Pavai Varam Educational Trust Vs Central Public Information officer & ITO (Madras High Court)
Madras High Court has set aside the tax assessment order against Pavai Varam Educational Trust for the assessment year 2020-21, citing that the petitioner had filed its tax returns and audit report within the extended deadlines allowed due to the COVID-19 pandemic. The petitioner argued that while the original deadline for filing the income tax return was October 31, 2020, and for the audit report was September 30, 2020, these were extended under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act (TOLA Act) to March 31, 2021. The trust filed its audit report on February 14, 2021, within the extended timeframe. However, the tax authorities disallowed the expenses and raised a demand, stating that the audit report was not submitted within one month before the return filing deadline, as required under Section 12A(1)(b) of the Income Tax Act.
The High Court noted that the government had extended the due dates due to the pandemic, and the petitioner had adhered to the revised timelines. The court ruled that the disallowance of expenses and the subsequent demand were unjustified, as they did not consider the notifications issued by the Central Board of Direct Taxes (CBDT). Accordingly, the court directed the tax authorities to remove the consequential demand from the online portal and allow the petitioner to upload any necessary documents. The writ petition was allowed, with no order on costs.
