C\/SCA\/13653\/2020 JUDGMENT
\nIN THE HIGH COURT OF GUJARAT AT AHMEDABAD
\nR\/SPECIAL CIVIL APPLICATION NO. 13653 of 2020
\nFOR APPROVAL AND SIGNATURE:
\nHONOURABLE MR. JUSTICE J.B.PARDIWALA
\nand
\nHONOURABLE MR. JUSTICE ILESH J. VORA
\n==========================================================
\n1 Whether Reporters of Local Papers may be allowed to see the
\njudgment ? YES
\n2 To be referred to the Reporter or not ? NO
\n3 Whether their Lordships wish to see the fair copy of the
\njudgment ? NO
\n4 Whether this case involves a substantial question of law as to
\nthe interpretation of the Constitution of India or any order
\nmade thereunder ? NO
\n==========================================================
\nTHE ALL GUJARAT FEDERATION OF TAX CONSULTANTS
\nVersus
\nUNION OF INDIA
\n==========================================================
\nAppearance:
\nMR SN SOPARKAR, SENIOR ADVOCATE WITH MR B S SOPARKAR(6851)
\nfor the Petitioner(s) No. 1,2
\nMR VARUN PATE, ADVOCATE for the Respondent No.2, 3
\nDS AFF.NOT FILED (N)(11) for the Respondent(s) No. 1,2,3
\n==========================================================
\nCORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALA
\nand
\nHONOURABLE MR. JUSTICE ILESH J. VORA
\nDate : 08\/01\/2021
\nORAL JUDGMENT
\nPage 1 of 30
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\n(PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA)
\n1 The draft amendment is allowed. The same shall be carried out at
\nthe earliest.
\n2 By this writ application under Article 226 of the Constitution of
\nIndia, the writ applicants have prayed for the following relief:
\n\u201cThe petitioners, therefore, prays that this Hon’ble Court be pleased to
\nissue a writ of mandamus or a writ in the nature of mandamus or a writ
\nof certiorari or a writ in the nature of certiorari or any other appropriate
\nwrit, direction or order and be pleased to:
\n(a) direct the respondent No.2 henceforth not make any alternations in
\nForms and Utilities or changes in tax compliance requirements, after the
\nbeginning of the Assessment year in which the same are made applicable;
\nproviding the tax payers and the tax practitioners a clear period of 183
\nand 214 days to prepare and submit the due reports and forms
\nrespectively.
\n(b) direct the respondent No.2 to extend the due date for filing the Income
\nTax Returns (ITR) and Tax Audit Reports (TAR) for AY 202021
\nto
\n31.01.2021
\n(c) any other and further relief deemed just and proper be granted in the
\ninterest of justice.
\n(d) to provide for the cost of this petition.\u201d
\n3 The facts giving rise to this writ application may be summarised as
\nunder:
\n3.1 The writ applicant No.1 is a Trust formed and registered in
\naccordance with the provisions of the Bombay Public Trust Act, 1950
\n(for short, \u201cthe Act, 1950\u201d) and has, as it members, the various
\nprofessions and various associations of professionals from the State of
\nGujarat engaged in the field of practicing taxation. The writ applicant
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\nNo.2 is a practicing Chartered Accountant and a CoChairman
\nof the
\nrepresentation committee of the writ applicant No.1. Mr. S. N. Soparkar,
\nthe learned Senior Counsel assisted by Mr. B. S. Soparkar, the learned
\ncounsel appearing for the writ applicant would submit that having
\nregard to the covid19
\npandemic situation, the CBDT i.e. the respondent
\nNo.2 herein thought fit to extend the due date for filing the tax audit
\nreport from 30th September 2020 to 31st October 2020 in the case of all
\nthose assessees who are required to get their books of account audited.
