TaxTMI 
TaxTMI 
2021 (1) TMI 338
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....irements, after the beginning of the Assessment year in which the same are made applicable; providing the tax payers and the tax practitioners a clear period of 183 and 214 days to prepare and submit the due reports and forms respectively. (b) direct the respondent No.2 to extend the due date for filing the Income Tax Returns (ITR) and Tax Audit Reports (TAR) for AY 2020-21 to 31.01.2021 (c) any other and further relief deemed just and proper be granted in the interest of justice. (d) to provide for the cost of this petition." 3 The facts giving rise to this writ application may be summarised as under: 3.1 The writ applicant No.1 is a Trust formed and registered in accordance with the provisions of the Bombay Public Trust Act, 1950 (for short, "the Act, 1950") and has, as it members, the various professions and various associations of professionals from the State of Gujarat engaged in the field of practicing taxation. The writ applicant No.2 is a practicing Chartered Accountant and a CoChairman of the representation committee of the writ applicant No.1. Mr. S. N. Soparkar, the learned Senior Counsel assisted by Mr. B. S. Soparkar, the learned counse....
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....nd unreasonable. Mr. Soparkar would submit that as stated by this High Court in Special Civil Application No.15075 of 2015, there is a duty cast upon the respondents to ensure that necessary utility for e-filing of the income-tax returns is made available to various categories of assessees at the beginning of the assessment year so that the assessees can plan their tax matters accordingly. However, the amendment in the forms with additional requirements and utilities for e-filing of returns being available only belatedly curtails the time available for filing the income-tax returns. It is submitted that the amendment in rules and disclosure requirements as late as on 1st October 2020 has effectively given only 30 days (as opposed to extended 214 days) to the Chartered Accounts to furnish the Tax Audit Report. Also, the belated issuance of the ITR forms have also curtailed the effective time period. Any user who file e-return will have to create an XML file based on the schema. The schema is needed by those, software companies and organizations who wish to use this code to help create their own software utility for filing up these forms. Due to frequent changes in schema or utili....
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....m Due date of filing (original) Due date of filing (extended) Time available (extended) Date of updation of utility Effective time available 3CA, 3CB, 3CD 30.09.2020 31.10.2020 214 days 25.08.2020 67 days DELAY IN AMENDING 3CA/3CB/3CD FORM Date on which form / rules are amended Date of providing amended form / utility '1.10.2020 Awaited as on 19.10.2020 4 It is submitted that the decision of the respondent No.2 to introduce the new forms to be made applicable 30 days prior to the due date and to subsequently amend the utility without corresponding extension of the due date to e-file is without any basis and contrary to law. 5 Mr. Soparkar, in support of his aforesaid submissions, has placed strongly reliance on the following two decisions of this High Court: (1) All Gujarat Federation of Tax Consultants vs. Central Board of Direct Taxes [2014] 50 taxmann.com 115 (Gujarat) [Special Civil Application No.12571 and 12656 of 2014 decided on 22nd September 2014] (2) All Gujarat Federation of Tax Consultants vs. Central Board of Direct Taxes [2014] 50 taxmann.com 115 (Gujarat) [Special Civil Application ....
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.... 201 for others. 10 Mr. Patel would submit that based on Notified Forms, the software for preparation of ITRs have been prepared and the date of release of 1st version of ITR utilities in e-filing portal is as per table below. Due to changes in Notified Form or Press releases the ITR preparation software have been modified / are being modified: ITR utility Date of release of ITR utility in e-filing portal ITR-1 '02-June-2020 ITR-2 '26-June-2020 ITR-3 '31-July-2020 ITR-4 '05-June-2020 ITR-5 '25-Aug-2020 ITR-6 '22-Sept-2020 ITR-7 '03-Sept-2020 11 Mr. Patel would further submit that ITRs. 1 and 4 meant for salaried tax payers and business reporting income on presumptive basis, constitute 81% of all ITRs filed, and were available for filing within 1 week of Notification of the forms by CBDT. Til 28th Dec 4.37 Cr. ITRs had been filed for only AY 2020-21 as compared to 4.51 Cr for only AY 2019-20 as on 28th Aug 2019. 12 Mr. Patel would also submit that utility for filing TAR - Form No.3CA 3CD & 3CB 3CD for A.Y. 202021, incorporating amendments as per notification dated 01 Oct 2020 was released in e-filin....
