2022 (1) TMI 947 - HC - Income Tax

Court addresses concerns over Tax Audit Report and Income Tax Return deadlines, emphasizes smooth portal functioning

The Southern Gujarat Income Tax Bar Association, Surat Versus Union of India And 1 other (s)

The Southern Gujarat Income Tax Bar Association, Surat Versus Union of India And 1 other (s) - TMI Issues Involved:1. Extension of the due date for filing Tax Audit Report (TAR) and Income Tax Returns (ITR) for the assessment year 2021-2022.2. Levy of interest under Section 234A of the Income Tax Act, 1961.3. Acceptance of TAR and ITR in physical form due to technical glitches in the new Income Tax Portal.4. Invocation of Section 271B for late filing of the audit report.5. Provision for filing TAR/ITR in physical form pending resolution of technical issues.Detailed Analysis:Issue 1: Extension of Due Date for Filing TAR and ITRThe petitioner sought an extension of the due date for filing the Tax Audit Report and Income Tax Returns for the assessment year 2021-2022 till March 31, 2022. The court noted that the Central Board of Direct Taxes (CBDT) had already extended the due date to February 15, 2022, as per Circular No. 01/2022 dated January 11, 2022. The court appreciated the extension but emphasized the need for the portal to function smoothly to make the extension effective.Issue 2: Levy of Interest under Section 234AThe petitioner requested that no interest under Section 234A be levied until the revised due dates provided in Circular 17/2021 dated September 9, 2021. The court acknowledged the issue but did not provide a ruling on this matter, noting that a separate writ application concerning Section 234A was already pending before the High Court. This issue would be addressed when the pending writ application is taken up for hearing.Issue 3: Acceptance of TAR and ITR in Physical FormThe petitioner argued for the acceptance of TAR and ITR in physical form due to technical glitches in the new Income Tax Portal. The court recognized the difficulties faced by the assessees due to portal issues. However, the respondents clarified that filing TAR and ITR in physical form or via email was not feasible due to the existing electronic processing system. The court directed the respondents to ensure that any technical glitches be resolved promptly to facilitate smooth filing.Issue 4: Invocation of Section 271B for Late Filing of Audit ReportThe petitioner sought a direction that Section 271B should not be invoked for late filing of the audit report and that physical filing should be considered sufficient compliance. The court did not directly address this issue but emphasized that any technical difficulties faced by the assessees should be taken into account by the authorities to avoid penal consequences.Issue 5: Provision for Filing TAR/ITR in Physical Form Pending Technical ResolutionThe petitioner requested permission to file TAR/ITR in physical form pending the stabilization of the new Income Tax Portal. The court discussed this issue with the respondents, who assured that all necessary steps would be taken to resolve technical issues promptly. The court appreciated the efforts of the CBDT and the assurances given by the respondents to address the technical glitches and facilitate smooth filing.Conclusion:The court concluded that no further adjudication was required as the CBDT had extended the due date for filing TAR and ITR and had taken steps to address technical issues. The court suggested creating a dedicated email ID for ITR issues, similar to the one for TAR, which the respondents agreed to implement. The court closed the writ applications, taking on record the affidavit filed by the respondents and appreciating the cooperation of all parties involved.Separate Judgments:No separate judgments were delivered by the judges; the judgment was delivered by Honourable Mr. Justice J.B.Pardiwala on behalf of the bench.