F.NO. 370153/39/2020-TPL

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

(CENTRAL BOARD OF DIRECT TAXES)

(TAX POLICY AND LEGISLATION DIVISION)

New Delhi, 11th January, 2021

ORDER UNDER SECTION 119 OF INCOME TAX ACT, 1961

The Hon'ble Gujarat High Court vide judgement dated 8^th January, 2021 in the case of The All India Gujarat Federation of Tax Consultants Vs. Union of India, SCA 13653 of 2020 = 2021 (1) TMI 338 - GUJARAT HIGH COURT, has directed the Ministry of Finance to look into the issue of extension of due dates for filing of Audit Report under section 44AB of the Income tax Act more particularly the representation dated 12.10.2020 and take an appropriate decision in accordance with law.

2. In the wake of the global pandemic due to COVID-19 the due dates for filing of income tax returns for A.Y. 2020-21 was extended vide the Taxation and Other laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (which was enacted on 29th September, 2020) to 30th November, 2020. Subsequently, vide notification S.O. 3906(E) dated 29th October, 2020 the due dates for filing of returns were further extended to 31st January, 2021 for cases in which tax audit report under section 44AB of the Income tax Act ("the Act") is required to be filed and 31st December, 2020 for all other cases. Further vide notification S.O. 4805 (E) dated 31st December, 2020 the above due dates were further extended to 15th February, 2021 and 10th January, 2021 respectively.

3. As per the provisions of the Act the due date for filing of the audit report under section 44AB is one month prior to the due date of filing of income tax return. Therefore, the said due date was extended to 31st October, 2020 vide the Taxation and Other laws (Relaxation and Amendment of Certain Provisions) Act, 2020, 31st December, 2020 vide notification S.O. 3906(E) dated 29th October, 2020 and further to 15th January, 2020 vide notification S.O. 4805 (E) dated 31^st December, 2020.

4. The due dates for payment of self-assessment tax, for taxpayers whose amount due does not exceed rupees one lakh, also coincide with the due dates for filing of income tax returns. The table below summarises the various due date extensions given: -

S. No.	Action	Original Due Date	1st Extension vide TOLA, 2020	2nd Extension vide notification S.O. 3906 (E) dated 29.10.2020	3rd Extension vide notification S.O. 4805 (E) dated 31.12.2020
1.	Return for Non-Audit Cases	31.07.2020	30.11.2020	31.12.2020	10.01.2021
2.	Tax Audit	30.09.2020	31.10.2020	31.12.2020	15.01.2021
3.	Return for Tax Audit cases	31.10.2020	30.11.2020	31.01.2021	15.02.2021

5. Thus, it is apparent that the Government has not only considered representations of various stakeholders but also has been proactive in providing relaxation to the taxpayers by extending due dates regularly. The table below gives the statistical data comparing the return filing statistics of A.Y. 2019-20 and A.Y. 2020-21

Date – This year	AY 20-21 ITRs filed	Daily figures	Date -Last year	AY 19-20 ITRs filed	Daily Figures
5- Jan-21	5,08,48,022	7,26,177	26-Aug-19	4,14,13,558	13,65,348
6- Jan-21	5,16,71,398	8,23,376	27-Aug-19	4,30,99,600	16,86,042
7- Jan-21	5,27,14,751	10,43,353	28-Aug-19	4,51,44,749	20,45,149
8- Jan-21	5,41,54,435	14,39,684	29-Aug-19	4,77,39,460	25,94,711
9- Jan-21	5 ,64,10,561	22,56,126	30-Aug-19	5,12,55,607	35,16,147
10- Jan-21	5,95,15,322 “	31,04,761	31-Aug-19	5,61,79,905	49,24,298

From the above table, it is apparent that the number of returns filed this year has already exceeded the number of returns filed last year up to 31st August which was the last day of filing of the all the returns other than the company/tax audit returns, by about 6%.

