The Rajasthan High Court has ordered the Central Board of Direct Taxes (CBDT) to extend the deadline for filing Tax Audit Reports (TAR) from September 30, 2025, to October 31, 2025. This order is an outcome of the case of Tax Bar Association, Jodhpur vs Union of India [CW 18593/2025] and is a timely relief for taxpayers and chartered accountants who are struggling with timely compliance.
The request for extension came in the form of a Public Interest Litigation (PIL) moved by the Tax Bar Association, Bhilwara, backed by identical petitions from other tax professionals and associations. The petitioners pointed to continuing technical issues on the Income Tax e-filing portal, belated release of updated audit reporting formats, and conflicting timelines aggravated by the upcoming festive period and unfavourable weather conditions like floods in certain areas.
During the hearing, the division bench of Justice Pushpendra Singh Bhati and Justice Bipin Gupta viewed these difficulties as valid hurdles to timely filing. They recognised that earlier years had also seen similar extensions issued by the CBDT under similar conditions and characterised the refusal to extend it this year as arbitrary and unreasonable.
The extension gives the valuable one-month cushion time to businesses, proprietorships, and professionals who fall under Section 44AB of the Income Tax Act, 1961, to fulfil their audit requirement without worrying about penalty. The extension will prevent unintentional mistakes and last-minute rushes that usually lead to more errors or anxiety for taxpayers and auditors.
Additionally, the order prevents taxpayers from being unjustly penalised under Section 271B, which provides for penalty up to 0.5% of turnover or ₹1,50,000 for non-compliance with audit requisitions. The court observed that reasonable cause, including technical issues and procedural modifications, should be taken into account before penalising any taxpayer.
Though the court order instructs the CBDT to grant an extension of time, the formal notification or circular announcing the extension of the due date for filing the Tax Audit Report to October 31, 2025, is yet to be received from the tax department. Taxpayers and businesses are recommended to remain informed through legitimate sources and keep preparing their reports in earnest.
This extension comes in line with recent requests from tax authorities, such as the Institute of Chartered Accountants of India (ICAI), that asked the government for extension relief on similar grounds. As the deadline approaches, most other courts will also find themselves granting extension petitions, reflecting an even greater challenge that taxpayers find themselves under to manage complex compliance amid changing rules and technology failures.
The Rajasthan High Court's order of extending the Tax Audit Report filing deadline is a relief for taxpayers who are facing considerable compliance stress this season. Once the CBDT releases the formal announcement, assessees are advised to take timely steps to file their reports by the new deadline to avoid penalty and hassle-free processing of returns for Assessment Year 2025-26.
Taxpayers and tax practitioners should keep a lookout for information on the official website of the Income Tax Department regarding the final decision on this extension and prepare themselves accordingly.
