TMI Blog2021 (1) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... s the one involved in the present case. This High Court had directed the CBDT to extend the due date for filing the Income Tax Returns under Section 139 from 30th September 2015 to 31st October 2015 so as to alleviate to a certain extent, the hardships caused to the assesses on account of delay in providing the utilities. However, this Court had to interfere in a situation when for the first time by way of a Notification the CBDT made it mandatory for the assessees to electronically file the Income Tax Returns relevant for the assessment year 2013 14 and onwards. Although Mr. Soparkar, the learned Senior Counsel has criticized the manner in which the decision is taken by the CBDT not to extend the time limit any further, yet we believe that such decision must have been taken after due deliberations, and in taking such decision, many financial experts must have applied their minds. It is true that the Board is vested with the power under Section 119 of the Act to extend the due date and the powers are discretionary in nature and that is the reason why we thought fit to ask the CBDT to look into the matter and take an appropriate decision in accordance with law. If the CBDT has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circular taking a lenient view as regards the consequences of late filing of the Tax Audit Reports as provided under Section 271B of the Act. We leave it to the better discretion of the CBDT in this regard. - R/Special Civil Application No. 13653 of 2020 With 660 of 2021 - - - Dated:- 13-1-2021 - Mr. J.B.Pardiwala And Mr. Ilesh J. Vora, JJ. Mr.Avinash Poddar, Mr SN Soparkar With Mr B S Soparkar, Mr.Vishal J Dave, Mr Nipun Singhvi for the Petitioner. Mr Zoheb Hossain With Mr Varun K Patel With Mr Nikunt K Raval, Advocates for the Respondent. ORAL JUDGMENT Mr. J.B.Pardiwala, 1 The operative part of the order passed by this Court dated 8th January 2021 in the Special Civil Application No.13653 of 2020 reads as under: 21 We are of the view that the respondent No.1 Union of India, Ministry of Finance should immediately look into the issue, more particularly, the representation dated 12th October 2020 at Annexure : I of the paper book (page 108) and take an appropriate decision at the earliest in accordance with law. We, accordingly, direct the respondent No.1 to do so. While taking an appropriate decision, the Union shall bear in mind the observations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as extended vide the Taxation and Other laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (which was enacted on 29th September,2020) to 30th November, 2020. Subsequently, vide notification s.o. 3906(E) dated 29th October, 2020 the due dates for filing of returns were further extended to 31st January, 2021 for cases in which tax audit report under section 44AB of the Income tax Act ( the Act ) is required to be filed and 31 st December, 2020 for all other cases. Further vide notification S.O. 4805 (E) dated 31st December, 2020 the above due dates were further extended to 15th February, 2021 and 10th January, 2021 respectively. 3. As per the provisions of the Act the due date for filing of the audit report under section 44AB is one month prior to the due date of filing of income tax return. Therefore, the said due date was extended to 31st October, 2020 vide the Taxation and Other laws (Relaxation and Amendment of Certain Provisions) Act, 2020, 31st December, 2020 vide notification s.o. 3906(E) dated 29th October, 2020 and further to 15th January, 2020 vide notification s.o. 4805 (E) dated 31st December, 2020. 4. The due dates for payment of self assessment tax, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,04,761 31-Aug-19 5,61,79,905 49,24,298 From the above table, it is apparent that the number of returns filed this year has already exceeded the number of returns filed last year up to 31 st August which was the last day of filing of the all the returns other than the company/tax audit returns, by about 6%. The table below gives the statistical data comparing the filing statistics of tax audit report for A.Y. 2019 20 and A.Y. 2020 21. Date Form 3CA Form 3CB Date Form 3CA Form 3CB 20-Oct-19 2,741 29,760 04-Jan-21 3,079 27,492 21-Oct-19 5,598 51,069 05-Jan-21 3,238 28,875 22-Oct-19 7,626 62,938 06-Jan-21 3,190 30,582 23-Oct-19 9,125 75,031 07-Jan-21 3,323 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue date Extended due date Due date Extended due date USA 2019 15th April 2020 15th October 2020 15th April 2020 15th October 2020 UK 2019-2020 31 January 2021 No extension 31st December 2020 No extension Australia 2018-2019 5th May 2020 5th June 2020 15th May 2020 5th June 2020 South Africa 2019 16th November 2020 No extension 31st December 2020 No extension Netherlands 2019 1st May 2020 No extension 1st June 2020 No extension Ireland 2019 12th November 2020 10th December 2020 12th November 2020 10th December 2020 Singapore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the poor during these COVID times. 