Gujarat High Court by order date 29-09-2015 has extended the due date for tax audit/income tax return for AY 2015-16 from 30-09-2015 to 31-10-2015. The order was given in Special Civil Application (SCA) 15075/2015 filed by All Gujarat Federation of Tax Consultants (AGFTC) vs Central Board of Direct Taxes and Others.
The relevant excerpts of the judgment are produced as under:
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.
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 returns are to be filed, it was expected of the Board to exercise the discretionary powers vested in it under section 119 of the Act to ameliorate the difficulties faced by the assessees on account of no default on their part, at least to a certain extent, by extending the due date for filing the income tax returns for a reasonable time. In the opinion of this court, the Board should not create a situation whereby the assessees are required to knock the doors of the court year after year, more so, when on account of the delay on the part of the respondents, it is the assessees who would have to face the consequences of not filing the returns in time. The contention that no prejudice is caused to the petitioners/assessees, therefore, does not merit acceptance.
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.
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 may be germane to refer to rule 12 of the rules, which prescribes the different forms under which assessees belonging to various categories enumerated thereunder are required to file their returns. Clause (c) of subrule (1) of rule 12 prescribes Form No.ITR-3 in case of a person being an individual or Hindu Undivided family who is a partner in a firm and where income chargeable to income-tax under the head “Profits and gains of business and profession” does not include any income except the categories enumerated therein. Clause (d) of rule 12(1) prescribes Form No. ITR-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 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 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.
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 return by 30th September, 2015 and consequently, the time prescribed by the Act gets curtailed on account of non-availability of the necessary utility for filing the return online. Besides, the Delhi High Court has not taken into consideration the factor that unless the utility is made available, the assessees would not be aware of the details which they are required to furnish, inasmuch as, the delay in providing the utilities is on account of the changes made in the corresponding forms. It may also be pertinent to note that the court in paragraph 22 of the 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 1st 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 1st April of the assessment year unless there is a valid reason therefore and which should be recorded in writing by the respondents themselves, without waiting for any representations to be made. The court further observed that the respondents, while doing so, to also take a decision whether owing thereto any extension of the due date is required to be prescribed and accordingly notify the public.
As regards the decision of the Karnataka High Court, the court has merely relegated the petitioners therein to the CBDT for the consideration of their representation and does not lay down any proposition of law. The Rajasthan High Court has expressed the view that the decision contained in the announcement dated 9th September, 2015 being a policy decision, the court should not interfere. The court, therefore, has not 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.
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.
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 Court has taken a view different from the Delhi High Court and hence, it is permissible for the court to adopt the view with which it agrees.
In the light of the above discussion, the petition partly succeeds and is accordingly allowed to the following extent. The respondent Board is hereby directed to forthwith issue requisite notification under section 119 of the Act extending the due date for e-filing of the income tax returns in relation to the assessees who are required to file return of income by 30 th September, 2015 to 31st October, 2015. The respondents shall henceforth, endeavour to ensure that the forms and utilities for e-filing of income tax returns are ordinarily made available on the 1st day of April of the assessment year. Rule is made absolute to the aforesaid extent with no order as to costs.
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