CVO Chartered & Cost Accountants’ Association vs. UOI (Bombay High Court)

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L.) NO.955 OF 2021
CVO Chartered & Cost
Accountants’ Association, Mumbai and anr. … Petitioners
V/s.
Union of India and anr. … Respondents
—
Mr.V.Sridharan, Senior Advocate with Mr.Vipul Joshi, Mr.
S.Sriram, Mr.Harsh Kapadia, Advocates for the Petitioners.
Mr.Anil Singh, ASG with Mr.Sham Walve, Advocates for the
Respondents.
—
CORAM : UJJAL BHUYAN &
MILIND N. JADHAV, JJ.
DATE : JANUARY 15, 2021.
P.C.:-
Heard Mr.Sridharan, learned senior counsel for the
petitioners; and Mr.Anil Singh, learned Additional Solicitor
General of India assisted by Mr.Sham Walve, learned standing
counsel, Revenue for the respondents.
2. This petition has been filed under Article 226 of the
Constitution of India seeking the following reliefs:-
“(a) direct the Respondent No.2 to issue the
forms and utilities for filing of the Return of
Income under section 139 of the Act and the Tax
Audit Report under section 44AB the Act
immediately after the end of the previous year
and at the beginning of the Assessment Year and,
henceforth, not make any alterations in Forms
and Utilities or changes in tax compliance
requirements in that regard, after the beginning
Priya Soparkar 2 wpl 955-21
of the Assessment Year in which the same are
made applicable;
(b) direct the Respondent No.2 to provide the
tax payers and the tax practitioners a clear
period of 183 and 214 days to prepare and submit
the prescribed Reports and Forms, respectively
and that in the matter of extension of due dates,
consult the stakeholders well in advance and not
to keep the matter pending till last moment.
(c) direct the Respondent No.2 to extend the
due date for filing the Income Tax Returns (ITR)
for A.Y. 2020-2021 till 31st March, 2021 and to
extend the due date for filing the Tax Audit
Reports (TAR) for A.Y. 2020-2021 to 28th February,
2021;
(d) for ad-interim reliefs in terms of prayers in
clauses above;
(e) for costs of the petition; and
(f) for such other and further other reliefs as
this Hon’ble Court may deem fit and proper in
the nature and circumstances of the case.”
3. Petiitoner No.1 is a trust representing Chartered
Accountants, Company Secretaries and Cost Accountants
whereas petitioner No.2 is a Chartered Accountant besides
being an assessee under the Income Tax Act, 1961 and Vice-
President of petitioner No.1 as well.
4. From the prayer portion as extracted above, it is seen
that principal relief sought for by the petitioners is for a
direction to respondent No.2 i.e. Central Board of Direct Taxes
(also referred to as “CBDT” hereinafter) to extend the due
date for filing income tax returns for the assessment year
2020-21 till 31st March, 2021 and to extend the due date for
filing tax audit reports for the said assessment year to 28th
February, 2021.
Priya Soparkar 3 wpl 955-21
5. Due date for filing of return of income in the case of
those categories of assessees whose accounts are required
to be audited is 15th February, 2021; and the due date for
filing tax audit report under section 44AB of the Income Tax
Act, 1961 (briefly “the Act” hereinafter) is 15th January, 2021.
6. It may be mentioned that seeking similar relief, a writ
petiton was filed in the Gujarat High Court by the All Gujarat
Federation of Tax Consultants. By order dated 8th January,
2021 Gujarat High Court directed Union of India, Ministry of
Finance to look into such grievance and, thereafter, to take
an appropriate decision in accordance with law.