The table below gives the statistical data comparing the filing statistics of tax audit report for A.Y. 2019-20 and A.Y. 2020-21-

Date	Form 3CA	Form 3CB	Date	Form 3CA	Form 3CB
20-Oct-19	2,741	29,760	04-Jan-21	3,079	27,492
21-Oct-19	5,598	51,069	05-Jan-21	3,238	28,875
22-Oct-19	7,626	62,938	06-Jan-21	3,190	30,582
23-Oct-19	9,125	75,031	07-Jan-21	3,323	31,035
24-Oct-19	10,977	87,350	08-Jan-21	3,316	29,924
25-Oct-19	11,841	93,575	09-Jan-21	2,824	26,097
26-Oct-19	10,366	91,397	10-Jan-21	1,416	16,370
27-Oct-19	2,309	30,861	11-Jan-21
28-Oct-19	6,138	59,785	12-Jan-21
29-Oct-19	10,119	1,00,569	13-Jan-21
30-Oct-19	23,125	1,87,444	14-Jan-21
31-Oct-19	42,280	3,15,190	15-Jan-21
Grand Total cumulative	2,88,236	25,37,444	Grand Total cumulative	2,14,804	18,49,461

6. The above table also show that majority of the audit reports under section 44AB of the Act as well as income tax returns are filed within the last few days of the dates only. For A.Y. 2019-20 it is seen that 24% of total audit reports were filed in last 3 days before the due date. Therefore, lesser filing compliances having been made much before the due date cannot be said to be an anomalous situation.

7. A look at the relaxation of similar nature provided by other economies globally makes it clear that the Government of India has been very empathetic to the needs of the taxpayers as compared various other countries. It is apparent from the table no other country has extended the due dates as much as India. Even countries which are comparatively worse hit by COVID-19, like the USA, UK etc., have provided no or lesser extensions in due dates. The table below lists such extensions given by a few countries: –

Country	Financial period	INDIVIDUAL		CORPORATE
		Due date	Extended due date	Due date	Extended due date
USA	2019	15th April, 2020	15th October, 2020	15th April, 2020	15th October, 2020
UK	2019- 2020	31st January 2021	No extension	31st December, 2020	No extension
Australia	2018 -2019	5th May, 2020	5th June, 2020	15th May, 2020	5th June, 2020
South Africa	2019	16th November, 2020	No extension	31st December, 2020	No extension
Netherlands	2019	1St May, 2020	No extension	1st June, 2020	No extension
Ireland	2019	12th November, 2020	10th December, 2020	12th November, 2020	10th December, 2020
Singapore	2019	18th April, 2020	31St May, 2020	15th December, 2020	15th January, 2020
Canada	2019	30th April, 2020	30th September, 2020	May –August 2020.	30th September, 2020
Brazil	2019	1st March, 2020	30th April, 2020	30th April, 2020	30th June, 2020

8. From the above it may be seen that Government has been proactive in analyzing the situation and providing relief to assessee. However, it should also be appreciated that filing of tax returns/audit reports are essential part of the obligations of assessee and cannot be delayed indefinitely. Many functions of the Income-tax Department start only after the filing of the returns by the assessee. Filing of tax returns by assessee also results in collections of taxes either through payment of self-assessment tax by the assessee or by the subsequent collection by the department post processing or assessment of the tax returns. The tax collections assume increased significance in these difficult times and Government of India needs revenue to carry out relief work for poor and other responsibilities. Any delay in filing returns affects collection of taxes and other welfare functions of the state for the vulnerable and weaker sections of society which is funded through the revenue collected. Sufficient time has already been given to taxpayers to file their tax returns and a large number of taxpayers have already filed their returns of Income.

9. From the above discussion, it is apparent that,-

• The due dates for filing of return/tax audit have already been extended on 3 Occasions.
• Internationally, the extension provided by India is more generous as compared to other countries.
• The return filing statistics of the current year indicates that returns filed in this financial year already far exceeds the returns filed which were due on the last c ate of filing of returns.

Any further extension would adversely affect the return filing discipline and shall also cause injustice to those who have taken pains to file the return before the due date. It would also postpone the collection of revenue thereby hampering the efforts of the Government to provide relief to the poor during these COVID times.

