Consider extension of Income Tax Due dates: Gujarat HC

The Hon'ble Gujarat High Court directed CBDT to take appropriate decision regarding extension of Due date for Tax Audit Reports (TAR) and Income Tax Returns (ITR) by 12 January, 2021 in the THE ALL GUJARAT FEDERATION OF TAX CONSULTANTS Versus UNION OF INDIA (Order Dated 08/01/2021).

Mr. S. N. Soparkar, the learned Senior Counsel for the writ applicant, Gujarat Federation of Tax Consultants submitted that having regard to the COVID-19 pandemic situation, the CBDT thought fit to extend the due date for filing the tax audit report from 30th September 2020 to 31st October 2020 in the case of all those assessees who are required to get their books of account audited. Th Senior Counsel urged the Court to issue a writ of mandamus to the Union of India, Ministry of Finance, to ask the CBDT to exercise its powers vested in it under Section 119 of the Income Tax Act, 1961 by extending the due date of 31st October 2020 at least for three months i.e. upto 31st January 2021 for the purpose of both : (1) filing the ITR and (2) tax audit report in case of assessees whose accounts are required to be audited. 

The Senior Counsel also represented that in the data released by the CBDT, for 2019 as many as 55% of the Income Tax Returns and Tax Audit Reports were filed outside of office hours which shows the sheer burden of workload upon the Tax Practitioners to work overtime to complete the assignment. He also submitted that the Ministry of Law and Justice has in fact recognized the reality of the situation and extended en mass time limits (except otherwise specified) of the specified Acts to 31st March 2021 which falls during the period from 30th March 2020 to 31st December 2020 vide the Taxation and Others Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.

"It is submitted that the amendment in rules and disclosure requirements as late as on 1st October 2020 has effectively given only 30 days (as opposed to extended 214 days) to the Chartered Accounts to furnish the Tax Audit Report. Also, the belated issuance of the ITR forms have also curtailed the effective time period. Any user who file e-return will have to create an XML file based on the schema." the learned Senior Counsel said.

The Division bench of Justice J.B.Pardiwala and Justice Ilesh J. Vora said that the respondent authority must bear in mind that the powers given to the CBDT are beneficial in nature to be exercised for proper administration of fiscal law so that undue hardship may not be caused to the taxpayers.  The purpose is of just, proper and efficient management of the work of assessment and the public interest.

"One additional aspect needs to be kept in mind before taking any appropriate decision that the time period for the officials of the tax department has been extended upto 31st March 2021 having regard to the current covid­19 pandemic situation. If that be so, then some extension deserves to be considered in accordance with law. Let an appropriate decision be taken by 12th January 2021,” the court said.

  Report