CA Srivatsan Ranganathan

Srivatsan RanganathanAfter much hullabaloo the CBDT has issued the circular of extending due date to 31/10/15. What would have happened if the order was not issued in the first place?

1. Contempt of court petition can be filed for states who have got a writ to their favour. What is the penalty? Imprisonment or fine? Who will be imprisoned? Some scapegoat bureaucrat or say chairman of CBDT. The professional community would have never wanted this definitely all they want is respectable ears for their genuine request. In the end the judicial process going thus the need or the want?

2. Government/CBDT would have filed a SLP and if the same was never heard or heard or dismissed say nearer to 31/10/15 again would have been a Phyrric victory. That much of genuine cases where proper return/audit/tax collection would have been possible all have would have gone down the drain. Suppose the petition was heard before and extension granted then scenario is one of uncertainty until such extension. The 24 hour hiatus of issuance of extension between last evening to now, what events changed, nothing. But the uncertainty did definitely keep every law abiding and return filing client/professional in tenterhooks. Was it worth the uncertainty Mr. FM?

3. The fact of CBDT thinking that if the P&H high court/Gujarat high court alone have granted the writ then we will issue the circular only for those two states. Was it not myopic of a legislation which spreads to all over India? Will it not invite discrimination under violation of fundamental rights? Why did the CBDT or the FM not think of this or come clean explaining the rationale why is it they could not extend the timeline but simply issue press notes? Is this worthy of transparency of the tax body or of the FM who speaks of certainty and transparency of tax regime?

4. If the intent of the FM or CBDT was not to issue the extension until closure of banking hours to milk as many tax cows as possible, then it is understood from the Govt.’s perspective. For a minute step aside and think if that many filings were wrong or did not collect the full taxes? Does the CBDT has the wherewithal to pick and scrutinize every such filing done on the 11th hour?

5. There are sections like 200A where there is also a fee for belated filing for TDS returns. Judiciary has held the constitutionality of the same and the existence of the section citing belated tax returns cause extra manpower and efforts from the tax department’s dimension thus are valid? What would happen if all the returns filed on the 11th hour were all wrong or had corrections on it in some form or other? Do they not involve that much extra efforts or manpower requirements?

6. The Professional community also have a reason to be blamed. Year on year the extensions have been done so once bitten twice shy. Why not the CBDT or the technical wing of CBDT come up with a cut off date for the forms and issue them and stick on the problems and support them with enough staffs and manpower? They open special counters for return filing? Why not so many call center/helpdesks which genuinely pay heed to the technical problems. In the end if the professional community has expressed a genuine difficulty, then at least one need not keep windows open until 31.10.15 but at least accommodate the mutual need.

7. What CBDT or the technical division is not sure of why would they need to release it? Example was the tax audit form. On 24.09.2015 if they had to amend the same, what is the onus and responsibility the Govt. or the machinery takes on its actions? Left to the lurch of the court/professionals when asked? Where is the action for this from the CBDT? In the end it cannot be the poor babu/bureaucrat/scapegoat here as well. Who is the one who authorized the release of the version? Make it public and bring in trust into the system? Then professional community will offer a bigger holding hand to make it working.

8. It is not the Govt. of India who collects the taxes. It is the professional community who make their clients deliver year on year on the audits/reports/tax money thereby enriching the Govt./CBDT. They legislate and administer that’s all. Just as the GDP of the country impinges on the action of every you and me, the entire body/officers/the departments if they are to run successfully; it needs the work of the businessmen/taxpayers/professionals supporting it. For a minute stop the writs and think what will happen if no tax payer or only a miniscule of the entire business or tax payer or professional community file using the portals issue reports/do return filings? Or what will happen if all these people boycott the whole system making a mockery of the systems/legislation/process? Do you have a solution to tackle the mass boycott Mr. FM?

9. It is heartening that the professional community or the tax payers/filers have never thought of a boycott thus. Non-cooperation can come in different forms. This year the CBDT has seen it in the form of writs, it is not far when the professional/filers come up and boycott the process and hold the CBDT or the ministry to ransom. If the truckers do this country comes to a standstill everyone gets into a talk/resolution mode? If FII’s do this by pulling out money, then justice AP Shah is appointed to bring it to a rest. Was something thus done for our own people/professionals? Why because they are forbearing/kind and courteous to not to hold the country or the bureaucrats to ransom or because they do not join hands? What would have happened if all the bodies who all had filed the writs joined and filed a writ in the Supreme court. Definitely the apex court would have heard it as a PIL more than a simple writ. Would the CBDT or the FM woken up to a SLP then?