\nMr. Soparkar wants this Court to issue a writ of mandamus to the Union
\nof India, Ministry of Finance, to ask the CBDT to exercise its powers
\nvested in it under Section 119 of the Income Tax Act, 1961 (for short,
\n\u201cthe Act, 1961\u201d) by extending the due date of 31st October 2020 at least
\nfor three months i.e. upto 31st January 2021 for the purpose of both : (1)
\nfiling the ITR and (2) tax audit report in case of assessees whose
\naccounts are required to be audited. Mr. Soparkar would submit that in
\nline with the reality of covid 19 pandemic and due to orders and
\ndirectives for work places from the Central Government Home Ministry
\nregarding \u201cWork for Home\u201d, \u201cStaggering of work \/ Business hours\u201d and
\n\u201creduced workforce\u201d it is impossible for the Tax Practitioners to
\ncomplete the Audit work to issue a certificate required under section
\n44AB within the extended due date of 30.10.2020. It is submitted that as
\nreflected in the data released by the respondent No.2, for 2019 as many
\nas 55% of the Income Tax Returns and Tax Audit Reports were filed
\noutside of office hours which shows the sheer burden of workload upon
\nthe Tax Practitioners to work overtime to complete the assignment. It is,
\ntherefore, submitted that in the year 2020 with covid infections and
\nsafety measures, such work is not possible. Mr. Soparkar would submit
\nthat the Ministry of Law and Justice has in fact recognized the reality of
\nthe situation and extended en mass time limits (except otherwise
\nspecified) of the specified Acts to 31st March 2021 which falls during the
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\nperiod from 30th March 2020 to 31st December 2020 vide the Taxation
\nand Others Laws (Relaxation and Amendment of Certain Provisions) Act,
\n2020. Even in the specified extensions, in many cases, the effective
\nextensions are substantial ranging to 3 to 6 months. It is, therefore,
\nsubmitted that a meagre extension of one month in case of the filing of
\nreturn of income under Section 139 is violative of Article 14 and Article
\n19(1)(g) of the Constitution of India being manifestly arbitrary,
\ndiscriminatory and unreasonable. Mr. Soparkar would submit that as
\nstated by this High Court in Special Civil Application No.15075 of 2015,
\nthere is a duty cast upon the respondents to ensure that necessary utility
\nfor efiling
\nof the incometax
\nreturns is made available to various
\ncategories of assessees at the beginning of the assessment year so that
\nthe assessees can plan their tax matters accordingly. However, the
\namendment in the forms with additional requirements and utilities for efiling
\nof returns being available only belatedly curtails the time available
\nfor filing the incometax
\nreturns. It is submitted that the amendment in
\nrules and disclosure requirements as late as on 1st October 2020 has
\neffectively given only 30 days (as opposed to extended 214 days) to the
\nChartered Accounts to furnish the Tax Audit Report. Also, the belated
\nissuance of the ITR forms have also curtailed the effective time period.
\nAny user who file ereturn
\nwill have to create an XML file based on the
\nschema. The schema is needed by those, software companies and
\norganizations who wish to use this code to help create their own
\nsoftware utility for filing up these forms. Due to frequent changes in
\nschema or utility, third party services providers will have to upgrade
\ntheir software which may take about 5 to 6 days to upgrade, depending
\nupon nature of change. It is further submitted that more than 50% of the
\nIncome Tax Returns and Tax Audit Reports were efiled
\nin 2019 using
\nprivate softwares and therefore, the issuance of Schema and Validation
\nRules before sufficient time is also crucially important for the same. Mr.
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\nSoparkar further submitted that due to delay in eenabling
\nof return of
\nforms, the effective time available for filing return of income becomes
\nvery less and cause severe hardship to the assessees and the tax
\npractitioners. Tax Audit of accounts of an assessee is a detailed and time
\nconsuming exercise, wherein the Chartered Accountant is required to
\nvouch for and certify the correctness of the details provided in the TAR.
\nUnderstanding the need for the thoroughness of the Audit, the
\nlegislators, in their wisdom, have statutorily granted a reasonable time
\nbeginning from the Assessment Year on 1st of April. It may be noted that
\nonly after such thorough audit of accounts of an assessee is carried out,
\nthen a computation of the actual tax liability of an assessee can take
\nplace and ITR can be filed. Arbitration alternation of such mandatorily
\nrequired details causes genuine and grave hardship upon the assessees,
\nand the principle of natural justice only mandates that such introduction
\nbe made in systematic manner accounting for time line to take into
\naccount the changes broughtin.
