Clipped from: https://economictimes.indiatimes.com/small-biz/sme-sector/second-covid-wave-industry-body-msmes-drag-government-taxman-to-court-over-not-extending-deadlines/articleshow/82321202.cmsSynopsis
Companies are worried that they would face penalties and jail term if they don’t follow deadlines.
MUMBAI: An industry association and a group of businessmen have dragged the government and tax departments to court for not postponing various deadlines despite the chaos created by the severe second Covid wave.
According to a writ petition filed by Association of Industries and Institutions, an apex body for small and medium companies, in Gujarat High Court, there is an “emergency like situation” in the country in the wake of “extreme spread of coronavirus.”
The association has dragged the Indian government, direct tax department, indirect tax department, Employees State Insurance Corporation and Employees Provident Fund Organization to court over the extension of due dates.
The association wants the government to extend the due dates for filing various tax and other filings by about three months. They argue that last year, when Covid pandemic and the cases were not as high, the government had extended various due dates, but the same isn’t done this year, despite the fast rising infections.
The lawyers representing the association point out that companies will have to face penalties, interest and in some cases prosecution leading to jail term, if businesses are unable to comply with the deadline.
Companies argue that there are practical difficulties in abiding by the deadlines as several company executives and even their chartered accountants are down with Covid.
“Most companies are struggling with the second wave of Covid pandemic and so are their CA firms, advocates and consultants, so abiding by the timelines whether for direct taxes, indirect taxes or other day to compliances of PF, labour laws would be next to impossible.” said Dr. Avinash Poddar, a senior lawyer representing the petitioners.
The association has also demanded that in case the government is unable to extend the deadlines, at least the penalties should be waived off.
Last year the government had extended the deadlines for filing tax returns by three months. This year however, businesses were hoping that they would get an extension but nothing has been declared as yet.
The petition adds that the companies are also facing difficulties due to various lockdowns announced by state governments such as Delhi, Maharashtra and Karnataka.
Many businesses are already suffering from a second disruption and acute cash flow issues. Most of the large companies are somehow managing the situation, but the small and medium enterprises are majorly hit, say industry trackers.
Several institutions and associations have been requesting the government to extend various deadlines. Earlier LocalCircles, a social media platform too had written to Nirmala Sitharaman, the finance minister to extend deadlines for GST, ET reported on April 26.