The idea is not to win laurels by penning this but if the writing is on the wall for people as an eye opener that “yes I would have done the same thing as on the black and white here” , then time Mr. FM/CBDT to wake up to the voices of people.

(Author can be reached at  sibirabi@gmail.com)

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0 responses to “Some soul searching on the extension of tax audit/return filing”

  1. Sripriya Kumar says:

    Extremely well written and thought provoking ..

  2. Kailash Kejriwal says:

    CA Srivatsan Ranganathan needs to be complimented for the bold and eye opener article on the CBDT and Finance Ministry attitude towards CA profession on the relevant subject. It is high time the institute is in strong and learned hands to make govt bodies hear our representations in a receptive mood. Extreme steps are not warranted on the part of the profession . However sometime we need to show our strength in a positive manner to make politicians and govt officials understand that our role is equally important in the financial system of the country.

  3. Naveen says:

    unfortunately,
    FM(Mr Jetly) is a politician, surrounded by parasites, therefore, He can’t understand how the work is done.
    he can give speeches but can’t work

    secondly, he might be jealous of PM’s fame and trying to defame PM, i.e. trying to pass a message, all happened in PM’s good governance with quotation “Sabka Saath….”

  4. Satish says:

    Sir, one wonders why ICAI never approaches court to protect the interest of it’s members. Approaching court is legal…the ICAI governing body lacks the courage to take on government even-though it’s members suffers. Audit u/s 44AB and filing of income tax return is the most important professiional activity carried out by CAs and ICAI never fought hard enough for this. They just made useless representations.

  5. VIVEK SEHGAL says:

    It appears that F.M and CBDT Chairman have no respect for the sentiments of the professional community. The professional body of C.As and various professional bodies requested in advance for extension of time for Tax Audit/Audit and filing of ITR for the A.Y 2015-2016 and gave reasons to the CBDT and met personally to both FM and CBDT Chairman but they refused and lastly said that they will consider it. Once Hon’ble Punjab & Haryana High Court had directed for extension, they should have immediately extended the date but the Govt. chooses to give mental shock to the professional community and their staff. The judgment of the Hon’ble Bombay High Court is a big blow to CBDT Chairman and to the F.M.
    At last professionals come out with victory but no body will realize that how much tax professionals, their staff and family members have suffered.

  6. Ramaswamy T S says:

    Dear Professional Colleagues:

    I wonder which way we the “partners in nation building” are heading for by following the series of responses. Instead, why not guide the clients to keep the accounts update always and you pro-actively work to ensure that all returns are filed within two months of closure of financial year ! Do you have to go to court for such issues? Fight on principles, on points of law, not such silly issues. You are held in high esteem by the Society, and live up to it. Rgds.

    • Naveen says:

      Sir,
      with due respect to your honor, it seems you are still a dummy article assistant.
      My clients returns were ready to be uploaded in the month of April 2015; but your honor didn’t allowed the same until 4th august 2015.
      hope u can understand the things now better.

