Extension of ITR filing due date for FY 2021-22 possible?
The last date for income tax return (ITR) filing for FY 2021-22 (AY 2022-23) is July 31, 2022. In the previous two years, the government extended the ITR filing due date and other income tax-related deadlines due to the novel coronavirus pandemic and glitches in the newly launched income tax portal. However, with things going back to normal, is there a chance of the ITR filing deadline being extended this year as well?
On July 2, 2022, the income tax department on its official Twitter handle said that there is irregular traffic causing taxpayers issues accessing the income tax department e-filing website (i.e., the new e-filing portal launched last year). As per the tweet, “It has been noticed that taxpayers are facing issues in accessing ITD e-filing portal. As informed by @Infosys, they have observed some irregular traffic on the portal for which proactive measures are being taken. Some users may be inconvenienced, which is regretted.”
So, with taxpayers complaining about issues with the e-filing portal this year as well, what are the chances of the government extending the ITR filing deadline this year? Further, tax experts state that so far, very few taxpayers have filed their tax returns, and the majority (more than 6 crore taxpayers) are yet to do it.
An expert said, As per data published by the income tax department, only 30 lakh ITRs have been filed in the first seven days of the month of July. The cumulative number of filings as on July 7 is 99 Lakh. Approximately 6.5 crore ITRs are yet to be filed. It appears very challenging considering less than 22 days are remaining before due date. In the preceding two years, the due date of filing ITR has consistently been extended by the income tax department. Due to this, many taxpayers are not yet fully convinced about the fact that due date for ITR filing will not be extended, and they have to file before July 31. A short extension till August 31 should be considered by tax department. This will help many taxpayers to file their tax returns.
The income tax department has recently tweeted regarding irregular traffic on the portal slowing down the website. This has raised hope for many tax filers if this shows the intent to extend of due date for filing ITR by the tax department. Though this is a bit unfortunate that even after more than a year of the launch of a new website, it is not able to handle the traffic on the portal, however, considering it positively, this might have been caused due to more assessees trying to file the ITRs early and not waiting till the last date. The extension may not be warranted this year considering that the ITR Forms and Utilities were issued well in advance. However, in case the portal slows down and taxpayers are not able to do the necessary filings, CBDT may have to consider extending the due date for enabling compliances.
The July 2, 2022 tweet by the income tax department about issues faced by the taxpayers in accessing income tax portal (due to irregular traffic) comes immediately after the new income tax e-filing portal completed its first year. At the launch of the new tax portal, a number of users complained about facing technical glitches. These included not being able to login into their accounts, unable to see old ITR data etc. However, it is notable that neither there is any specific information about extending the July 2022 due date for taxpayer in the Tweet nor the CBDT has rolled out any official Circular/ Notification pertaining to the same.
Moreover, filing tax return beyond 31st July (unless extended) may entail penal consequences such as additional interest liability u/s 234A and late fee u/s 234F of the Income-tax Act. Further, the taxpayer may face certain restrictions on set off and carry forward of losses. Considering the same, every taxpayer should undertake to file their tax returns before 31st July. Also, taking into account the irregular traffic on the portal, it is recommendable that the taxpayers should not await the last date for filing their tax returns. Further, the working of the new income tax portal has been fairly streamlined and it seems like, even if the CBDT goes on to extend the due date, it may only be a short extension.
While the recent tweet from the income tax department acknowledges glitches in the income tax portal, that by itself may not indicate an extension in the timeline for filing income tax returns. The new income tax portal has been on the radar of criticism for a while now. The finance ministry did put out data about the smooth functioning of the new portal, however, its efficacy in a usual operational scenario needs to be tested. The returns uploaded earlier were during the COVID period and were staggered due to deferred timelines. The faceless assessment is anticipated to put the system under some additional pressure and traffic. The income tax department while deciding on the extension should consider the challenges faced by the taxpayers which include technical glitches, irregular functioning of the portal, delayed release of utilities, and rising covid-19 cases.
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