Responding to the directions by various High Courts, the CBDT has extended the deadline for Taxpayers who are subjected to Tax Audit requirement from Sept 30 to Nov 30. However, taking cue from the Gujarat High Court’s directive, the CBDT has clarified that the extension of due date would not be applicable for the purpose of levy of late-filing interest under section 234A. The intent obviously is to encourage the Taxpayers to pay the taxes due by the original due date of September 30.

Logically, one would believe that the Taxpayers who have paid the Taxes on or before September 30, but have availed the extended period till November 30 would not be visited with 234A interest levy. But one can safely rely on the Tax Department to raise an issue couple of years down the line, when assessments are finalized , that the extension would only safeguard penal consequences and  234A interest would apply even to those who have paid the Taxes before the original due date, if the return is filed beyond September 30. We expect this to be the logical sequence of events to unfold on account of the half hearted, half-baked extension by CBDT, which has been forced by the Judiciary. In the above eventuality, Taxpayers could seek relief on the basis of the Delhi High Court ruling in the case of Dr. Prannoy Roy [254 ITR 755] wherein the Court had held that payment of taxes on time would not entail 234A interest consequences, even if the return was filed late.