Extension of time limit June 24 Notification

Highlights of the Notification dated June 24, 2020 Extending Due Dates of Various Statutory Compliances

The Government has taken several measures to address various compliances issues being faced by taxpayers, owing to the outbreak of COVID -19 and the ensuing lockdown. Earlier in March 2020, the Government had extended various deadlines under Direct Tax and Indirect tax laws (which fell between 20^th March, 2020 to 29^th June, 2020) to  30^th  June, 2020 by  way of an Ordinance which was promulgated on March 31, 2020.

With the goal of building a self-reliant India, the Government had held a series of press conferences, announcing certain measures in May 2020 focused on rehabilitating small and medium businesses which were adversely affected. Amongst those announcements, the Government had also relaxed certain provisions relating to withholding tax, expeditious grant of refunds etc., besides extending statutory deadlines, such as limitation period for  completion of assessments, obtaining tax audit reports etc. A note summarizing the key takeaways of the press release dated May 13, 2020 was circulated by us on May 14, 2020.

Whilst the lockdown has been relaxed in most parts of the country, administrations have found it difficult to arrest the growth of this pandemic, which has continued to show an increasing trend. As a result, Government offices, judicial authorities and even private businesses are operating only on a limited capacity, due to which taxpayers are facing hardships while meeting various compliance requirements.

In this backdrop, the Government has provided further relief to taxpayers extending various timelines under the specified laws (including Income tax law, Black Money Law, Vivad se Vishwas Act etc.) yet again, for which Notification 35 /2020 dated 24^th June, 2020 has been issued by virtue of the power granted under the Ordinance dated 31^st March, 2020 to provide further extension of the due dates.

In terms of this notification, the deadline for meeting prescribed compliances and due dates under specified laws falling between 20^th March, 2020 till 31^st December, 2020 shall stand extended to 31^st March, 2021, subject to the prescribed exceptions, where a shorter compliance period has been stipulated. The aforesaid extension also includes deadlines for passing orders, completion of proceedings, filing appeals, replies, applications, linking  Aadhaar with PAN and various other prescribed documents. Thus, the Government has not only eased compliance requirements for taxpayers but also granted more time to tax authorities to fulfill their administrative duties.

Furthermore, certain announcements made in the Press release dated May 13, 2020 have been given legislative effect by way of this notification, though for some of the announcements such as: making payment under Vivad Se Vishwas Act without additional amount after 30^th June, 2020, reduction in TDS rates, extension of date of assessments which shall be barred by limitation on 31^st March, 2021, the legislative changes are yet to be introduced. It is expected that the government may bring such changes into the statutes in  the coming parliamentary session.

The key highlights of the notification have been tabulated hereunder:

 Notes

• The Ordinance did not extend the due date of tax payments under the specified laws. However, it provided for reduced rate of interest of 9% per annum instead of the regular rate of 12%/18% per annum and waiver of penalty and prosecution for tax payments falling due between 20^th March, 2020 and 29^th June, 2020, if paid by 30^th June, 2020. The Notification dated 24^th June, 2020 has not extended the above relief beyond 30^th June, 2020.

• In case of furnishing of Transfer Pricing report in Form 3CEB, no specific date has been mentioned, however, the Income-tax Act as amended by the Finance Act, 2020 specifies ‘one month before the due date of furnishing return of income’ as the due date of furnishing Form 3CEB. At the same time, going by the expansive nature of the notification extending the due dates, Form 3CEB due date being not specifically specified may also be considered as extended to 31^st March, 2021, which would be contrary to the scheme of the Act. Further, looking Form 3CEB as ‘audit report’ from another angle, would also give the same result, as the Notification specifies 31^st October, 2020 as the due date for ‘report of audit’. As such, in our view, the due date of Form 3CEB should be reckoned as 31^st October, 2020 for AY 2020-21. The above view/ due date would equally apply to furnishing of Certificate for Minimum Alternate Tax (MAT) computation under section 115JB of the Act.

• In the case of furnishing of TDS/TCS statements the due dates for  which fall during  20^th March, 2020 to 31^st December, 2020 (i.e. for the quarter ending 30^th June & 30^th September), no due date has been specified in the notification. As such, the due dates shall stand extended to 31^st March, 2021 unless any further clarification  or amendment is made in this regard.

• Similarly, for issuance of Quarterly TDS certificates in Form 16A, the due dates for which fall during 20^th March, 2020 to 31^st December, 2020 (Fifteen days from the due date for furnishing TDS statement), which have not been specifically provided in the notification, should, keeping in view the scheme of the Income-tax Act, be considered as after 15 days from the due dates as extended in the notification, instead of considering as 31^st March, 2021.