Late ITR Filing- "Solve Technical Glitch On IT Portal": Gujarat HC Asks Centre On Plea Seeking Waiver Of Late Fee, Interest & Penalty

The Gujarat High Court has sought the reply of the Central Government on a plea moved by seeking waiver of interest, late fees, and penalty in case of Late filing of Income Tax Returns and various reports of audit for the A.Y. 2021-22.

The Bench of Justice J. B. Pardiwala and Justice Nisha M. Thakore was hearing the plea of Chartered Accountants Association, Surat highlighting the difficulties experienced by the assessee in uploading the audit report for the purpose of filing the Income Tax Return on account of technical glitches in the portal.

The case in brief

Chartered Accountants Association, Surat (Petitioner) moved the Court stating that for the purpose of uploading the audit report on the IT Portal, the assessee has to generate the Unique Document Identification Number (UDIN), however, on account of technical glitches in the Portal, the Chartered Accountants are finding it very difficult to upload the audit report.

It was their specific plea that even after generating the UDIN on account of some technical problems in the Portal, the audit reports are not being uploaded.

Against this backdrop, they argued that since the audit report is not getting uploaded, therefore, the returns will not be filed in time, and in turn, this would entail interest under Sections 234A and 234B respectively, late fees under Section 234F and penalty under Section 271B of the Act respectively.

Thus, moving to the Court, the petitioner primarily prayed for a direction to the respondents to not charge interest u/s 234A, interest u/s 234B, late fees u/s 234F, and penalty u/s 271B for late filing return of income which is due to the inefficient and defective portal resulting also into loss of time, energy, and resources of all the stakeholders.

Court's order

At the outset, the Court noted that the issues of penalty, interest, etc. would arise when the final order of assessment is passed. Even for the purpose of penalty under Section 271B, it is necessary to issue a notice to the assessee.

"If the assessee has not been in a position to file his return in time on account of his inability to upload the audit report on account of technical glitches in the Portal, he can always point out all such circumstances beyond his control when he is called upon to show cause as to why penalty should not be imposed," the Court further added.

However, the court did ask the Centre to attend to the technical glitches, which are being experienced in the Portal at the earliest as it is within the control of the Centre and if there are any technical problems in the same, only the Centre can take care of such problems, the Court said.

Significantly, during the course of the hearing, Devang Vyas, the Additional Solicitor General of India received information that CBDT has issued a Circular extending the timeline for filing the income tax return, and various reports of audit for the A.Y. 2021-22 till 15th February, 20222.

On consideration of difficulties reported by taxpayers/stakeholders due to Covid & in e-filing of Audit reports for AY 2021-22 under the IT Act, 1961, CBDT further extends due dates for filing of Audit reports & ITRs for AY 21-22. Circular No. 01/2022 dated 11.01.2022 issued. pic.twitter.com/2Ggata8Bq3

— Income Tax India (@IncomeTaxIndia) January 11, 2022

With this, the Court posted the matter for February 8, 2022, to enable the respondents to file their counter. The court has also said that further progress in the matter with regard to the technical glitches be reported to the Court on the next date of hearing. 

Advocates Avinash Poddar & Nipun Singhvi appeared for the petitioner.

Case title - CHARTERED ACCOUNTANTS ASSOCIATION, SURAT v. UNION OF INDIA

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