  7. ADV. S PRAKASH says:

    SO NICE LET THE PM READ THIS KINDLY UPLOAD IN INTERACT WITH PM PORTAL.ONE CAN NOT UNDERSTAND WHETHER THE CBDT AND THE FM CAN NOT UNDERSTAND THE SIMPLE PROBLEMS OF THE TAX PROFESSIONALS AND THE TAX PAYERS.HOW THE TAX POLICIES AFTER ALL ARE MADE FOR THE PUBLIC AND FOR THE SMOOTH COLLECTION OF THE REVENUE TO THE GOVERNMENT.IF THE CBDT MAKES ITS SO COMPLICATED FOR THE GOVERNMENT, DO WE HAVE TO THINK THE CBDT IS REQUIRED? WHY THE FM CAN NOT HANDLE THE CBDT PORTFOLIO? WHEY A PERSON WHO IS IN THE TAIL END OF HIS/HER SERVICE SHOULD BE MADE AS CHAIRMAN OF THE CBDT? I HOPE THIS IS THE RIGHT TIME TO THINK THAT THE CBDT SHOULD BE SCRAPED, ALONG WITH THE 44AB AUDIT FOR NON-CORPORATE ASSESSEES AND AN INDEPENDENT CBDT SHOULD BE REPLACED WITH THIS OLD CBDT.AT LEAST FOR THE A.Y 2016-17 YOU HAVE STILL TIME KINLDY THINK AND CONSULT ALL THE PARTIES AND KEEP READY THE ITR’S, SOFTWARE, SERVERS AND ANY OTHER REQUIREMENTS FOR SMOOTH FILING OF THE RETURNS FOR THE A.Y 2016-17.OR KINDLY OUTSOURCE THE CBDT TO OUR KARNATAKA VAT DEPT WHICH IS MAINTAINING A BEAUTIFUL SERVER AND GOOD FACILITIES UNDER KVAT FOR E-FILING.

  8. ram babu B.Com says:

    To ensure that every year this is not repeated, act itself has to be changed thus…”the return has to be filed within 2/3 months from the date the ITRs are made available in the incometaxindiaefiling.gov.in site”
    ??? EVERY YEAR. In the case of assessees where audit is necessary large firms have approached. But what about others i.e ITR 1,2,3,4 who want to file early, for various reasons could not file. Who will go to court on their behalf.

  9. S. Rajagopalan says:

    Excellent article and well written. Instead of having this Tamasha every year, section 139 should be amended for tax audit cases to 31st October like old days so that every one has time. First 2 months is gone for 26AS to be updated since the last date for filing TDS return is 15th May. Moreover 143(3) notices for AY 2014-15 have been issued asking the assessee or his representative ( Auditors) to appear in the last 10 day of Sept to ensure that assessee’s got the notices in time. This takes away lot of time for Auditors to go and file Power of Attorney in various places in big cities where offices are located in 2 to 3 places as in Chennai. Moreover AGM’s of companies are also being held around that time where auditors have to be present. Best thing is to shift the due date to 31st October of each year and there will be sufficient time for every one and no complaints from anybody. Will the CBDT and Finance Minster listen ?

  10. Kailash says:

    WEll said.it should reach to our FM and PM. pls don’t adopt adamant view in Governance, otherwise people will revolt. Be good listeners.Those who were asking more time were the honest taxpayers and the Tax evaders. Don’t take them on ride

  11. rkd says:

    Well said and well written,but who listens ? You should write to the PM and apprise him about the role of CBDT.What is the use of giving extension on 01.10.2015.Next year atleast the CBDT /FM/PM should plan in advance and ensure that there are no technical glitches.

  12. Balaji says:

    The notification/ communication issued on 1 Oct 2015 after a prolonged tussle between professionals and administrative machinery was unwarranted, wasteful and only helped some people to score brownie points.

    The Hon’ble PM had the time to listen to Indian Diaspora and address some of the tough questions but no one in the Finance Ministry could respond with even 50% speed on genuine problems faced at home!!!!

    This tax “jungle raj” has successfully achieved the following goals

    1. Overload the judicial system with such matters which had arisen due to the highhandedness of certain people

    2. Ensure that the professional community is filled with unwarranted tension (students, articles, managers, partners and the unfortunate small businessmen) and helped CBDT to show that they are powerful without any accountability (thank you for reinforcing this and for this we are eternally grateful); for some months we thought people power is greater that Babu’s power!!!!

    3. Reinforce the belief that doing honest and diligent work in India is very very difficult and sometimes can become fatal (to ones own health!!!)

    4. Ensure that we following the principles of secularism as enshrined; no enjoyment of any festivity due to impending “difficult to achieve” deadlines

    Suggestion:

    1. The Hon’ble FM should fix a date before which the forms for next AY should be released- this should be monitored and in each issue of CA/ ICWA/ CS journal the status of the progress should be published

    2. The officials responsible for this fiasco should be sacked without pension benefits; it is not a eye for eye policy but harshest punishment for misuse of the tax payer machinery to protect one’s authority (recently VW Chairman resigned)

    3. All the current members of the CBDT should be strict watch for performance and they will not be eligible for their next year’s increments (as happens in well run organisations)

