TaxTMI 
TaxTMI 
2025 (11) TMI 100
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....run K. Patel (3802). Appearance: (SCA 13589 of 2025) For the Petitioner(s) No. 1,6 7: Mr Avinash Poddar. For the Respondent(s) No. 1: Mr Pradip D Bhate (1523). For the Respondent (s) No. 1: Advance Copy Served to Mr Pradip Bhate. For the Respondent(s) No. 2, 3: Mr. Varun K. Patel (3802). ORAL COMMON ORDER (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1. Heard learned Senior Advocate Mr. Tushar Hemani with learned advocate Mr. Dhinal Shah, learned advocate Mr. Parth Contractor, learned advocate Dhruven Shah, learned Mr. Avinash Poddar for the respective petitioners and learned Senior Standing Counsel Mr. Varun K. Patel for the respondent nos. 1, 2 and 3 and learned advocate Mr. B.S. Soparkar for the supporting respondent no. 4 in SCA no. 13533 of 2025. 2. This Court passed the following order on 26.09.2025 :- "Heard learned advocate Mr. Dhinal A. Shah, learned advocate Mr. Parth Contractor with learned advocate Mr. Dhruven Shah and learned advocate Mr. Avinash Poddar for the petitioners in the respective petitions and learned Senior Standing Counsel Mr. Varun K. Patel for the respondents. Order in CIVIL APPLICATION (FOR AMENDMENT) NO. 1....
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....ted 22.09.024 rendered in Special Civil Application No. 12656 of 2014 and allied matter) wherein it is held as under: "78. At this juncture it may be pertinent to note that section 44AB of the Act provides for getting the accounts of an assessee of the previous year audited by an accountant before the specified date and to furnish report of such audit by that date in the prescribed form, setting forth such particulars as may be prescribed. As to what is the "specified date" is provided under clause (ii) of the Explanation to section 44AB which postulates that "specified date" in relation to the accounts of an assessee of the previous year relevant to an assessment year, means the due date for furnishing the return of income under sub-section (1) of section 139. It would, therefore, be necessary to examine as to what is the due date for furnishing return of income under sub-section (1) of section 139 of the Act. For this purpose, reference may be made to Explanation 2 to section 139 of the Act, which reads thus: Explanation 2.-In this sub-section, "due date" means,- (a) where the assessee other than an assessee referred to in clause (aa) is- (i) a....
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....nd furnishing the report of audit under section 44AB, whereas the language employed by the legislature in relation to section 44AB is the "specified date". Since the "due date" for filing return under section 139 of the Act is the "specified date" as envisaged under section 44AB of the Act, the Board appears to have consciously used the expression "due date" and not "specified date" in the said notification. However, it cannot be gainsaid that there cannot be two due dates, one for the purposes of filing of return under section 139 of the Act and the other for the purpose of determining the specified date under section 44AB of the Act. 81. Nonetheless, for the purpose of extending the due date for obtaining and furnishing the report of audit under section 44AB of the Act, the Board, in exercise of powers under clause (a) of sub-section (2) of section 119 of the Act, can relax the provisions of section 139 of the Act and can extend the due date for filing the return of income, in which case, the specified date under section 44AB of the Act would stand automatically extended. Therefore, the Board, if at all it was of the view that it was necessary to extend the due date for ....
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....2014 extends the "due date" for furnishing the report of audit. Insofar as the provisions of section 44AB of the Act are concerned, the expression "due date" is found only in clause (ii) of the Explanation thereto which is the date of furnishing the return of income under sub-section (1) of section 139. Therefore, the notification itself could be construed as having extended the due date for filing return of income under section 139 of the Act. However, the stand taken by the Board does not admit any such construction. 84. In the aforesaid circumstances, having regard to the fact that the Board has no power to relax the provisions of section 44AB of the Act, it would be in the fitness of things if with a view to bring the notification dated 20th August, 2014 within the ambit of its jurisdiction, the Board relaxes the provisions of section 139(1) of the Act by extending the due date for filing the return of income till 30th November, 2014 as a direct consequence whereof, the "specified date" for obtaining and furnishing the report of audit under section 44AB of the Act would get automatically extended." In view of above decision of this Court whereby due date for f....
