CBDT Extends Due Dates for Tax Audit and ITR Filing for AY 2025-26 - Complete Clarification for Taxpayers & Professionals

Date: 29 October 2025
Issued by: Central Board of Direct Taxes (CBDT), Ministry of Finance

1. Background

On 29th October 2025, the Central Board of Direct Taxes (CBDT) issued a press release extending important Income Tax filing deadlines for taxpayers covered under the tax audit category.

This relief has been granted under Section 139(1) and related provisions of the Income-tax Act, 1961, considering multiple representations from professionals and ongoing litigation regarding deadline extensions.

1. Extended Deadlines - Summary

A. Tax Audit Report (TAR)

• Earlier Due Date: 31st October 2025
• Extended Due Date: 10th November 2025

This applies to taxpayers required to furnish a report of audit under Section 44AB (tax audit cases) and other relevant provisions such as Section 44AD/44ADA (presumptive taxation cases opting out).

B. Income Tax Return (ITR) Filing - Audit Cases

• Earlier Due Date: 31st October 2025
• Extended Due Date: 10th December 2025

This extension covers assessees referred to in clause (a) of Explanation 2 to Section 139(1) - i.e., taxpayers required to furnish the audit report under Section 44AB.

1. Legal Reference in CBDT Notification

The notification specifically refers to:

“Assessees referred to in clause (a) of Explanation 2 to sub-section (1) of Section 139 of the Income-tax Act, 1961.”

In simpler terms, this means:

• Persons whose accounts are required to be audited under the Act or any other law (such as companies, firms, LLPs, etc.)
• Their ITR due date is now 10 December 2025.
• Their audit report due date is 10 November 2025.

Understanding the Logic Behind Different Due Dates for Tax Audit Report and ITR Filing

The Current Scenario (AY 2025-26)

As per the CBDT Press Release dated 29th October 2025, the due dates are as follows:

Relevant Legal Provisions

Section 44AB of the Income Tax Act, 1961 - Tax Audit

This section mandates that certain categories of taxpayers must get their accounts audited and furnish a report (Form 3CA/3CB & 3CD) by the specified date.

“Specified date” means the date one month prior to the due date of furnishing the return of income under sub-section (1) of section 139.

In simple words:
If the ITR due date under Section 139(1) is 10 December 2025,
then the audit report’s due date is one month before, i.e. 10 November 2025.

This one-month gap is created intentionally by law.

Purpose of Having Audit Report One Month Before ITR

There are two primary policy reasons for this:

(a) Verification of Audited Data Before Filing ITR

• The ITR filing process uses data from the audit report (Form 3CD).
• The Income Tax Department’s system auto-picks details such as turnover, depreciation, disallowances, TDS, etc., from the audit report.
• Hence, the audit report must be uploaded and accepted first.

(b) Validation & Cross-linking in ITR Utility

• When you prepare and upload an ITR (particularly ITR-3, ITR-5, ITR-6),
  the system checks whether a valid audit report is already uploaded for that PAN and assessment year.
• If it isn’t, the system will show a validation error.

Therefore, audit completion is expected before ITR submission.

Is It Practically Possible to File Audit Report Without Finalising Computation?

This is where the real-world challenge lies.

Technically:

• The audit report (Form 3CD) contains many details that are part of the final computation - depreciation, turnover, disallowances, etc.
• Without finalising the books and computation of income, a complete and correct audit report cannot be prepared.

However:

The law assumes that books of account and audit should be finalised before filing the return.
That is why Section 44AB sets a timeline one month prior to ITR filing - so that the audit is finished, and the return can be based on audited figures.

What Happens If Audit Report Is Filed After 10 November 2025?

Filing the audit report after the extended due date (10 November 2025) will have legal and technical consequences.

(a) Violation of Section 44AB

If the report is not filed on or before the “specified date”, it amounts to non-compliance of Section 44AB.

(b) Penalty u/s 271B

Section 271B:
“If any person fails to get his accounts audited in respect of any previous year or to furnish the audit report on or before the specified date, the Assessing Officer may impose a penalty.”

Penalty amount:

• 0.5% of total turnover/gross receipts,
  subject to a maximum of ₹1,50,000.

(c) Relief u/s 273B (Reasonable Cause)

However, if the taxpayer can prove a reasonable cause for delay (like illness, data loss, audit staff shortage, or technical failure of the portal),
then the penalty may be waived under Section 273B.

Procedural Issues in Filing ITR Without Audit Report

If you attempt to file the ITR before uploading the audit report, the following technical issues occur:

1. The ITR utility will not allow submission - error stating “Audit report not found.”
2. The return filed without linking the audit report is considered defective under Section 139(9).
3. If not corrected within prescribed time, the return is treated as invalid (i.e., not filed at all).

Hence, the sequence must always be:

Step 1: Finalize accounts
Step 2: Upload audit report (before due date)
Step 3: File ITR after ensuring audit report acknowledgment number is linked

Audit Report Filed Late, ITR Filed Within Extended Date What Happens?

This is a grey area often debated.
If you file the audit report late (say, 15 Nov) but ITR on 10 Dec, the system may still allow it, but technically:

• You have violated Section 44AB,
• and may be subject to penalty under Section 271B,
• though the ITR itself will be treated as validly filed under Section 139(1) (if filed before 10 Dec).