    4. CBDT should work on pilot project to reduce the work involved in TDS filing; this will reduce the unproductive time and effort on filling and filing and refiling and again refiling TDS returns

    5. Ensure that 3CD does not exceed 10 clauses

    6. Information disclosed in Form 3CD should not be part of information sought again in the scrutiny proceedings

    The above suggestions are only suggestions. many of you are more intelligent and may actually have something better to offer. Let us be positive even in these times of challenges and contribute

    Jai Hind

  13. Kishore says:

    The CBDT took more than 4 months to release the tax return forms. If a company wanted to file its return in April or even June or July, it was prevented from filing it. Then why this ego problem to give one month to the CAs/ assessees? Mr Modi’s government has lost so much goodwill in the process. The bureaucratic army is hell bent on not changing its ways. What happend to the biometric attendance in revenue departments, no mention even in the Department’s action plan for the year !and The whole of Australia has one CIT, we have an army of CITs, Pr CITs, CCITs and PrCCITs !

  14. Ca Suniiel R Karbhari says:

    Respected IRS and CBDT needs to understand that even though Assessee and Tax Dept are like Rail track,parallel to each other,Engine of the Economy needs both the tracks to reach its destination.And what is aimed by I Tax dept ,assessee Friendly tax administration based on SIX Sigma principles ,may possibly be a distant dream unless not only Information Technology is used cent percent but the Administrative Discretions are equally subjected to scrutiny by Information Technology .Recently ,in one of the hearings before Hon.SC ,Court appreciated an argument of an advocate,when he pointed out that when Income Tax Act is applicable to whole of India,why assessee from one state should not be allowed to use favourable citation of another state High Court.So friends when the Intentions of I Tax dept are well defined ,one fails to understand the adamant attitud e towards the assesses..Its pity to see Revenue Secretary giving public apology when the decisons not to extend the date ,were taken by highest administrative body of I Tax .

  15. chirag sheth says:

    perfectly true…and it should be posted on the twitter of our tech savy PM and FM..they are our elected representative and not the bureaucrats..

    • Tejpal Shah says:

      Your tweets will not reach PM or FM, their twitter handles are managed by third party agencies. And they received hundreds of tweets daily; so only a few lucky twits will manage to reach them. Chill yaar… it’s India !

  16. CA Atul Kumar Khemka says:

    Very rightly said Sir – An excellent article and we professionals also need to do some soul searching and we need to educate out clients also
    This filing of writ is not only the responsibility of professional bodies but the trade associations should have also come in our support but it seems they were totally unconcerned

  17. V K khanna says:

    Excellent article. The CBDT should Learn lessons from the mistakes theyhave committed on this important issue at every step. When the ITR forms were issued late, the CBDT on their own, should have extended the due date, without the intervention of the High Courts. They made a blunder when they issued the orders extending the due date selectively for a couple of states without realising its implications. Where was the Ministry of Law ? What was it doing when the orders were issued? Was it not their duty to advise the CBDT that their so called wise actio would be violative of Art.14 of the Constitution of India? Or did the CBDT acted on their own to show compliance of the High Courts directives? The general public would like to know, as the precious time was lost leaving majority of assessees in lurch. When the CBDT realised their mistake that their order would be discreminatory and issued general order by superceding the earlier orders, making it applicable to all assessees across the country, it was too late as most of the assessees had filed their returns by then. What a waste of time and resources, for which the CBDT alone is responsible.

  18. shailesh S says:

    Well said Sir!!!

  19. CA.Sameer Karnik says:

    Why all the concerned parties keep quite once they get the extension of date for ITR & TAR filing ?
    ITR & TAR filing should be given minimum 3 months after the Accounts get approved in the AGM . The last date to hold AGM under the Companies Act is September, even under the new CA 2013.
    Fix a specified last date for issuing of Forms & schemas by CBDT .
    The above will end harassment to all the concerned parties.
    Why not file a petition right now with Finance ministry to Extend the due date for TAR filing in the Act/Rules itself.
    All concerned parties should be signatories to the above petition.
    I humbly request the Council members of ICAI & the members of various business bodies to take upi the matter when the iron is hot right now.

