Un-necessary disputes and litigation by revenue on aspect of filing of prescribed forms:–now Supreme Court decided issue in favour of assessee – let us hope revenue will follow judgment and will not distinguish facts based on prescribed form - its number, name or contents and purposes

[CA DEV KUMAR KOTHARI]

Links and references for judgments:

COMMISSIONER OF INCOME-TAX Versus G.M. KNITTING INDUSTRIES (P.) LTD. & AKS ALLOYS (P.) LTD. 2015 (11) TMI 397 - SUPREME COURT Dated - 24 July 2015

Commissioner Of Income-Tax Versus Shivanand Electronics  1993 (9) TMI 30 - BOMBAY HIGH COURT  Dated - 03 September 1993

Commissioner Of Income-Tax Versus Hardeodas Agarwalla Trust  1991 (7) TMI 22 - CALCUTTA HIGH COURT  Dated - 24 July 1991

Commissioner Of Income-Tax Versus Rai Bahadur Bissesswarlal Motilal Malwasie Trust  1991 (4) TMI 56 - CALCUTTA HIGH COURT   Dated - 22 April 1991

Board’s circular:

(1/ 1148-CBDT F. No. 267/482/77-IT (Part) dated February 9, 1978 CBDT Bulletin Tech. XXIII/582.)".

Lakshmiratan Engineering Works Ltd. v. Assistant Commissioner (judicial) I, Sales Tax 1967 (9) TMI 116 - SUPREME COURT OF INDIA,

Prescribed forms under tax laws:

Various forms are prescribed under tax laws and other laws for the purpose of obtaining information in a standard form. Some forms are simply signed and / or verified by tax payer some require report from accountant ( say CA, CMA or CS). The verification and report from accountant is prescribed for the purpose of greater accuracy and authenticity of data and information in prescribed from for use by concerned authorities.

Prescribed forms and report therein or thereon are to make work easy:

When information is furnished in prescribed form and is also verified by accountant, it becomes easy for concerned authorities to act on it. Verification by accountant ensure more accuracy and reliability of data. When any data and information is compiled with by tax payer, it must be relied on, when it is duly checked and verified by accountant and certified to be true and complete, then usually there should be no reason to doubt. In this regard, accountants are supposed to be expert and their report is considered as a report of an expert.

When the form is used by Tax authorities:

Certain forms are submitted by tax payer as basic form like Income Tax Return (ITR). ITR is used by tax authorities for assessment procedures.   In e-filing era, these are checked , analysed and worked upon by machines and software and some human intervention. When a case is selected for scrutiny, the AO apply his mind in thorough checking.

Some forms are supporting forms for claims made in ROI. Some forms are verified by accountant.

Forms for claims are usually used at the time of assessment:

Forms are prescribed for furnishing of information to verify entitlement, correctness and veracity of claim to ensure that the claim has been made as per law. The prescribed form with or without report of accountant is to assist authority to easily understand nature and extent of claim. These forms are usually used by the tax authority at the time of enquiry and assessment. Therefore, practically it makes no difference whether the form has been filed before filing of return or along with return or after filing of return or even during assessment proceedings.

Non-filing of form before or with ROI is a technical lapse causing

 a technical defect which can be rectified:

Failure to file prescribed form along with the ROI is only a technical lapse. Usually a  claim will be allowed only when proper claim has been made in the ROI and assessee is able to establish his entitlement. If prescribed from is filed but claim is not made, then the deduction may not be allowed. Therefore, making a claim and establishing entitlement is more important than filing of prescribed forms.

Un-necessary disputes by tax authorities:

The CBDT has issued several circulars relaxing requirement of timely furnishing of prescribed forms. In spite of such circulars and also judgments of Courts, tax authorities deny deduction merely because of delay in filing of prescribed form.  

For example  1/ 1148-CBDT F. No. 267/482/77-IT (Part) dated February 9, 1978 CBDT Bulletin Tech. XXIII/582 was considered by Calcutta High Court, when tax authorities disputed relief due to not filing of prescribed Form.

Long dispute:

From some of reported judgments cited above we find that Boards circular is dated 09.02.1978, first judgment of Calcutta High Court is dt. 22 April 1991 second is dt.  24.07.1991 judgment of Bombay High Court is dated 23.09.1993, and recent judgment of the Supreme Court is dated   24.07.2015.

The judgment of the Supreme Court affirms judgments of various High Courts on similar issues. 

Principal apply to all forms and distinction should not be made due to different form:

For various deductions, and claims taxpayer need to file information in different forms. The purpose of provision for prescribed forms is similar. When assessee is eligible for a deduction, claim or advantage, it should not be denied merely for the reason that there was delay in filing of prescribed form.

Let us hope that in view of recent judgment of the Supreme Court, tax authorities will not raise un-necessary disputes and will not indulge into litigation on such procedural delays.