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....rns of income. 15 In the last, Mr. Patel pointed out that the last extension for filing the ITRs and TARs has been given by press release dated 30th December 2020. The Government Notification dated 31st December 2020 has also been issued with respect to the extension for fling the ITRs and TARs. 16 Mr. Patel pointed out that having regard to the same, the Bombay High Court thought fit not to entertain an identical petition and the same came to be rejected vide order dated 31st December 2020. Mr. Patel invited out attention to page : 138 of the paper book on which the order passed by the Bombay High Court has been annexed. 17 In such circumstances referred to above, Mr. Patel prays that there being no merit in this writ application, the same may be rejected. 18 Having heard the learned counsel appearing for the parties and having gone through the materials on record, we intend to keep this writ application pending and pass an interim order in the larger interest of justice. 19 In All Gujarat Federation of Tax Consultants (supra), a Co-ordinate Bench of this High Court had the occasion to consider identical situation. We quote few relevant observations made in the said....
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....etitioner was compelled to approach this Court by way of the present petition. We could not resist ourselves from taking note of details provided in the official website of Income-tax Department which reveals the extension of computerization in the department so far and their vision for the same in this field. With a view to improve the efficiency and effectiveness of Direct Taxes administration and to create a database on its various aspects, a Comprehensive Computerization programme was approved by the Government in October 1993. In accordance with the programme, computerization was taken up on a three tier system. In the apex level, a National Computer Centre [NCC] having large computers to maintain data base and to execute processing work of a global nature was envisaged. At the second level, 36 Regional Computer Centres [RCCs] were to be established across the country equipped with large computers to maintain regional databases and to cater to regional processing needs. All the RCCs were to be connected to the National Computerization Centre through high speed data communication lines. At the third level, computers were to be installed in the rooms of all the Assessin....
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....al error, a serious relook is expected. 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 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." Under subsection (2) of Section 119 without prejudice to the generality of the Board's power set out in subsection (1) a specific power is given to the Board for the purpose of....
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....ly as the reasons in the foundation for CBDT to deny such extension. For the purpose of filing ITR and furnishing TAR difference in due date possibly may lead many assesses not to file the ITR without the aid of the TAR and thereby the angle of gaining the interest under the provision of law for such late filing of the returns would not have been missed by the Revenue. The Revenue can surely safeguard the interest of both the collection of tax, as also of possible loss of interest on the tax collected, the Revenue cannot be permitted to take advantage of its own error or delay, by putting forth magnified figures of loss and thereby also possibly in the process gaining interest for late filing of return in complete disregard to requirement of efficient management. 58. Consequences that would follow on account of the delay in filing the return of income also are weighing factors for the Court to consider such request. Being conscious of the fact that the writ of mandamus, which is highly prerogative writ is for the purpose of compelling the authorities of any official duties, officially charged by the law either refuses or fails to perform the same, the writ of mandamus is r....
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....e 52223). 32. De Smith in Judicial Review, Sixth Edition has also acknowledged the contribution of Lord Mansfield which led to the development of law on Writ of Mandamus. The speech of Lord Mansfield in R v. Blooer, (1760) 2 Burr, runs as under : "a prerogative writ flowing from the King himself, sitting in his court, superintending the police and preserving the peace of this country". (See De Smith's Judicial Review 6th Edition, Sweet and Maxwell page 795 para 15036. 33. Almost a century ago, Darling J quoted the observations in Rex v. The Justices of Denbighshire, (1803) 4 East, 142, in The King v. The Revising Barrister etc. {(1912) 3 King's Bench 518} which explains the wide sweep of Mandamus. The relevant observations are : "...Instead of being astute to discover reasons for not applying this great constitutional remedy for error and misgovernment, we think it our duty to be vigilant to apply it in every case to which, by any reasonable construction, it can be made applicable...." 34. At KB page 531 of the report, Channell, J said about Mandamus : "It is most useful jurisdiction which enables this Court to set fight....
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....lity of the exercise of the prerogative were decided at a time when the Courts took a generally rather circumscribed view of their ability to review Ministerial statutory discretion. The decision of the House of Lords in Padfield's case (1968 AC 997) marks the emergence of the interventionist judicial attitude that has characterized many recent judgments." 38. In the Constitution Bench judgment of this Court in Life Insurance Corporation of India v. Escorts Limited and others, [(1986) 1 SCC 264] : (AIR 1986 SC 1370), this Court expressed the same opinion that in Constitution and Administrative Law, law in India forged ahead of the law in England (para 101, page 344). 39. This Court has also taken a very broad view of the writ of Mandamus in several decisions. In the case of The Comptroller and Auditor General of India, Gian Prakash, New Delhi and another v. K.S. Jagannathan and another ( AIR 1987 SC 537), a three-Judge Bench of this Court referred to Halsbury's Laws of England, Fourth Edition, Volume I paragraph 89 to illustrate the range of this remedy and quoted with approval the following passage from Halsbury about the efficacy of Mandamus : "....
