TMI Blog2015 (10) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... te 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tution of India, the petitioners seek the following substantive reliefs : [13] The petitioner, therefore, prays :- [a] 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 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 eng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requires an appropriate utility/software to be made available by the respondents to the assessees. However, the respondents failed to make available the utilities for assessment year 2015 -16 until 07.08.2015, thereby creating a blackout of a period of more than four months making it 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, l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30 th September, that is, 180 days for filing the tax returns, however, this period stands curtailed on account of non-providing of the utility for filing tax returns, thereby causing immense prejudice to the assessees. It was submitted that when the respondent Board, under section 119 of the Act, 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 earl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 Vehemently opposing the petition, Mr. M. R. Bhatt, Senior Advocate, learned counsel for the respondents submitted that the reliefs prayed for in the present petition reveal that the same is more in the nature of a public interest litigation and therefore, should have been filed by way of a public 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... live to the situation prevailing and has not thought it fit to grant any relief. Reliance was placed upon a decision of this court in the case of Commissioner of Income Tax v. Deepak Family Trust (No.1) , (1995) 211 ITR 575, wherein the court had placed reliance upon the decision of the Bombay High Court in 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... situation in administering the Income Tax Act which is a Central Act. 8.4 The attention of the court was invited to the decision of the Karnataka High Court in Karnataka State Chartered Accountants Association v. Union of India, rendered on 28.09.2015 in Writ Petitions No.41109 and 41110 of 2015 wherein, the court has 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the issues. Unless the policy or action is inconsistent with the Constitution and the laws or arbitrary or irrational or abuse of power, the court will not interfere with such matters. Reliance was also placed upon the decision of the Supreme Court in the case of Council of Scientific and Industrial Research and Others v. Ramesh Chandra Agrawal 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 stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect to audit and hence, is directly affected by the non-extension of the due date for filing the returns and hence, the question of filing public interest litigation does not arise. It was submitted that filing of return does not mean only punching of data, details have to be collected which could not have been done till 7 th August, 2015 when the online details 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 assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non-extension of the due date for filing the income tax returns cannot in any manner be said to be reasonable. 10 As regards the contention that a Chartered Accountant has in all to deal with 60 tax audits and corresponding income tax returns, and therefore, it cannot be said that the same cannot be filed within seven weeks, the attention of the court was invited to 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 natu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of a High Court interpreting a statutory provision, it would be a wise judicial policy and practice not to take a different view. However, this is not an absolute proposition and there are certain well known exceptions to it. In cases where a decision is sub silentio, per incuriam, obiter dicta or based on a concession or takes a view which it is impossible to arrive 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tt, learned counsel for the respondents in response to the contention that there are several other categories of assessees than those who are subject to tax audit, submitted that in case of all other assessees, only details are required to be punched in the prescribed forms and therefore, no case of hardship has been made out. It was also urged that just because the petitioners have come to 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... des that: 119. (1) 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. (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 prej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, 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, as noted hereinabove, the utilities for e-filing of returns have been made available only with effect from 7 th August, 2015, thereby curtailing the time 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an be exercised. 54. Reverting to the matters on hand, a very peculiar situation has arisen portraying the genuine hardship to the assessee, as also to the tax consultants, by way of representations made to the Board, it would have been desirable and expedient on the part of the CBDT to have considered such request and exercise the powers by way of a relaxation. What all that has been sought is to make the due date for filing the tax 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 thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t undue hardship may not be caused to the taxpayers. The purpose is of just, proper and efficient management of the work of assessment and the public interest. 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd other assessees with less than one third of the time that is otherwise available under the statute. 16. It may be noted that in the facts of the above case, there was a blackout for a period of one month, whereas in the year under consideration, the utility was not made available till 7 th August, 2015. Thus, it was not possible for any of the assessees who are required to file returns in Forms No.ITR-3, ITR-4, ITR-5, ITR-6 and ITR-7, to file income tax 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -4 in the case of a person being an individual or a Hindu undivided family or other than the individual or Hindu undivided family referred to in clause (a) or (b) or (c) or (ca) deriving income from a proprietory business or profession. Clause (e) prescribes Form No. ITR-5 in the case of a person not being an individual or a Hindu undivided family or a company or a person to which clause (g) applies. Clause (f) prescribes Form No. ITR-6 in the case of a company 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e judgment has expressed the view that there is some merit, if not legal then otherwise, in the grievance of the petitioner. The court noticed that the counsel for the respondents was unable to give reasons for the forms etc. not being available at the beginning of the assessment year on 1 st April of every year and the same thereby causes inconvenience to the practitioners of the subject. The court further observed that there is sufficient time available to the Government, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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