'Such Decision Must Have Been Taken After Due Deliberations': Gujarat HC Refuses To Interfere With CBDT's Decision To Not Extend Deadline For Filing ITRS

The Gujarat High Court on Wednesday declined to interfere with the decision of the Central Board of Direct Taxes (CBDT), to not grant any further extension for filing of Audit Reports and Income Tax Returns for the Assessment Year 2020-21. "We believe that such decision must have been taken after due deliberations, and in taking such decision, many financial experts must have applied their minds," observed a Division Bench of Justice JB Pardiwala and Justice Ilesh J. Vora while upholding the executive Body's decision. The last dates for filing (i) Returns (for non-audit cases) is January 10, 2021; (ii) Tax Audit is January 15, 2021; and (iii) Returns (for tax audit cases) is February 15, 2021. Last week, the Gujarat High Court had directed the Board to take a decision on representations seeking extension of due dates. Vide order dated January 11, the Board rejected all such representations while stating that any delay in filing returns affects collection of taxes and other welfare functions of the state for the vulnerable and weaker sections of society which is funded through the revenue collected. 'Govt Needs Revenue To Carry Out Relief Work For Poor In These Difficult Times': CBDT Declines Further Extension Of Due Dates For Filing ITRs The Board was of the view that sufficient time has already been given to taxpayers to file their tax returns and any further extension will adversely affect the return filing discipline and shall also cause injustice to those who have taken pains to file the return before the due date. After considering this order on Wednesday, the High Court observed, "It is true that the Board is vested with the power under Section 119 of the Act to extend the due date and the powers are discretionary in nature and that is the reason why we thought fit to ask the CBDT to look into the matter and take an appropriate decision in accordance with law. If the CBDT has looked into the matter closely and has arrived at the conclusion that the extension of time limit would not be in the interest of the Revenue, then it cannot be said that the CBDT has failed to exercise its discretionary powers vested in it under Section 119 of the Act. When there is a power coupled with duty, there is an obligation on the Board to exercise the same if the facts so warrant. Upon due consideration of all the relevant aspects of the matter, if the Board has taken the final decision not to extend the time limit any further, then it is difficult for this Court to issue a writ of mandamus to the Board to extend the time limit on the assumption that undue hardship would be caused to the taxpayers and the tax professionals, more particularly, in view of the latest data put forward before us by the Revenue." Petitioners' Arguments Disputing the CBDT's order dated January 11, the Petitioners had submitted that the order is nothing, but an eyewash as the Body had failed to address the core issue arising in this litigation. The primary grievance of the Petitioners was that the CBDT had not addressed the issue that utilities for filing the Tax Audit Report and the Income Returns were released at a belated stage. It was alleged that the utilities were released almost after a period of more than five months despite there being a mandate from that the utilities should be released not later than 1st April of the financial year. [All Gujarat Federation of Tax Consultants vs. Central Board of Direct Taxes [2014] 50 taxmann.com 115 (Gujarat)] It was pointed out that even if the two subsequent extensions granted by the CBDT are taken into consideration, then the total time available is only 85 days instead of 183 days. The Petitioners submitted that the Board had failed to appreciate that by inordinate delay in releasing the utilities, the time available with the tax practitioners is considerably curtailed and they are finding it very difficult to prepare the Returns of Income and Tax Audit Reports before the due date. CBDT's Submissions The Board on the other hand claimed that the principal argument canvassed on behalf of the writ applicants as regards the delay in releasing the utilities for filing the Tax Audit Reports and Income Tax Returns has been "blown out of proportion". It argued that the updates brought about in the ITR do not amount to adding or extending the fields. It submitted that certain "minuscule" changes were made so as to enable the taxpayers to report correctly. "Tax Audit work undertaken by the writ applicants is in no manner affected by such amendment minuscule changes or updates which are provided in the existing fields. No prejudice could be said to have been caused warranting any interference at the end of this Court in exercise of writ jurisdiction under Article 226 of the Constitution of India," the Body submitted. It was further submitted that the Tax Audit Report Utility was made...

'Such Decision Must Have Been Taken After Due Deliberations': Gujarat HC Refuses To Interfere With CBDT's Decision To Not Extend Deadline For Filing ITRS

Akshita Saxena

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