Deadline For Income Tax Returns : Gujarat High Court Asks CBDT To Decide On Extension By Jan 12

OBSERVATION OF THE COURT

The bench while analyzing the issue relied heavily on Vaghjibhai S. Bishnoi v. Income Tax Officer & Anr. (2013) wherein the Gujarat High Court has held that the powers given to CBDT are beneficial in nature and are to be exercised for a proper administration of fiscal law so that undue hardships is not caused to taxpayers.

The Court therefore directed the respondents to reconsider the issue and taken an appropriate decision by 12^th January 2021.

"The purpose is of just, proper and efficient management of the work of assessment and the public interest. One additional aspect that needs to be kept in mind before taking any appropriate decision that the time period of officials of tax department has been extended to 30st March 2021 having regard to the current covid-19 pandemic situation. If that be so, then some extension deserves to be considered in accordance with law. Let an appropriate decision be taken by 12^th January 2021." The order stated.

On December 30, the CBDT had further extended the deadlines for various filings of returns under the Income Tax Act. The deadline for individual filings was extended to January 10.

BACKGROUND OF THE CASE

The petitioner, The All Gujarat Federation of Tax Consultants, approached the High Court seeking directions on Central Board of Direct Taxation (CBDT) to extend the date of filing the Income Tax Returns (ITR) and Tax Audit Reports (TAR) for the annual year 2020-21 to 31.01.2021 in the wake of Covid-19 pandemic.

According to the petitioner, the CBDT after analyzing the pandemic situation last year, extended the due date for filing the tax audit report from 30^th September 2020 to 31^st October 2020 for those assessees who had to get their books of accounts audited. Therefore, the prayer seeks direction on Union of India, Ministry of Finance to ask CBDT for extending the due date of filing the Income Tax Returns (ITR) and Tax Audit Reports (TAR) from 31^st October 2020 to 31^st January 2021 by exercising the powers under Sec. 119 of the Income Tax Act, 1961.

The reason accorded by the petitioner in seeking the relief is that due to the pandemic condition and work from home guidelines, it was impossible for the Tax Practitioners to complete the audit work for the said period for issuance of certificate under Sec. 44AB of the Act within 30^th October 2020.

The following are the grievances of the petitioner:

• That the one month minimal extension provided for filing of ITR under sec. 139 of the Act is "meager" and therefore violative of Art. 14 and Art. 19(1)(g) for being ,manifestly arbitrary, discriminatory and unreasonable.
• That there is a duty upon Ministry of Finance to ensure that necessary utility for e-fling of the ITR is made available to various categories of assesses at the beginning of the assessment year so that the tax matters can be planned.

STAND OF THE RESPONDENTS

According to the respondents, the time limit of preparing the Tax Audit Reports was extended to 15^th January 2021 whereas for filing of the ITR, it was extended to 15^th February 2021 pursuant to the covid pandemic. This was done in three ways:

• The due date for filing income tax returns for 2020­-21 was extended vide the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 to 30^th November 2020 which was subsequently extended to 31.01.2021 for cases wherein tax reports had to be filed and for any other cases, the same was 31.12.2020.
• Since the date of filing tax audit reports was one month prior to due date for return, the due date of filing tax audit report was also extended to 31.10.2020 and thereafter extended to 31.12.2020.
• The due dates were further extended to 15.02.2021 for cases wherein tax audit reports were to be filed and 10.01.2021 for other case.

It was thereafter submitted that the Government of India has been proactive in analyzing the pandemic situation however, because the ITR and tax audit reports are considered essential part of obligation of assesses, the same cannot be delayed indefinitely. According to the respondents, many functions of the income tax department begin only after the returns are filed by the assessee.

It was also argued that it was from these tax collections especially in the times of pandemic that the Government could carry out relief work for poor and other health care facilities and any delay in the procedure would affect the collection of taxes and collection of revenue for Government.

Case Name: All Gujarat Federation of Tax Consultants v. Union of India

Date of Order: 08.0.2021