P&H HC judgment directing CBDT to extend ITR due date to 31.10.2015

Brief of the case:

In the instant petition petitioners sought relief by way of writ under article 227 of the constitution of India and prayed before court that due date of filing ITR should be extended upto 31.10.2015. It was argued that due to failure in notification of forms by respondents returns could not be filed on time. Various decisions in other writ petitions filed in various high courts of the country were also considered and finally court admits that there is need to extend the due date of filing ITR.

Facts of the case:

• The petitioners are practicing Chartered Accountants and are based at Chandigarh and different places in the State of Punjab.
• The petitioners have grievance that respondents failed to notify the prescribed forms for filing ITR and Tax Audit Report. Due to which petitioners could not file their returns of their clients in time.
• Petitioners specifically stated that respondents were aware about the essence of time in filing returns and besides this fact respondents didn’t notify necessary forms in time.
• On account of the said delay on the part of the respondents in notifying the said forms, the tax payers of the concerned i.e. on which tax audit is applicable, categories suffered a grave prejudice as due to the same, the forms were not available to the said categories of tax payers as on 1.4.2015.
• The respondents issued Press Release dated 9.9.2015, Annexure P.1 not to extend the date for filing return from 30.9.2015 for certain categories of assessees including companies, firms and individuals engaged in proprietary business/profession etc. whose accounts are required to be audited in terms of Section 44AB of the Act.
• Aggrieved thereby, the petitioners were before high court through the instant writ petition with the prayer for extension of the due date for filing income tax returns.

Relief sought in the instant writ petition:

• It was only after 1.8.2015, 2.8.2015 and 7.8.2015 that the income tax return Forms No. 4, 5 and 6 respectively were available for downloading by the assessees. In such circumstances, the last date fixed for e-filing of income tax return for the assessment year 2015-16 by the assessees, being 30.9.2015 is unreasonable and is liable to be extended.
  

Contention of the revenue:

• In the assessment year 2015- 16 as compared to the earlier assessment year, only some minor modifications have occurred in the ITR 5, 6 and 7 forms and the relevant scheme. Therefore, there does not exist any greater compliance burden on the tax payers this year as compared to the earlier year.
• In the last two years, CBDT got representations from various stakeholders mentioning that some tax payers were finding it difficult to upload the audit report because of the newly introduced e-filing system as well as frequent changes in e-filing utility. After due consideration of various representations and keeping in view the fact that e-filing of audit report had been made mandatory for the first time and some difficulties were being encountered in e-filing of audit reports for the assessment years 2013-14 and 2014-15 by the tax payers, the CBDT invoked its powers under Section 119 of the Act to extend the due date.
• No averment has been made by the petitioners as to the statutory mandate being violated or rules not being followed or any specific violation of any statutory rights.
• The factual position for filing of the returns in the instant year is totally different from the last year.
• In a Public Interest Litigation (PIL) Hon’ble Rajasthan High Court in The Rajasthan Tax Consultants Association and another vs. The Union of India and another, D.B. Civil Writ (PIL) Petition No.11037 of 2015, has declined to interfere by referring that it is a policy decision of the Government and had relied upon decision of the Delhi High Court in Avinash Gupta vs. Union of India and others, W.P.(C) No.9032 of 2015 case dated 21.9.2015 where the writ petition was dismissed for extension of time.
  

Contention of the petitioners:

• On representation to Finance Minister, Govt. of India office memorandum dated 24.9.2015 was issued by Government of India, Ministry of Finance, department of Revenue, Central Board of Direct Taxes, with reference to the observations of this Court, it has been inter alia stated as under:-

“Since returns in ITR 4, 5 and 6 were mandatory required to be e-filed, no assessees in these categories could have filed their returns of income for assessment year 2015-16 before 1st, 2nd and 7th August 2015 respectively.”

• A copy of the document from the website of the income tax department containing Form 3CD on which audit report was required to be filed was also produced by learned counsel for the petitioners. There were certain modifications made on 24.9.2015 itself.
• The petitioners could not file ITR due to the failure in notifying prescribed forms by respondents.
  

Held by the court:

• The application of the appellant for a writ of ‘certiorari’ and for other reliefs was maintainable under Articles 226 and 227 of the Constitution. In a ‘Writ of certiorari’ under Article 226 of the constitution of India the High Court can only annul the decision of the Tribunal but under Article 227 high court can issue further directions in the matter.
• In the present case, Form Nos. 4, 5 and 6 were prescribed on Ist, 2nd and 7th of August 2015 respectively when the audited accounts were required to be appended for e-filing of the return under Sections 139C and 139D of the Act.
• It has been admitted by the respondent department in the office memorandum dated 24.9.2015 that since returns in ITRs 4, 5 and 6 were mandatorily required to be e-filed, no assessees in these categories could have filed their returns of income for the assessment year 2015-16 before 1st, 2nd and 7th of August 2015 respectively.
• Under Section 119 of the Act, the Board has specific powers to pass general or special orders in respect of any class or class of cases by way of relaxation of any of the provisions of the Act which also includes Section 139 thereof.
• For avoiding the genuine hardship in any case or class of cases, the Board if considers desirable and expedient, by general or special order, it can issue such orders, instructions and direction for proper administration of this Act.
• The Board has not only to see the public interest for so doing but also for avoiding the genuine hardship in any particular case or class of cases when such powers can be exercised.
• It was not disputed by the revenue that the forms were not available on the very first day of the assessment year as required.
• The revenue could not furnish any satisfactory explanation or justification for not prescribing Forms 4, 5 and 6 prior to Ist, 2nd and 7th August, 2015 respectively. The plea of the department that there were only minor changes in the forms is not justified. Thus, the period required for e-filing of the return is held to be not reasonable.
• In Tax Bar Association, Hisar vs. The State of Haryana and others, CWP No.15499 of 2015 decided on 30.7.2015, a Division Bench of this Court considering the issue relating to extension in time for filing the returns under the Haryana Value Added Tax Act, 2003 had extended the date for e-filing of returns upto 10.8.2015.
• A Single Bench of the Delhi High Court in Avinash Gupta vs. Union of India and others, W.P.(C) No.9032 of 2015 decided on 21.9.2015, had the occasion to consider the issue relating to extension of time for e-filing of return beyond 30th September 2015.The writ petition was dismissed but certain observations were recorded therein that the prescribed format to be filed alongwith the return should be notified by Ist day of the assessment year.
• The Gujarat High Court in All Gujarat Federation of Tax Consultants vs. Central Board of Direct Taxes, Special Civil Application No.12656 of 2014 decided on 22.9.2014 while delving into identical issue held that keeping in view the facts and circumstances of the case, it would be in the fitness of things if the Board relaxes the provisions of Section 139(1) of the Act by extending the due date for filing the return of income till 30th of November 2014 as a direct consequence whereof, the specified date for obtaining and furnishing the report of audit under Section 44AB of the Act would get automatically extended.
• This court have already expressed its dissent with the order passed by the Delhi High Court in Avinash Gupta V.s UOI (Supra) qua dismissing the writ petition with regard to extension of time for e-filing of the income tax returns. Accordingly, we are unable to concur with the view expressed by the Rajasthan High Court in The Rajasthan Tax Consultants Association and another vs. UOI (Supra).
• After taking into consideration of facts and circumstances of the case, it is considered appropriate to extend the due date for e-filing of returns upto 31st October 2015 for which the CBDT shall issue appropriate notification/instructions under Section 119 of the Act. Direction is also issued to the respondents to ensure that the forms etc. which are to be prescribed for the audit report and for e-filing the returns should ordinarily be made available on the first day of April of the assessment year.

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