11. In fact several decisions of the Hon'ble Supreme Court have gone to the extent of saying that the choice of a cut off date cannot be dubbed as arbitrary even if no particular reason is given for the same in the counter affidavit filed by the Government, (unless it is shown to be totally capricious or whimsical). [State of Bihar vs. Ramjee Prasad 1990(3) SCC 368, Union of Indian Anr. vs. Sudhir Kumar JaiswaI1994(4) SCC 212 (vide para 5), Ramrao Ors. vs. All India Backward Class Bank Employees Welfare Association Ors. 2004 (2) SCC 76 (vide para 31), University Grants Commission vs. Sadhana Chaudhary Ors. 1996(10) SCC 536, etc .] When it is seen that a line or a point there must be and there is no mathematical or logical way of fIxing it precisely, the decision of the legislature or its delegated must be accepted unless it can be said that it is very wide off the reasonable mark. (See Union of India Anr. v. Mis Parameshwaran match works Ltd., 1975 (2) SCR 573, at p. 579; and Dr. (Mrs.) Sushma Sharma etc. etc. v. State of Rajasthan Ors. 1985 (3) SCR 243, at p. 269) 2. In view of the above reasons, all the representations f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 11 There is no fault on the part of the writ applicants and the case is one of genuine hardship on account of the delay on the part of the CBDT. 12 Way back in the year 2014, this Court had directed the CBDT not to introduce new utility with additional requirements in the midst of the year. The directions issued by this Court in the two judgements referred to above have been completely defied. 13 It is argued that this High Court extended the due date in the decision reported in 2015 (61) taxmann.com 431, even while the other High Courts declined to do so. 14 It is argued that by extending the time period, as prayed for, no hardship is going to be caused to the Revenue, whereas, if the time period is not extended, the writ applicants will be put to immense difficulties. 15 Mr. Soparkar, once again, invited our attention to the following chart: ITR/TAR Form Due date of filing (original) Clear days expected from 01.04.2020 Date of availability of e-filing utility Schema updation date Utility updation date Extended due date Effective days availa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , by whatever name called under the provisions of the specified Act is extended upto 31st March 2021. If the adequate time period determined for such purposes is extended upto 31st March 2021 than the same should also be granted to the writ applicants. It is argued that the CBDT has recognized the need to extend the time period and has already extended the same for three times for A.Y. 2021 21. Therefore, the need to extend the time period from the original due dates is genuine and not superfluous. Only the adequacy of extension is in question. It is argued that that the pandemic has not come to an end. 18 In such circumstances referred to above, Mr. Soparkar prays that there being merit in his writ application, the same may be considered appropriately and the time period, as prayed for, may be extended in the interest of not only the tax payers but also the tax professionals. 19 Mr. Avinash Poddar, the learned counsel appearing with Mr. Vishal J. Dave and Mr. Nipun Singhvi, the learned counsel for the writ applicants of the connected writ application submitted that they would adopt all the submissions canvassed by Mr. S. N. Soparkar referred to above and noted above. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limit for filing of the Audit Reports, which is presently fixed as 15th January 2021 should not be extended any further for the following reasons: (1) The Compliance in filing the Tax Audit Reports is rapidly increasing each day as is evident from the following table: Date FORM3 CA AY 20-21 FORM3 CB AY20-21 Cumulati ve figure AY 2021 Date FORM3CA AY 19-21 FORM3C B AY 19-20 Cumulativ e figure AY 19-20 Difference 04-Jan-21 3,079 27,492 18,84,075 20-Oct-19 2,791 29,760 15,30,967 3,53,108 05-Jan-21 3,238 28,875 19,16,188 21-Oct-19 5,598 51,069 15,87,634 3,28,554 06-Jan-21 3,190 30,582 19,49,960 22-Oct-19 7,628 62.938 16,58,198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y filing of Form 3CB was 16,370 which jumped to 41,970 on 11.01.2021 which has again more than doubled to 85,663 on 12.01.2021. The assessees are rapidly complying with the filing of the tax audit report across the country and any interference at this stage may affect the discipline of filings by the Assessees as well as the larger interest of the Revenue and public interest. (3) Notably, from the above table it is also evident that as against last year with 3 days remaining from the deadline, the cumulative figure of the TAR filings for AY 2019 20 was 21,46,953 as against the cumulative figure of the TAR filings this year with three days remaining from the last date is 22,04,908 which is 57,955 already in excess of the last year s TAR filings. Therefore, there is disciplined compliance taking place by the assessees. (4) The TAR utility was available from the beginning of the year, and therefore, there is no justification in seeking an