7. Though not part of the writ petition, at the hearing Mr.
Sridharan has produced before us a copy of order dated 11th
January, 2021 passed by the CBDT under section 119 of the
Act which we have taken on record. By the said order all
representations made for further extension of due dates have
been rejected. Since the order dated 11th January, 2021 is
relevant, the same is extracted hereunder in its entirety:-
“F.NO.370153/39/2020 TPL
GOVERNMENT OF INDIA
MINISTRY OF FINANCE DEPARTMENT OF REVENUE
(CENTRAL BOARD
OF DIRECT TAXES)
(TAX POLICY AND LEGISLATION DIVISION)
***********
New Delhi, 11th January, 2021
ORDER UNDER SECTION 119 OF INCOME TAX ACT,
1961
Priya Soparkar 4 wpl 955-21
The Hon’ble Gujarat High Court vide judgment dated
8th January, 2021, in the case of The All India Gujarat
Fedration of Tax Consultants Vs. Union of India, SCA
13653 of 2020, has directed the Ministry of Finance
to look into the issue of extension of due dates for
filing of Audit Report under section 44AB of the Income
Tax Act more particularly the representation dated
12.10.2020 and take an appropriate decision in
accordance with law.
2. In the wake of the global pandemic due to COVID-19
the due dates for filing of income tax returns for A.Y.
2020-21 was 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,
for taxpayers whose amount due does not exceed
rupees one lakh, also coincide with the due dates for
filing of income tax returns. The table below
summarises the various due date extensions given:
S.
No.
Action Original due
date
1st
Extension
vide TOLA
2020
2nd
Extension
vide
Notification
3rd
Extension
Notification
S.O. 4805
Priya Soparkar 5 wpl 955-21
S.O.
3906(E)
dated
29.10.2020
(E) dated
31.12.2020
1 Return
for
Non-
Audit
Cases
31.07.2020 30.11.2020 31.12.2020 10.01.2021
2 Tax
Audit
30.09.2020 31.10.2020 31.12.2020 15.01.2021
3 Return
for Tax
Audit
Cases
31.10.2020 30.11.2020 31.01.2021 15.02.2021
5. Thus, it is apparent that the Government has not
only considered representations of various
stakeholders but also has been proactive in
providing relaxation to the taxpayers by extending due
dates regularly. The table below gives the statistical
data comparing the return filing statistics of A.Y. 2019-
20 and A.Y. 2020-21
Date –
this
year
AY 20-21
ITRs filed
Daily figures Date- last
year
AY 19-20
ITRs filed
Daily
figures
05-Jan-
21
5,08,48,0
22
7,26,177 26-Aug-19 4,14,13,
558
13,65,
348
06-Jan-
21
5,16,71,3
98
8,23,376 27-Aug-19 4,30,99,
600
16,86,
042
07-Jan-
21
5,27,14,7
51
10,43,353 28-Aug-19 4,51,44,
749
20,45,
149
08-Jan-
21
5,41,54,4,
35
14,39,684 29-Aug-19 4,77,39,
460
25,94,
711
09-Jan-
21
5,64,10,5
61
22,56,126 30-Aug-19 5,12,55,
607
35,16,
147
10-Jan-
21
5,95,15,3
22
31,04,761 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 31st August
which was the last day of filing of the all the returns
Priya Soparkar 6 wpl 955-21
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 31,035
24-Oct-
19
10,977 87,350 08-Jan-
21
3,316 29,924
25-Oct-
19
11,841 93,575 09-Jan-
21
2,824 26,924
26-Oct-
19
10,366 91,397 10-Jan-
21
1,416 16,370
27-Oct-
19
2,309 30,861 11-Jan-
21
28-Oct-
19
6,138 59,785 12-Jan-
21
29-Oct-
19
10,119 1,00569 13-Jan-
21
30-Oct-
19
23,125 1,87,444 14-Jan-
21
31-Oct-
19
42,280 3,15,190 15-Jan-
21
Grand
Total
cumula
tive
2,88,236 25,37,444 Grand
Total
cumulati
ve
2,14,80
4
18,49,4
61
6. The above table also show that majority of the audit
reports under section 44AB of the Act as well as
income tax returns are filed within the last few days of
the dates only. For A.Y. 2019-20 it is seen that 24% of
total audit reports were filed in last 3 days before the
due date. Therefore, lesser filing compliances having
been made much before the due date cannot be said
to be an anomalous situation.
