TaxTMI 
TaxTMI 
2015 (10) TMI 25
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....nt hence forth, make any alternations in Forms and Utilities or changes in tax compliance requirements, applicable from the A.Y. subsequent to the A.Y. in which such alterations are introduced. [b] that this Hon'ble Court may be pleased to issue a writ of certiorari, or any other appropriate writ, order or direction holding the impugned announcement dated 9/9/2015 as being illegal, inasmuch as, it promotes the filing of ITR without the mandatorily required TAR. [c] that this Hon'ble Court may be pleased to issue a writ of mandamus, or any other appropriate writ, order or direction, directing that the respondent to extend the due date for filing the ITR and TAR to 30/11/2015." 4. The first petitioner is a Trust registered under the provisions of the Bombay Public Trusts Act, 1950 and has over 1000 members who are various professionals, being Advocates, Chartered Accountants and Tax Practitioners engaged in the field of taxation. The second petitioner is the President of the first petitioner Federation and is also assessee who is directly interested in the subject matter of the petition. 5. The controversy involved in the present case arises in the following backdrop. By ....
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.... impossible for assessees to file their return of incomes till 7^th August, 2015 when the relevant forms were eenabled. In the aforesaid premises, several stake holders have made several representations to the CBDT and the Central Government to extend the due date for filing the income tax returns from 30.09.2015 to 30.11.2015. However, the representations yielded no results, and the respondents did not grant extension of due date for filing the income tax returns. On the contrary by an announcement dated 9^th September, 2015 the Government of India Ministry of Finance, it was stated that a decision had been taken that the last date of filing of returns due by 30^th September, 2015 will not be extended. It is in these circumstances that the petitioners have approached this court seeking the reliefs noted hereinabove. 7. Mr. S. N. Soparkar, Senior Advocate, learned counsel with Mr. Manish Kaji, learned advocate for the petitioners submitted that with effect from assessment year 2013-14, it is mandatory for the assessees to electronically file the income tax returns online. It was submitted that the utility for filing the income tax returns in respect of the assessees who are subj....
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....ct, has the administrative powers to excuse the assessees from the rigours created on account of non-notification of the utilities, fails to do so, the petitioners are justified invoking the jurisdiction of this court under Article 226 of the Constitution of India. 7.2 The attention of the court was invited to the announcement dated 09.09.2015 issued by the Ministry of Finance (Annexure "A" to the petition) wherein, it has been stated that "Income Tax Returns Forms 3, 4, 5, 6 and 7 which are used by the companies, firms, individuals engaged in proprietary business/professional etc., whose accounts are to be audited, were notified for assessment year 2015-16 on 29.07.2015. The forms were e-enabled and were available on the e-filing website of the Department from 7^th August, 2015 giving enough time for compliance. The changes made to these forms are not extensive as compared to the earlier years. xxxx After consideration of all facts, it has been decided that the last date for filing of returns due by 30^th September, 2015 will not be extended. The taxpayers are advised to file their returns in time to avoid last minute rush." It was submitted that prior to 7^th August, 2015, the....
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....interest litigation. It was submitted that no cause of action of infringement of any Article of the Constitution has been brought to the notice of the court. It was submitted that the first petitioner which is a federation of professionals cannot, in any manner, be said to be prejudiced by the non-extension of the date for filing the income tax returns. It was contended that there is nothing in the petition to show that the fundamental rights of a citizen has been infringed. It was submitted that while the utility was made available on 7^th August, 2015, the only changes are with regard to giving details of foreign assets and bank accounts and that 98% of the data could have been compiled in advance and kept ready. It was submitted that the major part of the computation has to be done before filing the tax returns. It was submitted that once the finance bill is presented and debated, it is only after the President gives his assent that the Act is enacted. In the present case, the President gave his assent on 14.05.2015 and the utility has been made available on 07.08.2015 and hence, it cannot be said that there is an inordinate delay in providing the same. It was submitted that onc....
