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

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