Tender bid rejection overturned due to unclear IT return requirements under Sections 44AB and 139

The HC ruled in favor of the petitioner whose bid was rejected for not submitting IT returns for a specific assessment year. The court found that the tender notice failed to clearly specify which years' IT returns were required. Since the petitioner's gross receipts exceeded Rs. 1 crore, statutory provisions under Section 44AB(a) and Section 139 of the Income Tax Act, 1961 provided until October 31st for return submission and auditing. The court held that respondents were not transparent in their tender requirements and directed that the petitioner's bid be considered valid, or alternatively, the petitioner should be given opportunity to submit the required IT return for assessment year 2023-2024 before bid evaluation.

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Issues:
The rejection of bid due to non-submission of IT return for the assessment year 2022-2023 as per tender condition.

Judgment Details:

1. The petitioner's bid was rejected for not submitting the IT return for the assessment year 2022-2023, a requirement specified in the tender notice.

2. The petitioner argued that as per Section 44 AB(a) and Explanation 2 of Section 139 of the Income Tax Act, 1961, the deadline for filing the IT return was the 31st of October of the assessment year, based on gross receipts exceeding Rs. 1 Crore for the year ending 31.03.2022.

3. The respondent's counsel contended that the tender notice explicitly mandated submission of IT return certificates for the last 3 years, including the year 2022-2023, regardless of the statutory deadline for auditing.

4. The Court noted that the tender notice lacked clarity on the specific years for IT return submission, causing ambiguity for bidders with gross receipts over Rs. 1 Crore, requiring audit as per Section 44 AB(a).

5. Referring to precedents, the Court emphasized the need for transparency in tender processes, as highlighted in the case of Dutta Associates Pvt. Ltd., stressing that tender conditions should be clearly stated to ensure fairness and openness.

6. Given the lack of specificity in the tender notice regarding the years for IT return submission, the Court deemed the rejection of the petitioner's bid unjustified and ordered the authorities to allow the petitioner to submit the IT return for the assessment year 2022-2023 for reconsideration of the bid along with other valid bidders.

7. Consequently, the Court set aside the rejection letter dated 07.09.2023 and allowed the writ petition in favor of the petitioner.

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