Representation by BCA to FM on difficulties being faced/likely to be faced by Assessees while filing Return of Income

Re:  Hardships and Practical Difficulties being faced/likely to be faced by Assessees while filing the Return of Income for A.Y.2009-10, in view of directions contained in CBDT Circular No.03/2009 Dated 21.05.2009

We refer to the CBDT Circular No. 03/2009 dated 21.05.2009 in connection with the filing of the Income Tax Returns for A.Y. 2009-2010. 

We appreciate the efforts made by CBDT with regards to e-filing of the Returns which has got desired results.

However, your honour will appreciate that an assessee is concerned primarily with proof of filing the Income Tax Return with the Department. The acknowledgement bearing the stamp of Income Tax Office is very much preserved and used by the assessees for various purposes including compliances under Income Tax Act, obtaining Bank loan, obtaining Visa/Passport, registration with various government authorities etc.

Under the present scheme, the acknowledgement form i.e., Form ITR-V was required to be signed by assessee either digitally or manually. In case the return is furnished with digital signature, the date of uploading the return electronically as mentioned in ITR-V is treated as date of filing of the Return. Same position continues even for filing of return for A.Y. 2009-2010. So long as the assessee has uploaded the return with digital signature, there is no problem whatsoever.  However, large number of assessees [especially, non-corporate assessees] do not keep/possess digital signatures for various genuine practical reasons.  Therefore, they are not covered by this procedure.

In case the return is uploaded without a digital signature, in the last year [i.e. Asst. Year 2008-2009], the assessee was required to furnish the acknowledgement form ITR-V duly signed with the Assessing Officer having jurisdiction over his case within 15 days from the date of uploading the return electronically. This enabled assessees to get an acknowledgement from Income Tax Department for having furnished ITR-V with the concerned officer having the jurisdiction. If the physical acknowledgement is dated within 15 days from the date of furnishing the return electronically, the return is deemed to have been furnished on the date on which it was uploaded and date of acknowledgement No. mentioned in ITR-V was treated as the date of filing the return.

However, from the Asst. Year 2009-10, in view of the above referred circular, the position has been drastically changed and made difficult. Those assessees furnishing the returns without digital signature are facing and are also likely to continue to face unintended difficulties and hardships for the following reasons:

(1)               The ITR-V duly signed by the assessee has to be furnished by ordinary post to Department, Centralised Processing Centre, Post Box No.1, Electronic City Post Office, Bangalore – 560 100, Karnataka within 30 days after date of uploading the data electronically. The assessee may not have in his possession any acknowledgement as the ITR-V is to be sent by only Ordinary Post.  Unfortunately, no other mode of sending the same is feasible under the new system and hence, the assessees will have to rely only on the efficiency of the postal department.  If such ITR-V does not reach the CPC at Bangalore within the specified period of 30 days, the return of income electronically transmitted by the assessee will become automatically invalid.

(2)      Under the new system, the assessee gets to know about the fact and date of receipt of such ITR-V by the CPC at Bangalore only when he receives the intimation by E-Mail to that effect from the CPC and till then, uncertainty continues and the assessee is effectively helpless to do anything in that regard.

(3)    All the assessees do not have an e-mail ID to receive the e-mail in due course from CPC, Income Tax Department, Bangalore and acknowledgement for having furnished such ITR –V.

(4)   The vagaries of the Postal Department are too well-known to be commented upon and assessee will be at the mercy of GOI, Postal Department over which neither CBDT nor the assessee has any control.

(5)   Though assessees have started receiving e-mail from CPC stating that their return submitted electronically will be valid only if ITR-V is sent to CPC within 30days, such e-mails are ordinarily sent by CPC after 20 days of furnishing.

(6)         Number of claims such as carry forward and set of losses and allowances, claim of deduction u/s.80 and various other benefits depend very much upon filing of the return on or before due date mentioned u/s. 139. Assessee will have to undergo a serious hardship, if such claims are disallowed in future for no fault on his part merely because some other Agency, in this case – the Postal Department, caused the delay and the assessee has nothing on hand to prove that he had done whatever was required. The onus that is likely to be cast on the assessee is going to be of a serious nature over which he will have no control whatsoever.

(7)               Since the return will be deemed to have not been furnished at all in case duly signed ITR-V is, for some reasons or other, not delivered to CPC, assessee will be saddled with the litigation on liability for payment of interest u/s. 234A, 234B and levy of penalties u/s.271(1)(c) etc.

In view of the above, the assessees will have to face undue hardships without any fault on their part.  Apart from this, is it fair to expect every such assessee in the country from different places [however remote it may be] to send such ITR-V to Bangalore by post?  Consider the cost involved in aggregate for the country as a whole [though, unfortunately, that has to borne by the assessees] and the unnecessary avoidable huge extra burden on the already over-burdened postal department.  Will this not be severe national waste?

Why should taxpayers be not permitted to furnish such ITR-V at their respective places in the Office of Assessing Officer or at any centralised places in the Local Income-tax Office and thereafter, the department can forward the same to CPC at Bangalore?  This will also enable the assessee to get proper acknowledgement with regard to the date on which such ITR-V is submitted so that there remains no ambiguity about the date of their furnishing the same and consequent date of furnishing return of income. Is it unreasonable on the part of the Tax-Payers to expect such reasonable procedure?

In view of the above, it is earnestly requested that the procedure followed in the last year [Asst.Year 2008-2009] for furnishing returns of income in such cases should continue to be followed and the assessees, after transmitting their returns of income electronically, are permitted to submit such ITR-V in their respective Local Income-tax Offices.

We believe that an urgent action is needed in this regard on the above line so that the members of our organization and the taxpayers in general do not continue to suffer on account of above referred new system introduced.

Thanking you,

Sincerely yours,

Ameet Patel,               Kishor Karia                    Rajesh Shah

President,                     Chairman,                          Co-chairman,

Taxation Committee,         Taxation Committee,

CC:

(1)               Shri S.S. Palanimanickan, Hon.Union Minister of State for Finance.

(2)               Shri S.S.N. Moorthy, Chairman, CBDT.

(3)               Shri Rahul Gandhi, Gen.Secretary, Indian National Congress.