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.... Maneklal Chunilal and Sons Ltd. v. Commissioner of Income Tax, (1953) 24 ITR 375, wherein it was observed that "in conformity with the uniform policy which we have laid down in income tax matters, whatever our own view may be, we must accept the view taken by another High Court on interpretation of the section of a statute which is an all-India statute". The court also referred to the decision of the Bombay High Court in CIT v. Chimanlal J. Dalal and Co., (1965) 57 ITR 285, wherein it was observed that, "Barring some exceptions, it has been the general policy laid down by this court in income tax matters that whatever our own view may be, we should follow the view taken by another High Court on the interpretation of a section". It was submitted that therefore, once the Delhi High Court has taken a view, it is not permissible for this court to take a different view. 8.2 It was urged that the Board being an expert body, is alive to the difficulties of the tax payers and has stood up when such difficulties had arisen. Moreover, in the absence of any data as regards the actual hardship, grant of the reliefs prayed for would be detrimental to the policy decision of the Board. 8.3....
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....observed that extension of time for submission of income tax returns is the domain of the Indian Government and the Central Board of Direct Taxes, and had directed the Central Board of Direct Taxes to consider the representations dated 15^th September, 2015 peremptorily by 29^th September, 2015. Reference was also made to the decision of the Rajasthan High Court in The Rajasthan Tax Consultants Association v. Union of India rendered on 28^th September, 2015 in D. B. Civil Writ (PIL) Petition No.11034 of 2015 wherein, the court accepted the reasons given by the Government in the communication dated 9^th September, 2015 and observed that it was of the view that the court should not interfere in a policy decision of the Government and dismissed the petition after noting that the Delhi High Court has also dismissed a similar petition. 8.5 Referring to the pleadings in the petition, it was submitted that no ground has been made out with regard to the hardships. It was reiterated that in all, a Chartered Accountant has seven weeks to deal with 60 tax audits and a corresponding number of income tax returns, which cannot be said to be not sufficient for the purpose of uploading the inco....
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....and another, (2009) 3 SCC 35, wherein the court had held that the State is entitled to fix a cut-off date. Such a decision can be struck down only when it is arbitrary. Its invalidation may also depend upon the question as to whether it has a rational nexus with the object sought to be achieved. The Court observed that by choosing a cut-off date, no illegality was committed. Ex-facie, it cannot be said to be arbitrary. Reliance was also placed upon the decision of the Supreme Court in the case of State of U. P. and another v. Johri Mal, (2004) 4 SCC 714, with particular reference to paragraphs 28 to 30 thereof, for the proposition that the scope and extent of power of the judicial review of the High Court contained in Article 226 of the Constitution of India would vary from case to case, the nature of the order, the relevant statute as also the other relevant factors including the nature of power exercised by the public authorities, namely, whether power is statutory, quasi-judicial or administrative. The court observed that the limited scope of judicial review, succinctly put, is : (i) Courts, while exercising the power of judicial review, do not sit in appeal over the decision....
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....ails were available. As regards the contention that the changes in the online forms are minor in nature, it was submitted that unless the assessees know about the nature of the changes made, it is immaterial as to whether the changes are minor or major. It was submitted that such a contention could be available to the respondents provided the old form was continued. However, till the new form was issued, there was a total blackout and it was not permissible for the assessees to file their returns till the utility was made available on 7^th August, 2015. As regards the contention that the statute nowhere provides for 180 days for filing of returns, it was pointed out that the income tax return is required to be filed after 31^st March till 30^th September in case of the assessees who are subject to audit and hence, the assesses have 180 days available for filing the returns. 9.1 As regards the contention that the President has given the assent only in May, 2015, it was submitted that the Finance Act, 2015 deals with returns to be filed in the subsequent year and not in the current year and hence, the Act which was given assent would be applicable to the subsequent assessment year....
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....the provisions of section 139 of the Act to point out that insofar as 60 audits are concerned, the Chartered Accountant is not required to only deal with the assessees who are subject to tax audit under section 44AB of the Act. While the number of assessees who are subject to tax audit under section 44AB of the Act may be limited to 60, there are various other assessees in respect of whom the income tax returns have to be filed. Reference was made to Explanation 2 to section 139 of the Act, which defines "due date", to point out that the same provides that the due date for filing income tax returns in respect of different categories of assessees. Referring to sub-rule (1) of rule 12 of the Income Tax Rules, 1962 (hereinafter referred to as "the rules"), it was pointed out that various categories of assessees and nature of forms are prescribed therein. It was submitted that the present petition does not relate to the assessees covered under clauses (a), (b) and (ca) thereof. It was pointed that in case of assessees covered by clause (c) in relation to whom the Form ITR-3 is required to be notified, are not subject to tax audit. Similar is the case with the assessees covered by claus....
