime where audit reports and returns were required together, contrary to current statutory provisions. The Court rejected further adjournment requests by the Union where a final judicial order in Gujarat remained unchallenged and CBDT had not issued the consequential circular. Ratio vs. Obiter: Ratio - where CBDT extends the specified date for furnishing audit reports, it must issue a consequential circular extending the due date for filing returns to maintain the statutory interval; failure to do so undermines the statutory scheme. Obiter - criticisms of administrative delay and 'last moment' issuance of extensions are persuasive but not essential to the legal holding. Conclusion: The Court ordered issuance of a circular under Section 119 extending the due date for filing returns to 30.11.2025 for assessees required to file audit reports for FY 2024-25, thereby preserving the statutory interval between specified date and due date. Issue 3: Effect of audit-report extension on renewal of registration under Section 12A / Form 10AB and requirement to attach audited financial statements Legal framework: Section 12A(1)(ac) and Rule 17A prescribe timelines and documentary requirements for renewal applications in Form 10AB; Rule 17A contemplates submission of annual financial statements or tax audit reports for prior years 'inter alia' but does not mandate audited statements for the latest prior year if audit is not yet completed; ITRs are not mandated with the Form 10AB. Precedent treatment: The Court accepted and recorded the Departmental clarification (communication of 29.09.2025) explaining statutory requirements under Section 12A and Rule 17A and the independence of Form 10AB timelines from the specified date/due date for audit reports/ITRs. Interpretation and reasoning: The Court noted the Department's position that (i) applications for renewal must be filed at least six months before expiry of existing registration; (ii) existing renewals for entities were valid through AY 2026-27 and that applications falling due on 30.09.2025 need not include audited statements for the immediately preceding year if the accounts were yet unaudited; and (iii) Form 10AB may be filed on the basis of provisional financial statements for FY 2024-25. The Court accepted this as a legal clarification showing no direct statutory link between specified/due dates and the deadline for filing Form 10AB. Ratio vs. Obiter: Ratio - renewal applications under Section 12A/Form 10AB can be submitted on the basis of provisional financial statements where audited statements for the latest prior year are not yet available; there is no statutory requirement to attach audited reports or prior year ITRs for such renewal applications. Obiter - observations on increased filing statistics following extensions are noted as factual context. Conclusion: The Court recorded the CBDT clarification and concluded that extension of the specified date does not create an anomaly with respect to renewal under Section 12A; Form 10AB applications due on 30.09.2025 may be filed with provisional financial statements where audits are pending. Administrative direction and disposal The Court, noting the finality of the Gujarat order and the absence of a CBDT circular extending the due date, refused further adjournment and directed CBDT to issue the necessary circular under Section 119 to extend the due date for filing returns to 30.11.2025 for assessees required to file audit reports for FY 2024-25 (AY 2025-26); pending applications were disposed of accordingly.