Finance Ministry Urged To Remove Hassles, Undue Penalties From Filing Returns

Associations representing chartered accountants across India have approached the finance ministry, raising grievances faced by taxpayers during the assessment and filing of income tax and goods and services tax returns.

The associations—from Ahmedabad, Mumbai, Surat, Karnataka and Lucknow—highlighted issues like unavailability of ITR forms and delays in tax refunds, among others. Frequent changes in the software used for filing IT returns has been a nagging issue for taxpayers this assessment year, they said.

Here’s the gist of the representations:

ITR Forms, Due Dates & TDS

Income Tax Return Forms: An ITR form is an electronic document used by taxpayers for filing income tax returns. The format of the ITR form is prescribed and revised by the tax department regularly.

The CA Associations mentioned that taxpayers face problems when the format or information requirement in ITR is revised on a frequent basis. They suggested that the return forms be released in advance to avoid delays.

Revision of Due Dates for Filing of IT Returns: The tax department issues order every year to specify due date for filing returns. Different dates are specified, depending on the type of taxpayer or the nature of audit.

The associations said due dates are extended only after public demand and any change in filing date may coincide with those under other laws. It suggested that a core group be formed to decide the dates and revise deadline for filing returns—August for individuals and October for taxpayers undergoing audits.

Refund of Excess Taxes: Whenever taxpayers pay excess tax, they are entitled to refund. A mechanism for taxpayers to seek refund in such cases doesn’t exist, the associations said, adding that the government must address this issue.

Delayed Orders By Income Tax Commissioners

The Commissioner of Income Tax—Appeals is the first appellate authority under the Income Tax Act. Section 246A of the Act allows a taxpayers to file appeals with the commissioner against certain orders passed by an assessing officer.

The CA associations suggest that:

• The Act doesn’t prescribe any deadline for the passing and disposal of orders by the commissioner. Moreover, cases get delayed due to adjournments, affecting its disposal. The government must specify time limits for passing as well as disposal of such orders.
• The government must monitor quality of the assessments made by an assessing officer. In instances where many appeals are pending with a commissioner of income tax, the association has suggested transfer of some appeals to other officers to avoid delays.

Prosecution For Delayed Filing Of Returns

Income Tax Returns: Taxpayers may face consequences if they willfully fail to furnish returns of income in the format prescribed by tax department.

The CA associations suggested raising the threshold for initiating prosecution to a level which either matches the appeal threshold or which is more practical and realistic.

TDS Returns: The income tax law puts the burden of proof upon taxpayers to show they had no intention to commit crime.

The CA associations said even late repayment of tax deducted at source leads to prosecution by the tax department. It said in many instances the tax department has initiated prosecution even when TDS has been deposited with authorities subsequently. Noting that mere late repayment of TDS doesn’t always involve a guilty intent, it said the government should avoid prosecution in cases where TDS along with penal interest has been deposited by taxpayer.

Other Suggestions

• Setting time limits and adding accountability for time bound refund of taxes by the income tax officers.
• Reopening of cases where income has escaped assessment must be done on a selective basis rather than the presently used generalized approach by the tax department.