    • Tejpal Shah says:

      ICAI has been established under a Central Law and is one of the regulatory bodies of the Central Government. Why should other Government bodies be allowed to play a big brother role vis-a-vis ICAI. Now time has come and ICAI has got to assert its esteemed position as a regulator.

      • G S Krishnan says:

        Year after year this is going to happen. The elected members gain good posts with govt. influence. Bureaucrats make their as usual. Govt., will not view this as their political issue. How we are managing bad roads, polluted water, air etc., in every day ordeal, like wise we have to muster this also. Pray God to save ourselves from ruthless rulers.

  20. L S Kothari says:

    very true…FM had remained silent on this crucial matter perhaps under pressure from bureaucracy. It is now clear that the bureaucracy and the indian government is heading towards tax terrorism.

  21. Umesh Pancholi says:

    Mr F M / C B D T is a more intelligent

  22. CA RAJESH CHANDER GUPTA says:

    CBDT must file a SLP before the Hon’ble Supreme Court so that country men must know the truth/ motive behind non extension of ITR/TAR. CBDT must respect the ICAI and must address all the requests made by the accounting regulator in a proper and respectful manner. In case ICAI feels that time provided for tax audit is inadequate and makes representation to the CBDT, then how it can take action against the members for errors/mistakes in tax audit report, in event of its application been rejected by the CBDT.

  23. CA SANTOSH SINGASANE says:

    PLEASE PUBLISH SUCH ARTICLES IN THE LEADING NEWSPAPERS, FOR THE INFORMATION OF ALL TAX PAYERS, AND LET THE PUBLIC SPEAK ON THIS MATTER, WE PROFESSIONALS ARE ALWAYS UNDER PRESSURE FOR THE COMPLIANCE AND DUE DATES, LET THE WORLD KNOW WHAT THE TAX AUTHORITIES ARE DOING.

  24. Tejpal Shah says:

    PM said at the Facebook HQ that his Government listens to its people through social media on real time basis. I disagree with his statement. Our Government hardly care even for the representations made in person, leave alone the social media.

    It is grossly insensitive to the aspirations of the business community and professionals. Nothing has changed in the way the taxpayers and professional are treated at any tax offices anywhere in India.

    • SUNIL DATT says:

      THERE WILL BE NON OPERATION IN MANY WAYS MR FM/ CBDT, WE RESPECT A LOT MR.

      MODI AND WHO ARE NOT LISTENING TO PEOPLE PROBLEM MR. FM/ CBDT, WHY YOU KEEP

      MUM ALL THE TIME AND EXPECT ASSESSEE TO PAY HUGE REVENUE.

  25. manish parekh says:

    Sir, its nothing but the sheer misuse of unwarranted powers enjoyed by highly egoistic IRS, IAS officers – where nobody is able to question them for the delay in devising & releasing few ITR forms in time, inspite of having the whole governmental machinery at their disposal – while at the same time they have the arrogance of going to Supreme Court against the very reasonable & practical High Court directions. They are enjoying same powers bestowed under the those ACTS devised during British Raj wherein they wanted to give this COMPLEX OF INFERIORITY in public minds so that they can make merry. Have seen highly respected knowledgeable CAs, Advocates, consultants stand with folded hands in front of an ordinary officer for fear of harassment – aka british raj”

  26. Tejpal Shah says:

    Finally the doctor arrived… but, sorry to day, when the patient was already dead! I guess this is a novel way of “Ease of Doing Business in India.” Credibility lost for no reason and that too on a non-issue. PM’s efforts to project India before the international business community, as good place to partner with, has gone waste once again. Incredible India and its Bureaucracy.

  27. Indian says:

    The bureaucracy especially CBDT is still filled with UPA legatees and the mad Arun Jaitley is driving Modi to wall by following the advise of these UPA sponsored morons. He even made one such moron as CVC. It is time for Modi to sack Jaitley, who has become his biggest liability. Obviously the devilish lawyer brain of Jaitley would have worked in extending time limit only for states where High Courts allowed writs. Economy will improve only if this FM goes and Modi takes full charge by appointing someone like Manmohan on the lines the great P V Narasimha Rao.

    • Anil says:

      Still embracing MMS?

      • Indian says:

        MMS as FM did wonders under the leadership of PV. I am not talking about MMS as dummy PM under Sonia. What I meant was we need an economist like MMS as FM not the loser Jaitley.

