Tax Bar Association Vs Union of India (Rajasthan High Court)
The Rajasthan High Court issued an interim order directing the Central Board of Direct Taxes (CBDT) to extend the due date for furnishing Tax Audit Reports (TARs) under Section 44AB of the Income-tax Act, 1961, for Assessment Year (AY) 2025-26 from September 30, 2025, to October 31, 2025.
The order was passed in a Public Interest Litigation (PIL) filed by the Tax Bar Association, which alleged that taxpayers were facing persistent and widespread technical glitches on the Income-Tax e-filing portal. The Association cited issues including the delayed release and frequent modification of audit utilities (Form 3CA-3CD and 3CB-3CD), portal login failures, difficulties in registering Digital Signature Certificates (DSCs), OTP failures, and data mismatches between the Annual Information System (AIS), Tax Information System (TIS), and Form 26AS.
The Department countered that the e-filing system was robust and operational, highlighting the successful filing of over 2.73 lakh TARs for AY 2025-26 and the resolution of isolated grievances. The Department argued that the low filing numbers were due to the common tendency of taxpayers to wait until the deadline.
However, the High Court noted a significant disparity in filing statistics compared to the previous year (AY 2024-25), where over 13.81 lakh TARs were filed by the corresponding date, contrasting sharply with only 2.73 lakh TARs filed for AY 2025-26. The Court found this substantial shortfall, coupled with the delayed availability of utilities, the recurrence of technical issues, and the previous extension granted for individual ITR filings, to be a prima facie indication of systemic disruption and a risk of widespread non-compliance. The Court emphasized that TARs are complex and voluminous, necessitating additional time.