10. In this regard, the decisions of the Hon’ble Supreme Court have also been considered. The Hon’ble Supreme Court in the case of Govt. of A.P. v. N. Subbarayudu, (2008) 14 SCC 702 = 2008 (3) TMI 738 - SUPREME COURTat page 703:

“5. In a catena of decisions of this Court it has been held that the cut-off date is fixed by the executive authority keeping in view the economic conditions, financial constraints and many other administrative and other attending circumstances. This Court is also of the view that fixing cut-off dates is within the domain of the executive authority and the court should not normally interfere with the fixation of cut-off date by the executive authority unless such order appears to be on the face of it blatantly discriminatory and arbitrary. (See State of Punjab v. Amar Nath Goyal 1(2005) 6 SCC 754 : 2005 SCC (L&S) 910 = 2005 (8) TMI 717 - SUPREME COURT].

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7.There may be various considerations in the mind of the executive authorities due to which a particular cut-off date has been fixed. These considerations can be financial, administrative or other considerations. The court must exercise judicial restraint and must ordinarily leave it to the executive authorities to fix the cut-off date. The Government must be left with some leeway and free play at the joints in this connection.

8. In fact several decisions of this Court have gone to the extent of saying that the choice of a cut-off date cannot be dubbed as arbitrary even if no particular reason is given for the same in the counter-affidavit filed by the Government (unless it is shown to be totally capricious or whimsical), vide State of Bihar v. Ramjee Prasad [(1990) 3 SCC 368: 1991 SCC (L&S) 51] = 1990 (4) TMI 294 - SUPREME COURT , Union of India v. Sudhir Kumar Jaiswal [(1994) 4 SCC 212: 1994 SCC (L&S) 925 : ‘1994) 27 ATC 561 = 1994 (5) TMI 273 - SUPREME COURT] (vide SCC para 5), Ramrao v. All India Backward Class Bank Employees Welfare Assn. 1(2004) 2 SCC 76 2004 SCC (L&S) 337 = 2004 (1) TMI 709 - SUPREME COURT] (vide SCC para 31), University Grants Commission v. Sadhana Chaudhary [(1996) 10 SCC 536: 1996 SCC (L&S) 1431= 1996 (9) TMI 601 - SUPREME COURT] , etc. It follows, therefore, that even if no reason has been given in the counter-affidavit of the Government or the executive authority as to why a particular cut-off date has been chosen, the court must still not declare that date to be arbitrary and violative of Article 14 unless the said cut-off date leads to some blatantly capricious or outrageous result.”

11. In fact several decisions of the Hon’ble Supreme Court have gone to the extent of saying that the choice of a cut off date cannot be dubbed as arbitrary even if no particular reason is given for the same in the counter affidavit filed by the Government, (unless it is shown to be totally capricious or whimsical). [State of Bihar vs. Ramjee Prasad 1990(3) SCC 368 = = 1990 (4) TMI 294 - SUPREME COURT, Union of Indian & Anr. vs. Sudhir Kumar Jaiswal 1994(4) SCC 212 = 1994 (5) TMI 273 - SUPREME COURT  (vide para 5), Ramrao & Ors. vs. All India Backward Class Bank Employees Welfare Association & Ors. 2004 (2) SCC 76 = 2004 (1) TMI 709 - SUPREME COURT (vide para 31), University Grants Commission vs. Sadhana Chaudhary & Ors. 1996(10) SCC 536 = 1996 (9) TMI 601 - SUPREME COURT, etc.] When it is seen that a line or a point there must be and there is no mathematical or logical way of fixing it precisely, the decision of the legislature or its delegated must be accepted unless it can be said that it is very wide off the reasonable mark. (See Union of India & Anr. v. M/s Parameshwaran match works Ltd., 1975 (2) SCR 573 =1974 (11) TMI 40 - SUPREME COURT, at p. 579; and Dr. (Mrs.) Sushma Sharma etc. etc. v. State of Rajasthan & Ors. 1985 (3) SCR 243 = 1985 (3) TMI 298 - SUPREME COURT, at p. 269)

12. In view of the above reasons, all the representations for further extension of the due date are hereby rejected.

(Shefali Singh)

Under Secretary (TPL-IV)

Due date extensions for income-tax returns and tax-audit filings are declined to protect filing discipline and revenue collection. Order declining further extensions of statutory due dates for filing income-tax returns and tax audit reports, noting prior multiple extensions, statutory linkage of audit due dates to return due dates, comparative international practice, filing statistics demonstrating substantial compliance, the fiscal and administrative necessity of timely filings, and judicial principles of deference to executive fixation of cut-off dates; accordingly, representations for further extension are rejected.