High Court directs CBDT to review petition for filing extension, waiving interest, emphasizes fair consideration

The High Court directed the Central Board of Direct Taxes to review a petition seeking an extension of the due date for filing Tax Audit Reports and Income Tax Returns by another 15 days. The Court instructed the CBDT to consider waiving interest and issue a speaking order before a specified date. The judgment highlighted the importance of addressing the challenges faced by taxpayers and Chartered Accountants in complying with the revised reporting formats, emphasizing fair consideration in such matters.

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Issues:
Extension of due date for filing Tax Audit Reports and Income Tax Returns.

Analysis:
The Rajasthan Tax Consultants Association filed a public interest litigation seeking an extension of the due date for filing Tax Audit Reports (TARs) and Income Tax Returns (ITRs). The petitioner argued that the Central Board of Direct Taxes (CBDT) made continuous alterations in the reporting formats essential for e-filing TARs and ITRs, causing difficulties for taxpayers, especially those whose accounts require auditing under Section 44AB of the Income Tax Act, 1961. The changes introduced by CBDT in Form 3CD were highlighted, making the forms more detailed and comprehensive, increasing the burden on Chartered Accountants. Due to system failures and late introduction of 'Schema'/'Utility,' the due date for filing ITRs was extended, leaving Chartered Accountants with limited time to comply with TARs. The petitioner cited similar judgments where High Courts mandated the extension of due dates for filing TARs and ITRs in comparable situations.

The learned Additional Solicitor General representing the respondents contended that CBDT had already considered the matter for extension of the due date to a reasonable extent. However, if further grievances persisted, the petitioner should approach CBDT by filing a representation for due consideration based on genuine difficulties faced by taxpayers and Chartered Accountants. Considering the submissions, judgments, and the fact that CBDT had already extended the due date for non-audited accounts without interest, the Court directed CBDT to review the petitioner's representation and decide on extending the due date by another 15 days. The Court also instructed CBDT to consider waiving interest under Explanation 1 to Section 234A of the Act and make a decision by issuing a speaking order before a specified date.

In conclusion, the High Court disposed of the writ petition, providing a copy of the order to the learned Additional Solicitor General for compliance. The judgment emphasized the need for CBDT to address the concerns raised by the petitioner regarding the extension of due dates for filing TARs and ITRs, ensuring a fair consideration of the challenges faced by taxpayers and Chartered Accountants.

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