Priya Soparkar 7 wpl 955-21
7. A look at the relaxation of similar nature provided by
other economies globally makes it clear that the
Government of India has been very empathetic to the
needs of the taxpayers as compared various other
countries. It is apparent from the table no other
country has extended the due dates as much as India.
Even countries which are comparatively worse
hit by COVID19, like the USA, UK etc., have provided
no or lesser extensions in due dates. The table below
lists such extensions given by a few countries:
Country Financ
ial
period
Individual Corporate
Due date Extended
due date
Due date Extend
ed due
date
USA 2019 15th April
2020
15th
October
2020
15th April
2020
15th
Octobe
r 2020
UK 2019-
2020
31 January,
2021
No
Extension
31st
December
2020
No
Extensi
on
Australi
a
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
Extensi
on
Netherl
ands
2019 1st May 2020 No
Extension
1st June
2020
No
Extensi
on
Ireland 2019 12th
November
2020
10th
December
2020
12th
November
2020
10th
Decem
ber
2020
Singap
ore
2019 18th April
2020
31st May
2020
15th
December
2020
15th
January
2020
Canada 2019 30th April
2020
30th
September
2020
May August
2020
30th
Septem
ber
2020
Brazil 2019 1st March
2020
30th April
2020
30th April
2020
30th
June
2020
Priya Soparkar 8 wpl 955-21
8. From the above it may be seen that Government
has been proactive in analyzing the situation and
providing relief to assessee. However, it should also be
appreciated that filing of tax returns/audit reports are
essential part of the obligations of assessee and
cannot be delayed indefinitely. Many functions of the
Income-tax Department start only after the filing of the
returns by the assessee. Filing of tax returns by
assessee also results in collections of taxes either
through payment of self-assessment tax by the
assessee or by the subsequent collection by the
department post processing or assessment of the tax
returns. The tax collections assume increased
significance in these difficult times and Government of
India needs revenue to carry out relief work for poor
and other responsibilities. Any delay in filing returns
affects collection of taxes and other welfare functions
of the state for the vulnerable and weaker sections of
society which is funded through the revenue collected.
Sufficient time has already been given to taxpayers to
file their tax returns and a large number of taxpayers
have already filed their returns of income.
9. From the above discussion, it is apparent that,-
• The due dates for filing of return/tax audit have
already been extended on 3 occasions.
• Internationally, the extension provided by India
is more generous as compared to other
countries.
• The return filing statistics of the current year
indicates that returns filed in this financial year
already for exceeds the returns filed which were
due on the last date of filing of returns.
Any further extension would adversely affect the
return filing discipline and shall also cause injustice to
those who have taken pains to file the
return before the due date. It would also postpone the
collection of revenue thereby hampering the efforts of
the Government to provide relief to the
poor during these COVID times.
10. In this regard, the decisions of the Hon’ble
Supreme Court have also been considered. The
Hon’ble Supreme Court in the case of Govt. of A.P. v.
N. Subbarayudu, (2008) 14 SCC 702 at page 703:
Priya Soparkar 9 wpl 955-21
“5. In a catena of decisions of this Court it
has been held that the cut-off date is fixed
by the executive authority keeping in view
the economic conditions, financial
constraints and many other administrative
and other attending circumstances. This
Court is also of the view that fixing cut-off
dates is within the domain of the executive
authority and the court should not normally
interfere with the fixation of cut-off date by
the executive authority unless such order
appears to be on the face of it blatantly
discriminatory and arbitrary. (See State of
Punjab v. Amar Nath Goyal 1(2005) 6 SCC
754 : 2005 SCC (L&S) 910].
***
7. There may be various considerations in
the mind of the executive authorities due to
which a particular cut-off date has been
fixed. These considerations can be financial,
administrative or other considerations. The
court must exercise judicial restraint and
must ordinarily leave it to the executive
authorities to fix the cut-off date. The
Government must be left with some leeway
and free play at the joints in this connection.