extension for filing the tax audit report. (5) Moreover, the submission that certain ITR Forms were released in June 2020, July 2020, August 2020 and September 2020 respectively and therefore filing of the ITRs should be extended is misplace ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity for various forms from June 2020/September 2020 onwards. (8) The Supreme Court has consistently held that in financial matters judicial deference may be shown to the executive pragmatism and free play in the joints may be given to the executive especially in fixing cut off dates. (9) It has also been demonstrated that the various updates the Petitioner has referred to made to various forms did not amount to changing or increasing any existing fields, rather only the size of such fields were increased in the number of characters or in some cases the field was modified to accommodate from numeric characters to alpha numeric characters keeping in mind certain special cases. A list of such Schema changes and justification was presented before this Court. (10) The consequence of late filing of a tax audit report is provided under Section 271B which reads as under: Failure to get accounts audited. 271B. If any person fails to get his accounts audited in respect of any previous year or years relevant to an assessment year or furnish a report of such audit as required under section 44AB, the Assessing Officer may direct that such person shall pay, by way of penalty, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings or coercive measures till a particular point of time. The Revenue challenged the two orders before the Supreme Court by filing the Special Leave to Petition (Civil) No.10669 of 2020. The Supreme Court passed the following order dated 20th March 2020, which reads thus: The Registry is directed to accept these special leave petitions against the judgment and order(s) passed by the High Court of Judicature at Kerala, Ernakulam Bench in Writ Petition (Civil)No.8231/2020 and of the High Court of Judicature at Allahabad, Allahabad Bench in Writ Petition (Civil) No.7014/2020. Permission to file special leave petitions is granted. Issue notice. In the meantime, there shall be ex parte ad interim stay of the impugned judgment and order(s) passed in the aforesaid writ petitions and of further proceedings before the High Court(s), in view of the stand taken by the Government of India through learned Solicitor General, before us, that the Government is fully conscious of the prevailing situation and would itself evolve a proper mechanism to assuage concerns and hardships of every one. 25 In such circumstances referred to above, the learned counsel appearing for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced by the Revenue itself that the daily Tax Audit Reports filed in 2021 are less than half compared to what was filed in 2019. In such circumstances, it is unrealistic to expect that 25% shortfall can be met in last five days the way it did in 2019. 30 It is pointed out that the United States has given extension of six months, whereas the CBDT has given extension of 3.5 months. It is further submitted that for all other countries (except U.K.), the financial period is the calendar year 2019 i.e. when there was no pandemic. The Audit and Return filing preparation would have begun and materially completed before the pandemic in such cases. Such is not the scenario with India and therefore, such comparison is not valid. It is pointed out that the population of India and the number of returns are substantially large compared to other countries. 31 In the last, it is argued that the case law relied upon on behalf of the Revenue is completely misplaced and not applicable in any manner as in each of those cases relied upon, the challenge was to the fixing of date. The writ applicants do not seek to challenge Section 139(1) or Section 44AB of the Act, 1961. The writ applicants only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances. It is intended to supply deficiency in law. It cannot be granted merely for the asking but has to be obtained where there is no alternative, efficacious and adequate remedy. It cannot be used as an appeal against the decision of a court, tribunal or an authority exercising statutory power. It can only be issued as a last resort where the court is satisfied that without its aid there would be failure of justice. 37 Mandamus is an action or judicial proceeding of a civil nature extraordinary in the sense that it can be maintained only when there is no other adequate remedy, prerogative in its character to the extent that the issue is discretionary, to enforce only clear legal rights, and to compel courts to take jurisdiction or proceed in the exercise of their jurisdiction, or to compel corporations, public and private, and public boards, commissions, or officers, to exercise their jurisdiction or discretion and to perform ministerial duties, which duties result from an office, trust, or station, and are clearly and peremptorily enjoined by law as absolute and official (P.R. Aiyar, Advanced Law Lexicon, (2005), Vol. III P. 2873.). 