    • Tejpal Shah says:

      Most appointees in the present bureaucracy are still loyal to previous UPA government and are pursuing UPA agenda to malign Mr. Modi and his team. Sack them all immediately and bring in professionals, not simply from IRS and IAS but experts in their respective fields, as once suggested by Mr. Narayan Murthy.

  28. Anil says:

    Sir, due regards to author, but para 8 is not in good taste.

  29. pai says:

    NOW WE SHOULD DEMAND AMENDMENT IN LAW FOR FILING RETURNS AND REPORT WITHIN SO MANY DAYS FROM DATE OF NOTIFICATION OF FORMS BY CBDT AND NOT AS PRESENTLY PRESCRIBED 30TH SEPTEMBER OR 31ST JULY THIS WILL END ALL OUR PROBLEM OF FIGHTING IN COURT OF LAW FOR EXTENSION OF TIME FOR DELAY IN NOTIFIYING FORMS BY CBDT. WE SHOULD ALSO DEMAND TIME LIMIT FOR CBDT TO NOTIFIY FORMS IN INCOME TAX LAW

    • Tejpal Shah says:

      I am of the view that Sec. 271B should be amended as follows –

      “If any person fails to get his accounts audited in respect of any previous year or years relevant to an assessment year or furnish a report of such audit as required under section 44AB, shall pay , by way of late fees, a sum equal to Rs. 2,500/- per day of delay, one-half per cent of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such previous year or years or a sum of one hundred fifty thousand rupees, whichever is less.”

      Late fee of Rs. 2,500/- per day of delay should be made mandatory and be paid before furnishing of the return. In 60 days it will sum up to Rs.1,50,000/- as it is at present for even a single day’s delay. Maximum cap should be kept as it is today. This will reduce the last minute rush in uploading tax audit reports and returns. This will improve the quality of audit and will also ensure some extra revenue for the Government in case of delay, well before the the case is finally assessed. And under the present penalty provisions, I don’t think Government collects any noticable amount by way of penalty u/s. 271B.

  30. RAJMOHAN says:

    Yes Mr. Srivatsan. You rightly pointed out it. Our Government is not different from the colonial one. The thinking is not different. One set to Rule and others to be ruled!. The extension is only helped those defaulted. All genuine tax payers tried and filed the returns at the last minute.

  31. Varaprasad Daitha says:

    It is worth to demand how can CBDT extend the time limit which had already expired. Can it give instructions applying retrospectively?

  32. Mohamed Nawaz Haindaday says:

    A very well written article. The need of the hour is for all tax professionals to take up this issue very seriously before the end of a financial year. This situation has been repeating every year as due dates near. It is now clear that regardless of who is in power, the objective of governance is to torment tax payers and tax professionals insofar as tax administration is concerned. At least in terms of compliance, since government has increased the areas of compliance that spread over the entire year, it would be good governance if tax filings and audit reports filing is spaced out in such a manner that it enables tax professionals to concentrate on their work without bothering at the back of their mind of due date pressure.

  33. Pramod Bothra says:

    Dont you think that date of tax audit extended on 1.10.15 is senceless. Either the authorities should not have increased the date or it should have been increased by 20th october. Now it is clear that there is supremacy of bureaucrat over the government, the adamency of the system cannot be changed either by BJP or congress.

  34. Kumar says:

    Government is not fair. They reduced the time for filing citing reduction of time for assessments from March to December. Later the assessment time was restored to March but tax audit time remains reduced. Be fair my government!

  35. Satish says:

    Sir, It seems PMO must have felt the injustice to the tax payers and tax consultants after clear cut verdicts by the courts and directed the Finance ministry to mitigate the injustice. The finance ministry was never in mood to listen and was behaving like ‘King can do no wrong’! The move to extend the due date after the original due date is over is funny. The tax dept is acting like a tax department controlled by some other enemy state. Such ant-people attitude by a finance minister who is a well known and able supreme court lawyer, will be remembered forever…

  36. Sachin Agarwal says:

    VERY WELL AND CORRECTLY SAID… VERY IMPRESSIVE DRAFTING… MAKE IT READ TO OUR FM AND BOARD MEMBERS… CIRCULATE THE SAME AS MUCH AS YOU CAN.

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