TMI Blog2021 (1) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 - GUJARAT HIGH COURT] more particularly, the observations of Vaghjibhai S. Bishnoi [2013 (8) TMI 370 - GUJARAT HIGH COURT] that the powers given to the CBDT are beneficial in nature to be exercised for proper administration of fiscal law so that 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. One additional aspect needs to be kept in mind before taking any appropriate decision that the time period for the officials of the tax department has been extended upto 31st March 2021 having regard to the current covid19 pandemic situation. If that be so, then some extension deserves to be considered in accordance with law. Let an appropriate decision be taken by 12th January 2021. Post this matter on 13th January 2021 on top of the Board. - R/Special Civil Application No. 13653 of 2020 - - - Dated:- 8-1-2021 - Honourable Mr. Justice J.B. Pardiwala And Honourable Mr. Justice Ilesh J. Vora For the Petitioner(s) : Mr SN Soparkar, Senior Advocate With Mr B S Soparkar For the Respondent : Mr Varun Pate, Advocate, DS Aff. Not Filed (N)(11) ORDER (PER : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r short, the Act, 1961 ) by extending the due date of 31st October 2020 at least for three months i.e. upto 31st January 2021 for the purpose of both : (1) filing the ITR and (2) tax audit report in case of assessees whose accounts are required to be audited. Mr. Soparkar would submit that in line with the reality of covid 19 pandemic and due to orders and directives for work places from the Central Government Home Ministry regarding Work for Home , Staggering of work / Business hours and reduced workforce it is impossible for the Tax Practitioners to complete the Audit work to issue a certificate required under section 44AB within the extended due date of 30.10.2020. It is submitted that as reflected in the data released by the respondent No.2, for 2019 as many as 55% of the Income Tax Returns and Tax Audit Reports were filed outside of office hours which shows the sheer burden of workload upon the Tax Practitioners to work overtime to complete the assignment. It is, therefore, submitted that in the year 2020 with covid infections and safety measures, such work is not possible. Mr. Soparkar would submit that the Ministry of Law and Justice has in fact recognized the reality ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... comes very less and cause severe hardship to the assessees and the tax practitioners. Tax Audit of accounts of an assessee is a detailed and time consuming exercise, wherein the Chartered Accountant is required to vouch for and certify the correctness of the details provided in the TAR. Understanding the need for the thoroughness of the Audit, the legislators, in their wisdom, have statutorily granted a reasonable time beginning from the Assessment Year on 1st of April. It may be noted that only after such thorough audit of accounts of an assessee is carried out, then a computation of the actual tax liability of an assessee can take place and ITR can be filed. Arbitration alternation of such mandatorily required details causes genuine and grave hardship upon the assessees, and the principle of natural justice only mandates that such introduction be made in systematic manner accounting for time line to take into account the changes broughtin. 3.2 Mr. Soparkar invited the attention of this Court to the chart as below to give a fair idea as regards the delay caused in release of the utility to e-file the forms: ITR/Form Due date of filing ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntrary 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 No.15075 of 2015 decided on 29th September 2015] 6 Mr. Soparkar would submit that in both these cases upon which reliance is placed, the tendency of the respondents to make multiple last minute changes was criticized. In both the judgements, directions were issued to grant additional time for filing returns. 7 Mr. Soparkar also pointed out that a detailed representation has been filed addressed to the Union Finance Minister of India dated 12th October 2020 at Annexure : I to this writ application (page : 108). However, there is no response in this regard at the end of the respondent No.1 till this date. 8 In such circumstances referred to above, Mr. Soparkar prays that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR-5 '25-Aug-2020 ITR-6 '22-Sept-2020 ITR-7 '03-Sept-2020 11 Mr. Patel would further submit that IT₹ 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-filing portal on22Oct2020. The utility before the date of notification for amendment of Form was already available in efiling portal which would be used for filing the Form No.3CA3CD 3CB3CD A.Y. 2020221 till Oct. 1st Form No.3CEB for A.Y. 202021, incorporating amendments as per notification dated 01Oct2020 was released in e-filing portal on 28 Oct 2020. The utility before the date of notification for amendment of Form was already ava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 judgement: 38. We do not have very clear details as to what was the period made available for the receipt of the suggestion and consultation from the stakeholders and what was the extra time consumed by the Law Ministry for the purpose of vetting. However, without going into these details, when it could be noted that this change of utility and nonavailability of the new version till 20th August, 2014 is the cause for the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts, 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 Assessing Officers and connected with the respective Regional Computer Center for data/information exchange, in a phased manner. Accordingly, in the first phase, Delhi, Mumbai and Chennai City regions were taken up and provided with state of art hardware and software connected with RCC, through intercity and intracity linkages. After stabilizing of the computer systems in the 3 RCCs, computerization of 33 other centres covering the rest of the country was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 otherwi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 required to be used for the public purpose,particularly, when the party has not other remedy available. It is essentially designed to promote justice. 59. The Apex Court in the case of Secretary, Cannanore District Muslim Educational Association, Karimbam v. State of Kerala and others, reported in (2010) 6 SCC 373 , while emphasizing the importance of writ of mandamus and its applicability held and observed thus : 29. While dismissing the writ petition the Hon'ble High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... go, 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 mistakes . 