[Opinion] E-Filing Glitches Delay ITR Filing for Audit Cases

CA Ashish Gupta – [2025] 178 taxmann.com 523 (Article)

The Income Tax Return (ITR) filing season for the Assessment Year (AY) 2025-26 is entering its crucial phase. The deadline for submitting ITRs for non-audit cases (i.e., taxpayers not liable for audit under the Income Tax Act, 1961) was September 16, 2025. That date has already passed. Attention has now shifted to taxpayers subject to the tax audit under Section 44AB of the Income Tax Act. These taxpayers are required to file their ITR on or before October 31, 2025.

Though the law clearly states different due dates depending on the category of taxpayer, the Income Tax e-filing portal is not yet aligned with these provisions. The system is treating 16th September 2025 as the due date, regardless of whether the actual due date is 16th September, 31st October, or 30th November (for transfer pricing audit cases). This causes serious difficulties for taxpayers and professionals trying to file their returns on time.

Let’s discuss the two main issues faced by taxpayers:

1. Opting out of the new tax regime

Under the Income-tax Act, taxpayers have the option to choose between the old tax regime (with deductions and exemptions) and the new (default) tax regime under Section 115BAC. Taxpayers opting out of the new regime are required to file Form 10-IEA within the due date applicable to them.
However, the e-filing portal currently displays an error message when taxpayers attempt to opt out of the new regime after September 16, 2025. The system assumes that the due date has already expired. As a result, taxpayers in the audit category who have a legal deadline until 31st October are being prevented from exercising their statutory rights. This is creating unnecessary hardship as taxpayers are unable to file their ITR under the regime they actually want to choose.

2. Levy of a late fee of Rs. 5,000

As per Section 234F, a late filing fee is levied if a taxpayer fails to file ITR within the due date. For AY 2025-26, this fee is Rs. 5,000 (where total income exceeds Rs. 5 lakh).

Unfortunately, the portal automatically levies a late fee of Rs. 5,000 in cases where returns are filed after September 16. This is completely contrary to the Income-tax Act, which allows time for audited cases until October 31st (and November 30th for TP audit).

The automatic levy not only causes financial hardship but also creates unnecessary compliance burdens, as taxpayers will be forced to later raise rectification requests or grievances, or not file their ITR now and wait for the issue to be fixed.