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....this regard, it is relevant to submit that the earlier order dated 22.09.2014 of this Hon'ble Court was challenged in SLP No. 8074 8075/2015 filed before the Hon'ble Supreme Court raising the following questions of law: (i) Whether High Court was correct in law in holding that CBDT has no power u/s 119 of IT Act to extend the due date for furnishing of Tax audit report? (ii) Whether High Court was correct in law in holding that under section 119 of IT Act, the due date of filing of tax audit report cannot be extended alone without extending the due date for filing of return of income? (ii) Whether High Court was correct in law in making adverse observation regarding functioning of CBDT without appreciating that individual replies are not sent with regard to representations received and the decision of CBDT is put in public domain as and when the Board deems fit? It is submitted that the Hon'ble Supreme Court, vide its order dated 11.05.2015, found no reason to entertain these SLPs and dismissed the same by keeping the question of law as open. Therefore, it cannot be said that the question of law regarding power of the Board to extend the specifie....
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.... the due date for an assessee referred to in clause (a) of Explanation 2 of sub-section (1) of Section 139 of the Act; (B) removing the distinction between a working and a non-working partner of a firm with respect to the due date as mentioned in sub-clause (iii) of clause (a) of Explanation 2 of sub-section (1) of Section 139 of the Act. These amendments will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-21 and subsequent assessment years." Annexed hereto and marked as Annexure-R/5 is the copy of the relevant part of the Explanatory memorandum of Finance Act, 2020." 4. The order dated 26.09.2025 reproduced herein above explains the issue which is required to be addressed as to whether the due date under Section 139 (1) of the Income Tax Act,1961 (For Short "the Act") is required to be extended in view of the Circular No. 14/2024 dated 25.09.2025 as per Explanation (ii) to Section 44AB of the Act or not by the respondent no. 2. 5. The facts emerging from the record are in narrow compass to the effect that the respondent no. 2 - Central Board of Direct Taxes (For short "CBDT") by Circular No. 14....
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....rnish a return, of his income during any previous year ending before the 1st day of April, 2005, on or before the due date in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed :" 5.2. Explanation 2 to Section 139(1) of the Act reads as under:- Explanation 2.-In this sub-section, "due date" means,- (a) where the assessee [other than an assessee referred to in clause (aa) is- (i) a company; or (ii) a person (other than a company) whose accounts are required to be audited under this Act or under any other law for the time being in force; or (iii) a [***] partner of a firm whose accounts are required to be audited under this Act or under any other law for the time being in force [or the spouse of such partner if the provisions of section 5A applies to such spouse], the [31st day of October] of the assessment year; (aa) in the case of an assessee [including the partners of the firm or the spouse of such partner (if the provisons of section 5A applies to such spounse) being such assessee] [who is required to furnish a report referred to in section 92E, t....
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.... (b) carrying on profession shall, if his gross receipts in profession exceed fifty lakh rupees in any previous year; or (c) carrying on the business shall, if the profits and gains from the business are deemed to be the profits and gains of such person under section 44AE or section 44BB or section 44BBB, as the case may be, and he has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, in any previous year; or (d) carrying on the profession shall, if the profits and gains from the profession are deemed to be the profits and gains of such person under section 44ADA and he has claimed such income to be lower than the profits and gains so deemed to be the profits and gains of his profession and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year; or (e) carrying on the business shall, if the provisions of sub-section (4) of section 44AD are applicable in his case and his income exceeds the maximum amount which is not chargeable to income-tax in any previous year, get his accounts of such previous year audited by an accountant befor....
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....ted by the Finance Act, 1998 with effect from 01.04.1989 and later on amended by the Finance Act, 1994 with effect from 01.04.1994. Prior to its substitution, "specified date" was defined as under :- "(ii) "specified date", in relation to the accounts of the previous year relevant to an assessment year means - (a) where the assessee is a company, the 30th day of November of the assessment year (b) in any other case, the 31st day of October of the assessment year." 8. As stated in the affidavit-in-reply filed on behalf of the respondent no. 2 - CBDT which is reproduced herein-above, the Explanatory Memorandum for Finance Act, 2020 inserted the words "date one month prior to" and accordingly, the specified date which is applicable to the Assessment Year 2025-26 shall have to be the date one month prior to the due date for furnishing the return of income under sub-section(1) of Section 139 of the Act. 9. The intention of the legislature to have a period of one month prior to the due date of filing of the return of income to obtain audit report is to enable prefiling of returns in case of persons having income from the business or profession. Accordingl....
