The Government is committed to Simplification of Laws so that there are minimal disputes in understanding & complying the provisions by the common man. GST had been introduced to consolidate & simplify the Indirect Taxes System. Income Tax has also been purportedly made simple and new Income Tax Returns & Form 26 AS have been introduced not only to simplify the forms but to gather the requisite information necessary for the proper assessment of Income. But in practical terms, are these forms simple enough for a common man or small businesses to fill on their own?

The complicated part of the various laws are the compliances and formalities to be complied with.  The most difficult part is filling up the lengthy and complicated forms. Any mistakes, whether inadvertent or due to inherent ambiguity, made in filling the Tax forms can be detrimental to the assessee in as much as additions can be made, exemptions denied and even penal provisions applied in such cases. The worst part of filling these forms is that the common man, the small businesses and the salaried persons do not find it comfortable to fill the said forms and have to take services of the legal fraternity to do the needful which entails time &  expenditure. With more and more information required by the government, the forms whether for direct or indirect taxes are becoming voluminous and extraordinarily arduous and intricate.

The Apex Court was hearing a case on Friday 19 June 2020 which related to time limit prescribed under Rule 117 of Central Goods and Services Tax Rules, 2017. 

The Delhi High Court had ruled that Rule 117 is directory and not mandatory and hence time limit of 3 years under the residuary provisions of the Limitation Act 1963 would apply since credit of taxes paid on inputs is a vested right.The High Court had ruled that several taxpayers were unable to file the form GST TRAN-1 due to inefficiencies of the GSTN portal which was beyond the control of the taxpayers. The government had challenged this order before the Supreme Court, which asked the Solicitor General to look at various technical snags that may render a taxpayer unable to fill up TRAN-I forms.

“Shouldn’t the government be more receptive when technological constraints and deficiencies deny people of the benefits they are otherwise entitled to?…

We are of the belief when there is no negligence on the part of a party but it is due to the technical difficulties then the government should not penalize the industries.” remarked the Court. The bench shared its concerns with the Solicitor General, who had appeared on behalf of the Central Government in this matter.

To substantiate the difficulties in filing the intricate Tax Returns and the complicated Filing Process, Justice Khanna, a member of the said bench told the SG that it took him One Full Day to file his own Income Tax Returns. Thus, the Hon’ble Judge  echoed the sentiments of the taxpayer community who try to file their ITRs on their own. He emphatically exhibited concern over the process of filing income tax returns which was such that he could not finish the job earlier.

The remarks of the  top Judicial Body clearly establish the inherent difficulties in filling up the complex forms which are mandatory in nature. In the wake of the said remarks,  it is incumbent on the Government to simplify the Income Tax Returns so that even a common man can fill the same in a short time without any difficulty & external assistance

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One Comment


    I have repeatedly posted the difficulty in filing ITRs. Why should not the Government ask for a day to day income/expense statement and collect tax accordingly?

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March 2021