High Courts Order CBDT To Extend Tax Audit Deadline for All

In a big relief to taxpayers and professionals struggling with the income tax e-filing portal, two High Courts, Karnataka and Rajasthan, have directed the CBDT (Central Board of Direct Taxes) to extend the deadline for filing TAR (Tax Audit Reports) under Section 44AB of the Income Tax Act, 1961. The deadline, earlier September 30, 2025, has now been pushed to October 31, 2025.

After hearing a petition filed by the KSCAA (Karnataka State Chartered Accountants Association), the Karnataka High Court passed its order, demanding more time for audit filings. On similar grounds, the Rajasthan High Court’s Jodhpur Bench also stepped in, highlighting that CBDT had allowed such relaxations in the past. This ruling came in response to a petition moved by the Jodhpur Tax Bar Association.

Interestingly, the Rajasthan High Court went a step further and instructed that the extension should also apply to related ITRs (Income Tax Returns) for AY 2025–26. While these temporary orders bring relief to taxpayers in Karnataka and Rajasthan, experts note that they apply only within these states unless the CBDT accepts the directive at the national level or approaches the Supreme Court with an appeal.

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Chartered accountants and taxpayers have been reporting serious problems with the e-filing portal for months. Failing to log in, slow website loading and frequent downtime have become routine. Users also struggle to download crucial documents like the AIS (Annual Information Statement). Additionally, the release of utility forms for ITR-5, ITR-6 and ITR-7 came out later than expected, leaving little time for compliance.

Auditors say the new version of Form 3CD, which requires expanded disclosures, has only increased the workload, making it nearly impossible to complete audits within the original deadline. Several industry bodies, including the ICAI (Institute of Chartered Accountants of India), had been pushing for an extension, mentioning these genuine challenges.

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Who Needs a Tax Audit?

Under Section 44AB, the following taxpayers are required to get their accounts audited:

• Businesses with an annual turnover crossing Rs 1 crore, or up to Rs 10 crore if cash transactions are limited to 5% of total receipts and payments.
• Professionals such as doctors, lawyers, architects and chartered accountants, if their annual income crosses Rs 50 lakh.
• Taxpayers who picked presumptive taxation schemes under Section 44ADA in certain conditions.

In any case, not filing the audit report on time can bring a penalty of 0.5% of turnover or up to Rs 1.5 lakh, whichever is lower.

For now, taxpayers in Karnataka and Rajasthan clearly know they can file their TARs and ITRs until October 31, 2025. Apart from that, all eyes are on CBDT to see if the extension will be applied nationwide. Due to pressure from professionals and a history of deadline extensions, a central notification may be announced soon.

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