Extension of due dates of Income tax returns & submission of Tax audit reports for FY 2020-21 (AY 2021-22): Appealed by Gujarat Chamber of Commerce & Industry
Gujarat Chamber of Commerce & Industry
15th December, 2021/14945
To,
Smt. Nirmala Sitharaman
Hon’ble Union Minister of Finance,
Ministry of Finance,
Government of India,
North Block,
New Delhi — 110001
Sub: Extension of due dates of Income tax returns & submission of Tax audit reports for FY 2020-21 (AY 2021-22)
Respected Madam,
We would like to place on record our sincere appreciation to the laudable efforts taken by the government towards fighting the COVID-19 pandemic with record vaccinations and timely support to the citizens. We applaud the vision of having a new income tax e-filing website which aims to provide convenience and a “modern, seamless experience” to taxpayers. We are confident that slew of taxpayer friendly measures planned by the Government will address several intricate problems relating to taxation, synchronously fulfil its vision of having more transparency in the system with minimal interaction between tax payers and tax authorities. This regime has provided us with new hope and optimism for a future bereft of the virus.
COVID -19 & RISING CASES OF OMICORN CASES:
Globally, Omicron has reached nearly 60 countries, and many nations have started putting restrictions and lockdowns are back in place. India reported 7,992 cases on 10th December 2021 and the cases are on gradual rise on a daily basis. Triggered by the rising Omicron cases in Maharashtra, the state government has banned large gatherings and imposed other restrictions within Mumbai. The state has the highest cases with the new SARS-CoV-2 ‘variant of concern’ in the country till date. On the other hand, 32 cases of the new variant of concern Omicron have been detected so far in the country, which is a cause for concern. This is especially so because people have been wearing masks less and not following the proper COVID protocols.
With Omicron, the experts predict that the third wave of coronavirus could hit the peak by January end with cases likely to be reaching up to 1-1.5 lakh a day in the country. An Indian Institute of Technology Hyderabad (IITH) team, which launched a Covid tracker website, has predicted that Omicron variant cases may touch 1.5 lakh cases when at peak and will totally subside by March 22. Most of the companies have advised their staffs to continue working remotely wherever possible.
Due to COVID-19 pandemic and new OMICORN variant, following issues are being faced by the trade and industry:
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Mortality rate in the second wave of COVID-19 pandemic for age group of 25-40 was higher than the initial phases. COVID-19 has had a huge impact psychologically and it will take more time for people to leave behind the fear and anxiety caused due to this pandemic. Hence, people are more worried for the prospective third wave and its deadly consequences.
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Though the Government of India (`GOI’) has not imposed any lockdown, still there are various places in the country that are either still under partial lockdowns or are under containment zones etc. making it extremely hard for the businesses to run their regular operations. The strength of workforce at the offices of taxpayers and their consultants is less and nowhere close to its full capacity. The offices are working with 50-60% capacity and they do not expect their workforce to resume work normally in near future, making it strenuous for them to do necessary accounting related work.
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All entities do not have facility of “work from home” and even employees are not having the required data to work from home. Entities are spread across the country and they may not necessarily be in big towns or having all required “cloud storage” or “work from home facilities” for employees. In the absence of data, every financial and accounting processes are also hampered.
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Filing of returns is not possible without consultation of professionals and auditors of the companies. Due to COVID-19, even the professionals and auditors are facing the issue of insufficient staff / staff working from home without data / staff quarantined in containment zones etc. making it extremely difficult to perform the required audit procedures and complete the audit in time. Restriction on travelling and number of people working also impacts consultants’ ability to file returns on time.
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Severe Cash Crunch due to COVID-19: COVID-19 has had a direct negative impact on demand and supply of goods and services and businesses are also facing serious cash flow issues as the economic activities have started in the second half of current year only. This in turn is having an impact on all payments including to those for employees, interest, loan repayments and taxes. There are less chances of receiving payments from the outstanding receivables as this pandemic has created cash flow mismatches for all concerned. Moreover, the businesses are facing severe supply chain disruptions and expect the situation to worsen further till the time the things get normalized. Not only the small and medium businesses, but even the large businesses are severely affected and if not supported timely, we may see large chunk of MSMEs closing down resulting in mass unemployment and related problems.