Extend Income Tax Audit Deadline: BCAS Highlights ITR Portal Glitches and Enhanced Reporting Needs
As the deadline for filing income tax audit reports and Income Tax Returns (ITR) for the Assessment Year (AY) 2025-26 approaches, the Bombay Chartered Accountants’ Society (BCAS) has urged the Central Board of Direct Taxes (CBDT) to extend the September 30, 2025, tax audit deadline. In a representation submitted on September 1, 2025, to the Finance Minister and CBDT, BCAS cited persistent technical glitches on the ITR e-filing portal and increased reporting complexities as major hurdles for taxpayers and professionals. This blog explores BCAS’s plea, the challenges faced, and the implications for taxpayers as of September 5, 2025.
Why BCAS Is Pushing for an Extension
The BCAS representation highlights several "ground realities" affecting compliance for Financial Year (FY) 2024-25 (AY 2025-26). These challenges have made it difficult for taxpayers and chartered accountants to meet statutory deadlines, prompting calls for an extension of the tax audit deadline (September 30, 2025) and ITR filing for audit cases (October 31, 2025). Key reasons include:
- ITR Portal Glitches: The e-filing portal has faced recurring issues, including system errors, session timeouts, and slow performance during peak hours. These technical bottlenecks have hindered the timely upload of tax audit reports (Forms 3CA, 3CB, 3CD) and ITRs, causing frustration among professionals and taxpayers.
- Delayed Release of ITR Utilities: The phased rollout of ITR and tax audit utilities began in July 2025, significantly later than the usual April release. This delay has compressed the compliance timeline, leaving insufficient time for preparation and filing.
- Enhanced Reporting Requirements: The Institute of Chartered Accountants of India (ICAI) introduced a new vertical format for financial statements for non-corporate entities, effective FY 2024-25. This change, requiring standardized Balance Sheets, Profit & Loss Accounts, and comparative figures from the previous year, demands additional training and software updates, slowing down the process.
- Overlapping Compliance Obligations: Professionals are juggling multiple deadlines, including tax audits, company law audits, and GST filings, all concentrated in September and October. This overlap strains resources and risks errors in filings.
- Data Mismatches: Discrepancies between Form 26AS, Annual Information Statement (AIS), and Taxpayer Information Summary (TIS) have made reconciliation time-consuming, further delaying accurate submissions.
BCAS argues that extending the deadlines would align with the Government of India’s “Ease of Doing Business” policy, reducing taxpayer stress and promoting voluntary compliance without compromising government revenue.
Current Deadlines and Penalties
As per the Income Tax Act, 1961:
- Tax Audit Deadline: September 30, 2025, for filing audit reports (Forms 3CA/3CB and 3CD) under Section 44AB for businesses with turnover exceeding ₹1 crore (or ₹10 crore if cash transactions are below 5%) and professionals with gross receipts above ₹50 lakh.
- ITR Deadline for Audit Cases: October 31, 2025, for taxpayers requiring audits.
- Transfer Pricing (Form 3CEB): October 31, 2025, for entities with international or specified domestic transactions under Section 92E.
- Non-Audit ITR Deadline: September 15, 2025 (extended from July 31, 2025, for individuals and HUFs not requiring audits).
Failure to file tax audit reports by September 30 can result in a penalty under Section 271B of ₹1,50,000 or 0.5% of total sales/turnover/gross receipts, whichever is lower. However, penalties may be waived if reasonable causes, such as portal glitches or natural disruptions, are proven.
Support from Other Associations
BCAS is not alone in its request. The Chandigarh Chartered Accountants Taxation Association (CCATAX), Rajasthan Tax Consultant’s Association (RTCA), Gujarat Chamber of Commerce & Industry (GCCI), and Tax Bar Association of Bhilwara have echoed similar concerns. They cite additional challenges like:
- Festive Season Impact: The Navratri and Dussehra festivals in October 2025 reduce working days and staff availability.
- Natural Disruptions: Heavy rains and flooding in states like Punjab, Haryana, Gujarat, and Maharashtra have caused power outages and office inaccessibility, further complicating compliance.
- New ICAI Format: The mandatory shift to a vertical financial statement format requires professionals to adapt, adding to the compliance burden.
These associations propose extending the tax audit deadline to November 30, 2025, and ITR for audit cases to December 31, 2025, to ensure accurate and error-free filings.
Benefits of an Extension
BCAS and other bodies argue that extending deadlines would:
- Enhance Accuracy: Provide sufficient time to reconcile data (e.g., Form 26AS, AIS, Form 16/16A) and match financial records with GST data, reducing errors and subsequent litigation.
- Reduce Portal Overload: Spread out filings to prevent last-minute rushes that crash the e-filing portal, as seen in previous years.
- Support Professionals: Alleviate pressure on chartered accountants managing multiple compliance tasks, ensuring higher-quality audit reports.
- Promote Voluntary Compliance: Align with the government’s goal of fostering a taxpayer-friendly regime, encouraging accurate filings without fear of penalties.
Importantly, extensions would not impact government revenue, as delayed self-assessment tax payments already incur interest, maintaining fiscal balance.
Recent Precedent
The CBDT has a history of granting extensions in response to genuine hardships. For AY 2024-25, the tax audit deadline was extended from September 30, 2024, to October 7, 2024, due to portal sluggishness and high filing volumes. This precedent supports BCAS’s case, especially given the ongoing technical issues and enhanced reporting demands for AY 2025-26.
What Taxpayers and Professionals Should Do
While awaiting CBDT’s decision, taxpayers and professionals can take proactive steps:
- File Early: Submit audit reports and ITRs as soon as possible to avoid last-minute portal issues.
- Verify Data: Reconcile Form 26AS, AIS, and TIS to ensure accurate filings.
- Use Updated Utilities: Download the latest ITR and audit utilities from www.incometax.gov.in to avoid schema mismatches.
- Seek Professional Help: Consult chartered accountants to navigate the new ICAI format and complex reporting requirements.
- Monitor Updates: Check the Income Tax Department’s website or social media for announcements on deadline extensions.
If an extension is granted, taxpayers should use the additional time to ensure error-free submissions, as rushed filings often lead to disputes and penalties.
Conclusion
The BCAS’s call to extend the income tax audit deadline for AY 2025-26 reflects the real challenges posed by ITR portal glitches and enhanced reporting needs. With only weeks left until September 30, 2025, the pressure is mounting for taxpayers and professionals grappling with technical issues, delayed utilities, and overlapping compliance demands. An extension would provide much-needed relief, ensuring accurate filings and reducing administrative burdens. As the CBDT considers these requests, taxpayers should act swiftly, stay informed, and leverage professional support to meet deadlines. For the latest updates, visit www.incometax.gov.in or follow the Income Tax Department’s official channels.
Sources: The Economic Times, Business Standard, CAalley.com, cleartax.in, taxguru.in