CBDT and courts have held that delay in audit report filing does not invalidate ITR, but penalty proceedings may be initiated separately.

Judicial Precedents

Several courts (including ITAT rulings) have clarified:

• Filing ITR within due date but delay in audit report does not make the return invalid,
  but penalty u/s 271B can be levied unless reasonable cause is proven.
• Example: CIT vs. Data Software Research Co. (P) Ltd. (Madras HC),
  ITO vs. Nanji Topanbhai & Co. (ITAT Mumbai).

CBDT’s Policy Intent Behind Separate Dates

The intention behind keeping two separate deadlines is to:

1. Give sufficient time for filing ITR after audit finalization.
2. Ensure all cross-linked details between audit and return are reconciled.
3. Avoid last-day portal congestion by staggering compliance load.

Practical Guidance for Tax Professionals

1. Finalize accounts and get client confirmation before uploading audit.
2. Upload audit report well before 10 November to avoid penalties.
3. Don’t assume CBDT will waive penalty - Section 273B relief is case-specific.
4. Ensure ITR filed after audit report is properly linked.
5. Maintain documentation for any delay (emails, technical screenshots, etc.).

Summary of Legal Consequences

The one-month gap between the audit report and ITR filing due dates is legally deliberate - to ensure the audit process is completed before filing the return.

However, filing an audit report after 10 November 2025 constitutes delay under Section 44AB, attracting penalty u/s 271B, even if the ITR is filed within 10 December 2025.

Therefore, taxpayers and Chartered Accountants must ensure:

Audit report uploaded by 10 November 2025, and ITR filed thereafter before 10 December 2025.

Timely coordination between auditor, accountant, and client is crucial for compliance and to avoid avoidable penalties.

1. What About Transfer Pricing (TP) Cases?

Here comes the controversy and clarification need.

Clause (a) of Explanation 2 to Section 139(1) specifically excludes taxpayers covered under Transfer Pricing provisions (Section 92E).
Instead, TP audit cases fall under Clause (aa) of Explanation 2.

Therefore, for assessees subject to Transfer Pricing audit (Form 3CEB):

• Tax Audit & Form 3CEB Due Date: 31st October 2025 → extended to 10th November 2025.
• Return Filing Due Date: 30th November 2025 (no extension given).

This creates a mismatch between audit and ITR deadlines.

1. The Disparity Explained

• Non-TP Audit Cases: Return due date = 10 December 2025
• TP Audit Cases: Return due date = 30 November 2025

Practical Implication:

Taxpayers having higher compliance requirements (international transactions requiring TP audit) now have shorter time for ITR filing - an anomaly that many professionals find illogical.

1. Example for Clarity

Example Scenario:

• Foreign Company A: Not subject to TP audit → gets time till 10 Dec 2025.
• Foreign Company B: Has international transactions → must file by 30 Nov 2025.

Despite having more complex compliance requirements, Company B gets less time.

Hence, professional bodies urge CBDT to align TP audit cases’ due dates with others, ensuring uniformity and avoidance of practical confusion.

1. Court Context

Interestingly, this CBDT press release came after:

• Punjab & Haryana High Court, and
• Himachal Pradesh High Court

both directed extensions for tax audit ITR filing up to 30 November 2025.

The CBDT’s decision partially accommodates these directions but provides only limited relief.

1. Relevant Provisions Cited

1. Professional Interpretation

What the CBDT Has Done:

• Extended audit report due date → 10 Nov 2025
• Extended ITR due date (non-TP audit cases) → 10 Dec 2025

What It Hasn’t Done:

• Extended ITR due date for TP audit cases (still 30 Nov 2025).

Expert Opinion:

“CBDT should consider extending the ITR due date for all audit cases uniformly to 10 December 2025. This ensures fairness and avoids confusion for multinational and TP-compliant taxpayers.”

Key Compliance Checklist for AY 2025-26

1. Non-Audit Cases: File ITR by 31 July 2025.
2. Tax Audit Cases (non-TP):
   • File Audit Report by 10 Nov 2025.
   • File ITR by 10 Dec 2025.
3. Transfer Pricing Cases:
   • File Form 3CEB & Audit Report by 10 Nov 2025.
   • File ITR by 30 Nov 2025.
4. Ensure no mismatch between audit report and ITR submission dates.
5. Avoid last-minute filing - e-verification issues or portal congestion may delay compliance.

1. Expected Formal Notification

CBDT clarified that:

“A formal order/notification to this effect will be issued separately.”

Professionals should watch for this official Notification under Section 119 in the coming days for precise legal effect and updated e-filing utility adjustments.

1. Conclusion

The latest CBDT extension offers welcome relief to taxpayers and auditors but leaves Transfer Pricing assessees out of parity.
It’s crucial for all professionals to note the distinction between Explanation 2(a) and 2(aa) to Section 139(1) while advising clients.

Timely compliance and accurate reporting remain the best defense against penalties and scrutiny.

Author:

Dr. Muhammed Mustafa C T
Senior Tax Consultant & Managing Director, BRQ Associates
“Educating India for Better Tax Compliance.”