38 Mandamus is not a writ of rig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uties prescribed by statute, and to keep subordinate and inferior bodies and tribunals exercising public functions within their jurisdictions. It is not necessary, however, that the duty be imposed by statute; mandamus lies as well for the enforcement of a common law duty. Note 196. Mandamus is not a writ of right. Its issuance unquestionably lies in the sound judicial discretion of the court, subject always to the wellsettled principles which have been established by the courts. An action in mandamus is not governed by the principles of ordinary litigation where the matters alleged on one side and not denied on the other are taken as true, and judgment pronounced thereon as of course. While mandamus is classed as a legal remedy, its issuance is largely controlled by equitable principles. Before granting the writ the court may, and should, look to the larger public interest which may be concerned an interest which private litigants are apt to overlook when striving for private ends. The court should act in view of all the existing facts, and with due regard to the consequences which will result. It is in every case a discretion dependent upon all the surrounding facts and circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, for which, the person approaching the writ court should statutorily, has a clear, specific and unequivocal, constitutional or statutory or legal right to the relief sought for and the failure on the part of those who are bound to perform certain duties and functions, as laid down by the legislature or directions issued for the purpose of enforcing the provisions of an enactment or of any delegated or subordinate legislation. There must be a legal right and corresponding legal duty. 43 In State of Kerala v. A.Lakshmi Kutty, reported in 1986 (4) SCC 632, the Supreme Court held that a Writ of Mandamus is not a writ of course or a writ of right but is, as a rule, discretionary. There must be a judicially enforceable right for the enforcement of which a mandamus will lie. The legal right to enforce the performance of a duty must be in the applicant himself. In general, therefore, the Court will only enforce the performance of statutory duties by public bodies on application of a person who can show that he has himself a legal right to insist on such performance. The existence of a right is the foundation of the jurisdiction of a Court to issue a writ of Mandamus. The present tren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sum up, (a) certain conditions have to be satisfied before a writ of mandamus is issued; (b) the petitioner for a writ of mandamus must show that he has a legal right to compel the respondent to do or abstain from doing something; (c ) there must be in the petitioner a right to compel the performance of some duty cast on the respondents; (d) the duty sought to be enforced must have three qualities. It must be a duty of public nature created by the provisions of the Constitution or of a statute or some rule of common law; (e) the remedy of a writ of mandamus is not intended to supersede completely the modes of obtaining relief by an action in a Civil Court or to deny defence legitimately open in such actions; (f) the power to issue a writ of mandamus is a discretionary power. It is sound use of discretion to leave the party to seek his remedy by the ordinary mode of action in a Civil Court and to refuse to issue a writ of mandamus; (g) a writ of mandamus is not a writ of course or a writ of right but is, as a rule a matter for the discretion of the Court; (h) in petitions for a writ of mandamus, the High Courts do not act as a Court of appeal and examine the facts for themselves. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. Upon due consideration of all the relevant aspects of the matter, if the Board has taken the final decision not to extend the time limit any further, then it is difficult for this Court to issue a writ of mandamus to the Board to extend the time limit on the assumption that undue hardship would be caused to the taxpayers and the tax professionals, more particularly, in view of the latest data put forward before us by the Revenue. 49 It is the case of the CBDT that it has declined to exercise its power under Section 119 of the Act as the conditions for exercise of such power do not exist. It is the case of the Revenue that the issue of hardship was dealt with considerably at the relevant point of time and that is the reason why three times the time limit came to be extended. The Board has now thought fit in the interest of the Revenue not to extend the time period any further. There are so many vital issues which the Revenue needs to keep in mind before taking such decision. The question is whether this Court should go into all such issues which weighed with the CBDT in taking a particular decision one way or the other and substitute the same with that of this Court on the gr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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