Tax audit date extension plays out in courts, here is what taxpayers should do

Tax Audit due date extension petitions

With September 30 deadline for filing tax audit reports (TAR) less than a week away, taxpayers and professionals are facing challenges due overlapping compliance timelines and technical glitches. Some high courts have intervened in the matter and a number of tax bodies have requested extensions.

On September 24, the Jodhpur Bench of the Rajasthan High Court issued an interim order extending the TAR deadline to October 31. The Tax Bar Association of Jodhpur had approached the court for relief.

The Karnataka High Court, too, extended the filing deadline to October 31 on a plea filed by the Karnataka State Chartered Accountants Association (KSCAA).

Pleas for extension

More petitions have been filed seeking extensions for the TAR and Income Tax Return (ITR) filing deadlines.

The All India Federation of Tax Practitioners (AIFTP) moved the Delhi High Court, requesting TAR extension to October 31 and the ITR filing deadline in audit cases to November 30. A plea has also been filed before the Madhya Pradesh High Court for filing of tax audit reports.

In a letter to the Central Board of Direct Taxes, the Institute of Chartered Accountants of India (ICAI) said, "We also wish to bring to your kind attention the concerns faced by many taxpayers in return filing and also the problems in filing tax audit report, for which 30th September, 2025 is the last date.

“Also, issues are being faced in submission of Form 10AB for renewal of registration of trusts, for which the last date is 30th September, 2025 in cases where registration falls due on 1st April, 2026. Based on 1200+ responses received, we have compiled the following major concerns, apart from others, so that they can be addressed timely, to facilitate effective compliance of law."

Tax bodies like the Chartered Accountants Association in Jalandhar have also appealed for extensions.

Implications for taxpayers

The orders of the Rajasthan and Karnataka High Courts apply only to these states till the CBDT issues a nationwide notification. Taxpayers in other states should consult tax professionals to ensure compliance.

They should stay informed through official channels and seek assistance from qualified tax practitioners to navigate the complexities of the current compliance landscape.

Who needs a tax audit under Section 44AB?

Under Section 44AB of the Income Tax Act, businesses with turnover above Rs 1 crore must undergo a tax audit. However, the limit is raised to Rs 10 crore if at least 95 percent of the transactions are digital.

Freelancers and professionals such as doctors, lawyers, architects, or chartered accountants running private practices also fall under audit requirements if annual income exceeds Rs 50 lakh.

Taxpayers under presumptive taxation schemes like Section 44ADA are not entirely exempt. If they declare profits below the prescribed rate, a tax audit becomes mandatory.