All Gujarat Federation of Tax Consultants Vs Union of India (Gujarat High Court)
It is the case of the CBDT that it has declined to exercise its power under Section 119 of the Act as the conditions for exercise of such power do not exist. It is the case of the Revenue that the issue of hardship was dealt with considerably at the relevant point of time and that is the reason why three times the time limit came to be extended. The Board has now thought fit in the interest of the Revenue not to extend the time period any further. There are so many vital issues which the Revenue needs to keep in mind before taking such decision. The question is whether this Court should go into all such issues which weighed with the CBDT in taking a particular decision one way or the other and substitute the same with that of this Court on the ground that if the time limit is not extended, then the people at large would be put immense hardships? Interference at the end of this Court, at this point of time, in the matters relating to the Revenue may have far reaching implications. This Court may find it very easy to issue a writ of mandamus, as prayed for, saying that if the time limit has been extended in the past on three occasions, then why not for one last time upto 31st March 2021. However, such a line of reasoning or approach may upset the entire functioning of the Government and may lead to undesirable results.
In the overall view of the matter, we have reached to the conclusion that we should not interfere in the matter.
In the result, both the writ applications fail and are hereby rejected. At this stage, we may only observe that the CBDT may consider issuing an appropriate circular taking a lenient view as regards the consequences of late filing of the Tax Audit Reports as provided under Section 271B of the Act. We leave it to the better discretion of the CBDT in this regard.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. The operative part of the order passed by this Court dated 8th January 2021 in the Special Civil Application No.13653 of 2020 reads as under:
“21 We are of the view that the respondent No.1 – Union of India, Ministry of Finance should immediately look into the issue, more particularly, the representation dated 12th October 2020 at Annexure : I of the paper book (page 108) and take an appropriate decision at the earliest in accordance with law. We, accordingly, direct the respondent No.1 to do so. While taking an appropriate decision, the Union shall bear in mind the observations made by this High Court in the two above noted judgements, more particularly, the observations of the Supreme Court in the case of Vaghjibhai S. Bishnoi (supra) that the powers given to the CBDT are beneficial in nature to be exercised for proper administration of fiscal law so that undue hardship may not be caused to the taxpayers. The purpose is of just, proper and efficient management of the work of assessment and the public interest. One additional aspect needs to be kept in mind before taking any appropriate decision that the time period for the officials of the tax department has been extended upto 31st March 2021 having regard to the current covid19 pandemic situation. If that be so, then some extension deserves to be considered in accordance with law. Let an appropriate decision be taken by 12th January 2021.
22 Post this matter on 13th January 2021 on top of the Board.
23 Mr. Patel, the learned Senior Standing Counsel appearing for the respondents Nos.2 and 3 shall apprise this Court of any decision or development in the matter on the next date of hearing.”
2 Pursuant to the directions issued by this Court referred to above, the CBDT looked into the representation dated 12th October 2014 preferred by the All Gujarat Federation of Tax Consultants and is said to have also taken into consideration the other observations made by this Court in the order dated 8th January 2021.
3 The order under Section 119 of the Income Tax Act, 1961 dated 11th January 2021 declining to extend the time limit any further reads thus:
“F.NO. 370153/39/2020TPL
GOVERNMENT OF INDIA
MINISTRY OF FINANCE DEPARTMENT OF REVENUE (CENTRAL BOARD
OF DIRECT TAXES)
(TAX POLICY AND LEGISLATION DIVISION)
***********
New Delhi, 11th January, 2021
ORDER UNDER SECTION 119 OF INCOME TAX ACT, 1961
The Hon’ble Gujarat High Court vide judgement dated 8th January, 2021 in the case of The All India Gujarat Federation of Tax Consultants Vs. Union of India, SCA 13653 of 2020, has directed the Ministry of Finance to look into the issue of extension of due dates for filing of Audit Report under section 44AB of the Income tax Act more particularly the representation dated 12.10.2020 and take an appropriate decision in accordance with law.
2. In the wake of the global pandemic due to COVID19 the due dates for filing of income tax returns for A.Y. 202021 was extended vide the Taxation and Other laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (which was enacted on 29th September,2020) to 30th November, 2020. Subsequently, vide notification s.o. 3906(E) dated 29th October, 2020 the due dates for filing of returns were further extended to 31st January, 2021 for cases in which tax audit report under section 44AB of the Income tax Act (“the Act”) is required to be filed and 31 st December, 2020 for all other cases. Further vide notification S.O. 4805 (E) dated 31st December, 2020 the above due dates were further extended to 15th February, 2021 and 10th January, 2021 respectively.
3. As per the provisions of the Act the due date for filing of the audit report under section 44AB is one month prior to the due date of filing of income tax return. Therefore, the said due date was extended to 31st October, 2020 vide the Taxation and Other laws (Relaxation and Amendment of Certain Provisions) Act, 2020, 31st December, 2020 vide notification s.o. 3906(E) dated 29th October, 2020 and further to 15th January, 2020 vide notification S.O. 4805 (E) dated 31st December, 2020.
4. The due dates for payment of selfassessment tax, for taxpayers whose amount due does not exceed rupees one lakh, also coincide with the due dates for filing of income tax returns. The table below summarises the various due date extensions given:
