Download Gujarat HC Judgment on Extension of ITR Due Date

62. Here, we notice that subsequent to the representation made on 21^st August, 2014, the CBDT could have responded to such representation by either acceding or refusing to the request of extending the period of filing of ITR and making it extendable upto 30^th November, 2014. Ordinarily, in such circumstances, the Court would direct the authority to consider the representation and pass a specific order. In wake of the constrains of time, as the due date of the filing of the return is expiring on 30^th September, 2014 and when the respondent Board has chose not to respond to the same, but, later on by offering the comments before this Court in writing in no uncertain terms, it has termed such a request impermissible and has chosen to refuse the same on the ground that all the grievance made by the petitioners are not sustainable. Therefore, considering the larger cause of public good and keeping in mind the requirement of promotion of justice, we chose to exercise the writ of mandamus directing the CBDT to extend the date of filing of return of income to 30^th November, 2014, which is due date for filing of the TAR, as provided in the Notification dated 20^th August, 2014.

63.  Such extension needs to be granted with the qualification that the same may not result into non-charging of interest under section 234A. Simply put, while extending the period of filing of the tax return and granting benefit of such extension for all other provisions, interest charged under section 234A for late filing of return would be still permitted to be levied, if the Board so choses for the period commencing from 1.10.20 14 to the actual date of filing of the return of income. Those tax payers covered under these provisions if choose to pay the amount of tax on or before the 30^th September, 2014, no interest in any case would be levied despite their filing of return after the 30^th September, 2014.

63. This may provide requisite safeguard against the possible loss to the Revenue as at the base of its apprehension and denial for invoking the powers was such loss, due to deferred

64. We are not inclined to stay new utility for one year as sufficient measures are already taken by the Board to redress this grievance. However, it needs to be observed at this juncture that any introduction or new utility/software with additional requirement in the middle of the year ordinarily is not desirable. Any change unless inevitable can be planned well in advance, keeping in focus that such comprehensive process re-engineering may not result in undue hardship to the stakeholders for whose benefit the same operates.

65. In the light of the above discussion, these petitions succeed and are, accordingly, allowed. The respondent Board is directed to modify the notification dated 20th August, 2014 issued in exercise of powers under section 119 of the Act by extending the due date for furnishing the return of income to 30th November, 2014. It would, however, be open for the Board to qualify such relaxation by extending the due date for all purposes, except for the purpose of Explanation 1 to section 234A of the Act. Rule is made absolute accordingly, to the aforesaid extent with no order as to costs.

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78. Under sub-section (2) of section 119 of the Act, the legislature had enumerated the sections, the provisions whereof the Board is empowered to relax, however, section 44AB of the Act does not find place therein. It is, therefore, clear that section 119 of the Act does not empower the Board to relax the provisions of section 44AB of the Act. Thus, prima facie, the exercise of powers under section 119 of the Act for extending the due date for obtaining and furnishing of report of audit under section 44AB of the Act is without any authority of law. In Kerala Financial Corporation v. Commissioner of Income Tax, (1994) 4 SCC 375, the Supreme Court has held that what section 119 has empowered is to issue orders, instructions or directions for the “proper administration” of the Act and for such other purposes specified in sub-section (2) of the section. Such an order, instruction or direction cannot override the provisions of the Act; that would be destructive to all the known principles of law as the same would really amount to giving power to a delegated authority to even amend the provision of law enacted by the Parliament.

78. At this juncture it may be pertinent to note that section 44AB of the Act provides for getting the accounts of an assessee of the previous year audited by an accountant before the specified date and to furnish report of such audit by that date in the prescribed form, setting forth such particulars as may be prescribed. As to what is the “specified date” is provided under clause (ii) of the Explanation to section 44AB which postulates that “specified date” in relation to the accounts of an assessee of the previous year relevant to an assessment year, means the due date for furnishing the return of income under sub-section (1) of section 139. It would, therefore, be necessary to examine as to what is the due date for furnishing return of income under sub-section (1) of section 139 of the Act.