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....hing the return of income under sub-section (1) of Section 139 of the Act would be 30.09.2025. 12. The respondent no. 2 - CBDT by Circular No. 14/2025 has extended the "specified date" in exercise of the power conferred upon it under Section 119 of the Act has from 30th September to 31st October, 2025 for the assesses which are required to file the return of income as per Explanation (a) to Section 139 (1) of the Act which provides filing of return by 31.10.2025. 13. Considering the above facts and the Explanation (ii) to Section 44AB of the Act the "specified date" has to be one month prior to the "due date" of furnishing return of income meaning thereby that there has to be is gap/ difference of one month between the "specified date" and "due date" for filing return of income, otherwise, the Explanation (ii) to Section 44AB of the Act would be rendered negatory and otiose. The statutory provisions which have been amended by Finance Act,2020 cannot be rendered nugatory or otiose. 14. The Hon'ble Apex Court in case of Bansal Wire Industries Ltd. & Anr. v. State of Uttar Pradesh & Ors. reported in (2011) 6 SCC 545 has observed as under :- "29. It is a settled princ....
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....h reads as under :- Amendments made in the following sections by Finance Act, 2020 Sr.No. Section Particulars Relevant Extract 1 10(23C) Explanation 5, 8th Proviso (b) Reference to Specified Date referred to in Section 44AB get its accounts audited in respect of that year by an accountant as defined in the Explanation below sub-section (2) of section 288 before the specified date referred to in section 44AB and furnish by that date, the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed 2 10A(5) Reference to Specified Date referred to in Section 44AB The deduction under this section shall not be admissible for any assessment year beginning on or after the 1st day of April, 2001, unless the assessee furnishes in the prescribed form, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288 before the specified date referred to in section 44AB, certifying that the deduction has been correctly claimed in accordance with the provisions of this section. 3 12A(1)(b)(ii) Reference to Specified Date referred to in....
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....red to in Section 44AB Where the assessee is a person other than a company or a co-operative society, no deduction shall be admissible under sub-section (1) unless the accounts of the assessee for the year or years in which the expenditure specified in sub-section (2) is incurred have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288, before the specified date referred to in section 44AB and the assessee furnishes for the first year in which the deduction under this section is claimed, the report of such audit by that date in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed. 8 44AB, Explanation (ii) Reference to Specified dated referred to in Section 44AB specified date, in relation to the accounts of the assessee of the previous year relevant to an assessment year, means date one month prior to the due date for furnishing the return of income under sub-section (1) of section 139. 9 44AD (2) Reference to Specified dated referred to in Section 44AB Every non-resident (not being a company) or a foreign company shall keep and maintain books o....
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....or to the date of furnishing return of income u/s. 139(1) for relevant AY specified date means the date one month prior to the due date for furnishing the return of income under sub-section (1) of section 139 for the relevant assessment year; 15 115JB(4) Reference to Every company to which this section applies, shall Specified dated referred to in Section 44AB furnish a report in the prescribed form from an accountant as defined in the Explanation below sub-section (2) of section 288, certifying that the book profit has been computed in accordance with the provisions of this section before the specified date referred to in section 44AB or along with the return of income furnished in response to a notice under clause (i) of sub-section (1) of section 142. 16 115JC(3) Reference to Specified dated referred to in Section 44AB very person to whom this section applies shall obtain a report, before the specified date referred to in section 44AB, in such form as may be prescribed, from an accountant referred to in the Explanation below sub-section (2) of section 288, certifying that the adjusted total income and the alternate minimum tax have been computed in acc....
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....turn as per Section 139(1) of the Act, the concern shown by the respondent no. 2 CBDT in the affidavit-in-reply for closely monitoring the functioning of E-filing portal is without any basis as statutorily there has to be a prior period of one month between the date of uploading the audit report being the "specified date" and "due date" of filing of the return. Respondent no.2 -CBDT therefore would not be justified to wait till end of OCTOBER,2025 for issuing circular to extend the "due date". 22. We, therefore, again reiterate the decision of this Court in case of All Gujarat Federation of Tax Consultants v. Central Board of Direct Taxes (supra). As the respondent no. 2 CBDT has not issued any Circular while exercising its power under Section 119 of the Act to extend the "due date" for filing the return of income for the assessees covered by Explanation (a) to Section 139 (1) of the Act to 30th November,2025, when the "specified date" is extended from 30.09.2025 to 31.10.2025, a consequential Circular to extend the "due date" to 30.11.2025 as per the provisions of Explanation (ii) to Section 44AB read with Section Explanation (a) to Section 139 (1) of the Act is required to be ....