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....ve at or there is another view in the field or there is a subsequent amendment of the statute or reversal or implied overruling of the decision by a High Court or some such or similar infirmity is manifestly perceivable in the decision, a different view can be taken by the High Court. 10.2 Dealing with the above referred decisions of the Karnataka High Court and the Rajasthan High Court, on which reliance has been placed on behalf of the respondents, the learned counsel submitted that the said courts have refused to interfere on the ground that the respondents had taken a policy decision. It was submitted that in this regard, this court in Special Civil Application No.12656 of 2014 and allied matter, in the preceding year, has already repelled such argument. It was submitted that as a broad proposition of law, normally, the court would not interfere with the policy decision; however, there are no fetters on the powers of the High Court of judicial review in case when facts warrant interference. 10.3 As regards the submission that the Income Tax Act being all-India Act, taking a different view would create an anomalous position, the learned counsel once again placed reliance u....
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....o the court, is no reason to grant them relief. 11 The controversy involved in the present case lies in a very narrow compass. The petitioners and other assessees covered under the categories to which the petition relates, are ordinarily required to file their returns of income any time from 1^st April till 30^th September of the relevant assessment year. By virtue of rule 12 of the rules, all the assessees have to file the income tax returns electronically, that is, online. For this purpose, the corresponding utility relating to each category of assessees in the nature of Forms No.ITR-3, ITR-4, ITR-5, ITR-6 and ITR-7 are required to be provided by the respondents. It is an admitted position that in the year under consideration, the relevant utility has been provided only with effect from 7^th August, 2015. Therefore, prior to 7^th August, 2015, it was not possible for any of the assessees who were required to file income tax returns in the above referred forms, to file their returns of income. Therefore, while in the ordinary course, the assessees falling in the above categories have a period of 180 days to compile relevant details and to file the income tax returns by 30^th Se....
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....tructions or directions shall be issued- (a) so as to require any Income Tax Authority to make a particular assessment or to dispose of a particular case in a particular manner; or (b) so as to interfere with the discretion of the Appellate Assistant Commissioner in the exercise of his appellate functions." (emphasis supplied) Under sub-section (2) of Section 119, without prejudice to the generality of the Board's power set out in sub-section (1), a specific power is given to the Board for the purpose of proper and efficient management of the work of assessment and collection of revenue to issue from time to time general or special orders in respect of any class of incomes or class of cases setting forth directions or instructions, not being prejudicial to assessees, as the guidelines, principles or procedures to be followed in the work relating to assessment. Such instructions may be by way of relaxation of any of the provisions of the sections specified there or otherwise. The Board thus has power, inter alia, to tone down the rigour of the law and ensure a fair enforcement of its provisions, by issuing circulars in exercise of its statutory powers under Section 119 o....
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....ime available for filing the income tax returns to a great extent. According to the petitioners, such curtailment of time causes immense hardship and prejudice to the petitioners and other assessees belonging to the above categories, whereas the respondent Board, on the other hand, has taken an adamant stand not to extend the time for e-filing of the returns despite the fact that the entire situation has arisen on account of default on the part of the Department and not the assessees. 14. It may be recalled that in relation to assessment year 2014-15, the respondent Board had extended the time for filing the tax audit reports, but had not extended the time for filing the returns and the petitioners were constrained to approach this court for extension of the due date for filing return of income. In that case, this court has, inter alia, observed thus : "50. We are also actuated by the fact that the entire situation is arising not on account of any contribution on the part of either the professionals or the assesses leading to such a situation. In the present case, with the advancement of the technology, it is always commendable that the department takes recourse to the techno....