79. On a combined reading of the above provisions, it is abundantly clear that the expressions “specified date” in section 44AB and “due date” in section 139 of the Act are inextricably linked together. The legislative intent is clear. Namely that, the due date for filing return of income and the specified date for furnishing tax audit report under section 44AB of the Act should be the same. The Board in exercise of powers under section 119 of the Act, therefore, cannot issue any circular or notification which is contrary to the legislative intent and the scheme of the enactment which envisages that the “specified date” and “due date” should be the same. The inevitable conclusion, therefore, is that the Board could not have extended the due date of filing tax audit report alone without extending the due date for filing return of income as that would amount to overriding the provisions of the Act. Moreover, the very fact that section 119 of the Act does not empower the Board to relax the provisions of section 44AB of the Act, clearly reflects the legislative intent not to permit relaxation of the “specified date” without relaxing the “due date”. Had the legislature intended to permit relaxation of the specified date for furnishing tax audit report alone, it would have included section 44AB in section 119 of the Act.

80. Moreover, it appears that the Board was also conscious of the fact that it does not have the power to relax the provisions of section 44AB of the Act and therefore, what is extended in the notification dated 20^th August, 2014 is the “due date” for obtaining and furnishing the report of audit under section 44AB, whereas the language employed by the legislature in relation to section 44AB is the “specified date”. Since the “due date” for filing return under section 139 of the Act is the “specified date” as envisaged under section 44AB of the Act, the Board appears to have consciously used the expression “due date” and not “specified date” in the said notification. However, it cannot be gainsaid that there cannot be two due dates, one for the purposes of filing of return under section 139 of the Act and the other for the purpose of determining the specified date under section 44AB of the Act.

81. Nonetheless, for the purpose of extending the due date for obtaining and furnishing the report of audit under section 44AB of the Act, the Board, in exercise of powers under clause (a) of sub-section (2) of section 119 of the Act, can relax the provisions of section 139 of the Act and can extend the due date for filing the return of income, in which case, the specified date under section 44AB of the Act would stand automatically extended. Therefore, the Board, if at all it was of the view that it was necessary to extend the due date for obtaining and furnishing the report of audit under section 44AB of the Act, could have resorted to extending such date only by extending the due date for filing the return of income under section 139 of the Act. For this reason also, the Board ought to have extended the due date for filing the return of income under section 139 of the Act so as to maintain the same date for furnishing the return of income and tax audit report. It appears that the sole reason which has weighed with the Board for not extending the due date for filing the return of income under section 139 of the Act, is that by doing so the due date of self-assessment tax would get automatically extended and the payment of self-assessment tax would be deferred by the tax payer to 30^th November 2014. As suggested by the learned counsel for the petitioners, this situation can be taken care of by extending the due date for filing return of income under section 139 of the Act for all purposes except for the purpose of Explanation I to section 234A of the Act, in which case, the interests of the revenue would also be protected.

82. This court is conscious of the fact that the period of filing return of income is prescribed under sub-section (1) of section 139 of the Act and in exercise of powers under Article 226 of the Constitution, it would not be permissible for this court to extend such period as the same would amount to legislation on the part of the court. However, as noticed earlier, the Board isduly empowered under sub-section (2) of section 119 of the Act, to relax the provisions of section 139 of the Act, whereas there is no power to relax the provisions of section 44AB of the Act. The Board, however, by the notification dated 20^th August, 2014, has relaxed provisions of section 44AB of the Act for assessment year 2014-15 without extending the due date for filing the return of income. Thus, in the absence of any statutory power vested in the Board to relax the provisions of section 44AB of the Act, the notification dated 20^th August, 2014 has no legs to stand on its own. The only remedy available for the Board to sustain the validity of the notification is to extend the due date for filing return of income under section 139 of the Act in exercise of powers under section 119 of the Act.

83.  Another way of looking at the matter is that the notification dated 20^th August, 2014 extends the “due date” for furnishing the report of audit. Insofar as the provisions of section 44AB of the Act are concerned, the expression “due date” is found only in clause (ii) of the Explanation thereto which is the date of furnishing the return of income under sub­section (1) of section 139. Therefore, the notification itself could be construed as having extended the due date for filing return of income under section 139 of the Act. However, the stand taken by the Board does not admit any such

84. In the aforesaid circumstances, having regard to the fact that the Board has no power to relax the provisions of section 44AB of the Act, it would be in the fitness of things if with a view to bring the notification dated 20^th August, 2014 within the ambit of its jurisdiction, the Board relaxes the provisions of section 139(1) of the Act by extending the due date for filing the return of income till 30^th 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.

85. In the light of the above discussion, the petition succeeds and is, accordingly, allowed in terms of paragraph 65 of this judgement. Rule is made absolute accordingly, to the aforesaid extent with no order as to costs.