8. In fact several decisions of this 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), vide State of
Bihar v. Ramjee Prasad [(1990) 3 SCC 368:
1991 SCC (L&S) 51] , Union of India v. Sudhir
Kumar Jaiswal [(1994) 4 SCC 212: 1994 SCC
(L&S) 925 : 1994) 27 ATC 561] (vide SCC
para 5), Ramrao v. All India Backward Class
Bank Employees Welfare Assn. 1(2004) 2
SCC 76 2004 SCC (L&S) 337] (vide SCC para
31), University Grants Commission v.
Sadhana Chaudhary [(1996) 10 SCC 536:
1996 SCC (L&S) 1431], etc. It follows,
therefore, that even if no reason has been
given in the counter-affidavit of the
Priya Soparkar 10 wpl 955-21
Government or the executive authority as to
why a particular cut-off date has been
chosen, the court must still not declare that
date to be arbitrary and violative of Article
14 unless the said cut-off date leads to some
blatantly capricious or outrageous result.”
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 JaiswaI 1994(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)
12. In view of the above reasons, all the
representations for further extension of the due date
are hereby rejected.”
8. Grievance expressed by the petitioners as highlighted
by Mr.Sridharan relates to amendment brought to the
Income Tax Rules, 1962 by way of Income Tax (22nd
Amendment) Rules, 2020 vide notification dated 1st October,
2020, whereby certain additions have been inserted in section
115BAA of the Act, amongst others, for the assessment year
2020-21 only. That apart, various utilities for income tax
returns were made available belatedly on 22nd September,
Priya Soparkar 11 wpl 955-21
2020 and subsequently amended on 11th January, 2021.
Extension granted on previous occasions carry no meaning
as those were granted at the eleventh hour. Further,
voluminous instructions for filing income tax return as per
revised form running into 700 plus pages was released by
the CBDT on 31st October, 2020. All these therefore justifies
further extension of the due dates which is a very reasonable
prayer.
9. On the other hand, Mr.Singh submits that the changes
carried out in various forms of the Income Tax Rules, 1961 are
of minor nature having no substantive effect. That apart,
CBDT had already looked into the overall situation of the
country in view of covid-19 pandemic and the resultant
lockdown and had accordingly extended the due dates on
three earlier occasions. He submits that notwithstanding the
critical situation faced by the country life has to go on, so
also the tax administrative machinery.
10. We have heard learned counsel for the parties at
length and given our anxious consideration to the rival
submisions.
11. We find from the order dated 11th January, 2020 passed
by the CBDT under section 119 of the Act that across the
board three extensions of the due dates have been granted.
In so far filing of tax audit report is concerned, the original
due date was 30th September, 2020, which was first
extended to 31st October, 2020, thereafter to 31st December,
Priya Soparkar 12 wpl 955-21
2020 and now to 15th January, 2021. In respect of filing of
income tax return in those cases where tax audit report is
required to be filed the original due date was 31st October,
2020 which was first extended to 30th November, 2020,
thereafter to 31st January, 2021 and finally to 15th February,
2021. Thus, we find that CBDT had considered the evolving
situation in the country and thereafter, had extended the
due dates on three occasions. Now CBDT says that filing of
audit reports and income tax reports cannot be delayed
indefinitely. Therefore, a line has been drawn that no further
extension of the due dates would be granted.
12. Power exercised by the CBDT under section 119 of the
Act is discretionary. On careful consideration of the order
passed by the CBDT on 11th January, 2021 under the said
provision, we are of the considered view that it cannot be
said that CBDT had failed to exercise its discretion or that
CBDT had acted in an arbitrary or unreasonable manner in
refusing to grant further extension of the due dates. We
therefore do not find any good ground to invoke our writ
jurisdiction under Article 226 of the Constitution of India to
direct CBDT for further extension of the due dates.
13. Having regard to the above, we are not inclined to
entertain the writ petition.
14. Writ petition is accordingly dismissed. However, there
shall be no order as to costs.
Priya Soparkar 13 wpl 955-21
15. This order will be digitally signed by the Private
Secretary/Personal Assistant of this Court. All concerned will
act on production by fax or email of a digitally signed copy
of this order.
(MILIND N. JADHAV, J.) (UJJAL BHUYAN, J.)
….