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....urisdiction to meet the requirements of circumstances has become inevitable. 61. Here, we notice that subsequent to the representation made on 21st August, 2014, the CBDT could have responded to such representation by either acceding or refusing to the request of extending the period of filing of ITR and making it extendable upto 30th November, 2014. Ordinarily, in such circumstances, the Court would direct the authority to consider the representation and pass a specific order. In wake of the constrains of time, as the due date of the filing of the return is expiring on 30th September, 2014 and when the respondent Board has chose not to respond to the same, but, later on by offering the comments before this Court in writing in no uncertain terms, it has termed such a request impermissible and has chosen to refuse the same on the ground that all the grievance made by the petitioners are not sustainable. Therefore, considering the larger cause of public good and keeping in mind the requirement of promotion of justice, we chose to exercise the writ of mandamus directing the CBDT to extend the date of filing of return of income to 30th November, 2014, which is due date for fil....
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....ust, 2015. Therefore, prior to 7th 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 30th September, in view of the fact that the utility for filing the income tax returns has been furnished only on 7th August, 2015, such period stands substantially curtailed. Having regard to the difficulties faced by the Chartered Accountants and other professionals as well as the assessees, the petitioners made representations to the respondent Board for exercising powers under section 119 of the Act and extending the due date for filing the income tax returns prescribed under Explanation 2 to section 139 of the Act. However, by the announcement dated 9th September, 2015, such request has been turned down and it has been stated that the last date for filing of returns being 30th September, 2015 will not be extended. As noticed hereinabove, in case of other categories of assessees who are required ....
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....g 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 of the Income Tax Act which are binding on the authorities in the administration of the Act. Under Section 119(2)(a), however, the circulars as contemplated therein cannot be adverse to the assessee. Thus, the authority which wields the power for its own advantage under the Act is given the right to forego the advantage when required to wield it in a manner it considers just by relaxing the rigour of the law or in other permissible manner as laid down in Section 119. The power is given for the purpose of just, proper and efficient management of the work of assessment and in public interest. It is a beneficial power given to the Board for proper administration of fiscal law so that undue hardship may not be caused to the assessee and the fiscal ....
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....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 technology more and more. With the possible defects having been found in utility software in use in the previous year, the required changes in the clarification or the new format of such utility, if brought to the fore, the same would be desirable. At the same time, the complete black out for nearly a months time would not allow accessibility to such utility software to the assessees, which has put them to a great jeopardy. 53. The CBDT derives its powers under the statute which enjoins upon the Board to issue from time to time such orders, instructions and directions to other income-tax authorities if found expedient and necessary for proper administration of the Act. Without prejudice to the generality of powers....
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....orities 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 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." Under subsection (2) of Section 119 without prejudice to the generality of the Board's power set out in subsection (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 assesses, 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 ....
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....nevitable. 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 these provisions if choose to pay the amount of tax on or before the 30th September, 2014, no interest in any case would be levied despite their filing of return after the 30th September, 2014. 64. We are not inclined to stay new utility for one year as sufficient measures are already taken by the Board to redress this grievance. However, it needs to be observed at this juncture that any introduction or new utility/software with additional requirement in the middle of the year ordinarily is not desirable. Any change unless inevitable can be planned well in advance, keeping in focus that such comprehensive process re-engineering may ....
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.... 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 of the court year after year, more so, when on account of the delay on the part of the respondents, it is the assessees who would have to face the consequences of not filing the returns in time. The contention that no prejudice is caused to the petitioners/assessees, therefore, does not merit acceptance. 18 Unfortunately, however, despite the aforesaid position, the Board has declined to exercise the discretion vested in it under section 119 of the Act to come to the rescue of the assessees and grant them some relief, leaving the court with no option but to direct the Board to extend the due dat....
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....ies 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 may be noted that despite the fact that ordinarily the ITR Forms which should be prescribed and made available before the 1st of April of the assessment year, have in fact, been made available only on 7th August, 2015 and the assessees are given only seven weeks to file their tax returns. Therefore, laxity, if any, evidently is on the part of the authority which is responsible for the delay in making the utility for E-Filing the return being made available to the assessees. When the default lies at the end of the respondents, some grace could have been shown by the Board instead of taking a sta....
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....ason 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 expressed the view that the decision contained in the announcement dated 9th September, 2015 being a policy decision, the court should not interfere. The court, therefore, has not considered the non-exercise of discretionary powers under section 119 of the Act on the part of the Board despite the fact that the circumstances so warrant exercise of discretion in favour of the assessee. 23 The Punjab and Haryana High Court in the case of Vishal Garg v. Union of India (supra) has, having regard to the totality of facts and circumstances of the case, considered it appropriate to extend the due ....