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....x return harmonious with the filing of the TAR and without jeopardizing the issue of collection of tax, it was not impossible to exercise such powers of relaxation of provision prescribing extension of the due date. 55. While examining the CBDT's powers exercisable under section 119 of the Act, of course, in some other context, the Apex Court has held and observed thus: "9. What is the status of these circulars? Section 119(1) of the Income-tax Act, 1961 provides that, "The Central Board of Direct Taxes may, from time to time, issue such orders, instructions and directions to other Income-tax authorities as it may deem fit for the proper administration of this Act and such authorities and all other persons employed in the execution of this Act shall observe and follow such orders, instructions and directions of the Board. Provided that no such orders, instructions or directions shall be issued (a) so as to require any Incometax authority to make a particular assessment or to dispose of a particular case in a particular manner: or (b) so as to interfere with the discretion of the Appellate Assistant Commissioner in the exercise of his appellate functions." Under sub-section (2....
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....orities of any official duties, officially charged by the law either refuses or fails to perform the same, the writ of mandamus is required to be used for the public purpose, particularly, when the party has not other remedy available. It is essentially designed to promote justice. 60. Keeping in mind the scope of writ jurisdiction as detailed in the decision hereinabove, these petitions deserve consideration. In absence of any remedy available, much less effective to the stakeholders against the non-use of beneficial powers by the Board for the larger cause of justice, exercise of writ jurisdiction to meet the requirements of circumstances has become inevitable. 62. Such extension needs to be granted with the qualification that the same may not result into noncharging of interest under section 234A. Simply put, while extending the period of filing of the tax return and granting benefit of such extension for all other provisions, interest charged under section 234A for late filing of return would be still permitted to be levied, if the Board so choses for the period commencing from 1.10.2014 to the actual date of filing of the return of income. Those tax payers covered under ....
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....returns before such date. 17. Another notable aspect of the matter is that as contended on behalf of the petitioners, non-filing of returns before the due date would result into the assessees being deprived of their right to file the revised return or claiming loss, whereas insofar as the revenue is concerned, no hardship or prejudice is likely to be caused, inasmuch as the interest of the revenue can be taken care of by providing that the due date shall stand extended for all purposes, except for the purposes of Explanation 1 to section 234A of the Act. Under the circumstances, when no prejudice is caused to the revenue and the assessees are put to great hardship on account of the short period within which the income tax returns are to be filed, it was expected of the Board to exercise the discretionary powers vested in it under section 119 of the Act to ameliorate the difficulties faced by the assessees on account of no default on their part, at least to a certain extent, by extending the due date for filing the income tax returns for a reasonable time. In the opinion of this court, the Board should not create a situation whereby the assessees are required to knock the doors o....
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.... not being a company to which clause (g) applies and clause (g) prescribes Form No.ITR-7 in the case of a person including a company whether or not registered under section 25 of the Companies Act, 1956 which is required file return under the relevant sub-sections of section 139 of the Act mentioned thereunder. Not all the aforesaid classes of assessees are required to be audited under section 44AB of the Act. Therefore, it is not just assessees who are subject to tax audit under section 44AB of the Act who are affected by the non-extension of due date but assessees belonging to all the above categories who may not be subject to tax audit under section 44AB. The number of tax audits conducted by a Chartered Accountant may be limited to 60, but the total number of assessees that he deals with is not limited to 60, as a large number of assessees may belong to the categories which are not subject to tax audit under section 44AB of the Act. 20. The Board while not extending the due date for filing return was also of the view that due date should not be extended just for the benefit of those who have remained lax till now for no valid reason in discharging their legal obligations. It....
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....overnment, after the Finance Act of the financial year, to finalise the forms and if no change is intended therein, to notify the same immediately. The court found no justification for delay beyond the assessment year in prescribing the said forms. Accordingly, while not granting relief to the petitioner for the current assessment year, the court directed the respondents to, with effect from the next assessment year, at least ensure that the forms etc. which are prescribed for the Audit Report and for filing the ITR are available as on 1^st April of the assessment year unless there is a valid reason therefor and which should be recorded in writing by the respondents themselves, without waiting for any representations to be made. The court further observed that the respondents, while doing so, to also take a decision whether owing thereto any extension of the due date is required to be prescribed and accordingly notify the public. 22. As regards the decision of the Karnataka High Court, the court has merely relegated the petitioners therein to the CBDT for the consideration of their representation and does not lay down any proposition of law. The Rajasthan High Court has expresse....