35. In Dwarka Nath v. Income Tax Officer, Special Circle, D. Ward, Kanpur and another AIR 1966 SC 81, a three Judge Bench of this Court commenting on the High Court's jurisdiction under Article 226 opined that this Article is deliberately couched in comprehensive language so that it confers wide power on High Court to 'reach injustice whenever it is found'. Delivering the judgment Justice Subba Rao (as His Lordship then was) held that the Constitution designedly used such wide language in describing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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 : 89. Nature of Mandamus:... is to remedy defects of justice and accordingly it will issue, to the end that justice may be done, in all cases where there is a specific legal right and no specific legal remedy for enforcing that right, and it may issue in cases where, although there is an alternative legal remedy yet that mode of redress is less convenient beneficial and effectual. (See para 19, page 546 of the report) In paragraph 20, in the same page of the report, this Court further held : 20. ...and in a proper case, in order to prevent injustice resulting to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 filing of the TAR, as provided in the Notification dated 20th August, 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 reengineering may not result in undue hardship to the stakeholders for whose benefit the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tants 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 to file tax returns in Form ITR-1, ITR-2, ITR-2A, ITR-4S, in whose case also, there was a delay in furnishing the necessary utility, the Board had extended the due date for filing the income tax returns. The stand of the Board is that the period of seven weeks which is available to the petitioner and other assessees for filing online income tax returns, is sufficient and therefore, there is no reason for extending the due date for filing the income tax returns. 12 While it is true that the powers under section 119 of the Act are discretionary in nature and it is for the Board to exercise such powers as and when it d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority 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 laws may be correctly applied. Hard cases which can be properly categorised as belonging to a class, can thus be given the benefit of relaxation of law by issuing circulars binding on the taxing authorities. 13 Thus, the power under section 119 of the Act is a beneficial power given to Board for proper administration of fiscal law so that undue hardship may not be caused to the assessee and the fiscal laws may be correctly applied. In the case at hand, as is evident from the facts noted hereinabove, in the normal course, assessees who are subject to audit as well as other categories of assessees referred to hereinabove, can file their returns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 provided under subsection (1) of section 119 of the Act, the CBDT also has specific powers to pass general or special orders in respect of any class or class of cases by way of relaxation of any of the provisions of section, which also includes section 139 of the Act. If the Board is of the opinion that it is necessary in the public interest to so do it. For avoiding the genuine hardship in any case or class of cases, the CBDT if considers desirable and expedient, by general or special order, it can issue such orders, instructions and directions for proper administration of this Act. All such authorities engaged in execution of the Act are expected to follow the same. Any re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 the rigor 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 forgo the advantage when required to wield it in a manner it considers just by relaxing the rigour of the law or in other permissible manners as laid down in Section 119. The power is given for the purpose of just, proper and efficient management of the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eptember, 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 not result in undue hardship to the stakeholders for whose benefit the same operates. 76. Besides, no grave prejudice would be caused to the revenue if the due date for filing the return of income is also extended till the date of filing of the tax audit report, whereas the assessee would be visited with serious consequences as referred to hereinabove in case of non-filing of return of income within the prescribed period as he would not be in a position to claim the benefit of the provisions referred to hereinabove. The apprehension voiced by the revenue that in case due date for filing return of income is extended, due date for self-assessment also gets automatic extension, resulting into delay in collection of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iling 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 date for filing the income tax returns under section 139 of the Act from 30th September, 2015 to 31st October, 2015 so as to alleviate to a certain extent, the hardships caused to the assessees on account of delay in providing the utilities. 19 Significantly, one of the factors which appears to have weighed with the Board while turning down the request for extension of the due date for filing returns is that as per the guidelines of ICAI, a practicing Chartered Accountant, as an individual or as a partner of a firm, can conduct only upto sixty tax audits under section 44AB of the Act and corresponding number of tax returns are required to be filed, in respect of which, the seven weeks available to them should be sufficient. In this regard it ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 stand that such a trend may not be encouraged. Had it not been for the laxity on the part of the respondents in providing the utilities, there would not have been any cause for the petitioners to seek extension of the due date for filing tax returns. 21 As regards the decision of the Delhi High Court on which reliance has been placed by the learned counsel for the petitioners, it may be noted that the learned Single Judge has observed that the claim of the petitioners that it is entitled to 180 days for filing the return of income is not prescribed either in the statute or rules, whereas as noticed hereinabove, the scheme of the Act clearly indicates that ordinarily a period of 180 days is available to an assessee who is required to file the income tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot 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 date for e-filing of returns upto 31st October, 2015. Therefore, instead of extending the due date to 30th November as prayed for in the petition, with a view to maintain consistency in the due date for e-filing of returns, this court is of the view that, the same date is required to be adopted. 24 The contention that once the Delhi High Court has taken a particular view, in relation to an all India statute, it is not permissible for this court to take a different view, does not merit acceptance in the light of the view taken by this court in N R Paper Board Limited v. Deputy Commissioner of Income tax (supra). Besides, even if such contention were to be accepted, there are conflicting decisions of different High Courts, inasmuch as, the Punjab and Haryana High ..... X X X X Extracts X X X X X X X X Extracts X X X X
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