\n3.2 Mr. Soparkar invited the attention of this Court to the chart as
\nbelow to give a fair idea as regards the delay caused in release of the
\nutility to efile
\nthe forms:
\nITR\/Form Due date of
\nfiling
\n(original)
\nDue date of
\nfiling
\n(extended)
\nTime
\navailable
\n(extended)
\nDate of
\navailability
\nof efiling
\nutility
\nEffective time
\navailable
\nITR 1 31.07.2020 30.11.2020 244 days 02.06.2020 182 days
\nITR 2 31.07.2020 30.11.2020 244 days 26.06.2020 158 days
\nITR 3 31.07.2020 30.11.2020 244 days 31.07.2020 123 days
\nITR 4 31.07.2020 30.11.2020 244 days 05.06.2020 179 days
\nITR 5 31.07.2020 30.11.2020 244 days 25.08.2020 98 days
\nITR 6 31.07.2020 30.11.2020 244 days 10.10.2020 52 days
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\nITR 7 31.07.2020 30.11.2020 244 days 03.09.2020 89 days
\nForm Due date of
\nfiling
\n(original)
\nDue date of
\nfiling
\n(extended)
\nTime
\navailable
\n(extended)
\nDate of
\nupdation of
\nutility
\nEffective time
\navailable
\n3CA, 3CB,
\n3CD
\n30.09.2020 31.10.2020 214 days 25.08.2020 67 days
\nDELAY IN AMENDING 3CA\/3CB\/3CD FORM
\nDate on which form \/ rules are amended Date of providing amended form \/ utility
\n‘1.10.2020 Awaited as on 19.10.2020
\n4 It is submitted that the decision of the respondent No.2 to
\nintroduce the new forms to be made applicable 30 days prior to the due
\ndate and to subsequently amend the utility without corresponding
\nextension of the due date to efile
\nis without any basis and contrary to
\nlaw.
\n5 Mr. Soparkar, in support of his aforesaid submissions, has placed
\nstrongly reliance on the following two decisions of this High Court:
\n(1) All Gujarat Federation of Tax Consultants vs. Central
\nBoard of Direct Taxes [2014] 50 taxmann.com 115 (Gujarat)
\n[Special Civil Application No.12571 and 12656 of 2014
\ndecided on 22nd September 2014]
\n(2) All Gujarat Federation of Tax Consultants vs. Central
\nBoard of Direct Taxes [2014] 50 taxmann.com 115 (Gujarat)
\n[Special Civil Application No.15075 of 2015 decided on 29th
\nSeptember 2015]
\n6 Mr. Soparkar would submit that in both these cases upon which
\nreliance is placed, the tendency of the respondents to make multiple last
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\nminute changes was criticized. In both the judgements, directions were
\nissued to grant additional time for filing returns.
\n7 Mr. Soparkar also pointed out that a detailed representation has
\nbeen filed addressed to the Union Finance Minister of India dated 12th
\nOctober 2020 at Annexure : I to this writ application (page : 108).
\nHowever, there is no response in this regard at the end of the respondent
\nNo.1 till this date.
\n8 In such circumstances referred to above, Mr. Soparkar prays that
\nthere being merit in this writ application, the same may be considered
\naccordingly.
\n9 On the other hand, this writ application has been vehemently
\nopposed by Mr. Varun Patel, the learned Senior Standing Counsel
\nappearing for the respondents Nos.2 and 3 respectively. Mr. Patel
\npointed out that so far as ITR \u2013 1 and ITR \u2013 4 is concerned, the time
\nlimit expires on 10th January 2021. The Tax Audit Reports are to be
\nsubmitted by 15th January 2021 and the returns are to be filed by 15th
\nFebruary 2021. He would submit that for the Assessment year 202021,
\nthe due date for filing the ITR and TAR under the Act has been extended
\nearlier considering the covid19
\npandemic as under:
\n[a] The due date for filing income tax returns for A.Y.202021
\nwas
\nextended vide the Taxation and Other Laws (Relaxation and
\nAmendment of Certain Provisions) Act, 2020 to 30th November
\n2020. Subsequently, vide notification S.O. 3906 (E) dated 29th
\nOct, 2020, the due dates were further extended to 31st Jan. 2021
\nfor cases in which tax audit report under section 44AB is required
\nto be filed and 31st Dec. 2020 for others.
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\n[b] Since as per Section 44AB due date for filing tax audit report
\nis one month prior to the due date for return, the due date for
\nfiling of tax audit report was also extended to 31st Oct. 2020 vide
\nTaxation and Other Laws (Relaxation and Amendment of Certain
\nProvisions) Act, 2020 and extended further to 31st Dec. 2020 vide
\nnotification S.O. 3906(E) dated 20th Oct. 2020.
\n[c] Subsequently vide notification S.O. 4805(E), the due dates
\nwere further extended to 15th February, 2021 for cases in which
\ntax audit report under Section 44AB is required to be filed and
\n10th January, 201 for others.
\n10 Mr. Patel would submit that based on Notified Forms, the software
\nfor preparation of ITRs have been prepared and the date of release of 1st
\nversion of ITR utilities in efiling
\nportal is as per table below. Due to
\nchanges in Notified Form or Press releases the ITR preparation software
\nhave been modified \/ are being modified:
\nITR utility Date of release of ITR utility in efiling
\nportal
\nITR1
\n’02June2020
\nITR2
\n’26June2020
\nITR3
\n’31July2020
\nITR4
\n’05June2020
\nITR5
\n’25Aug2020
\nITR6
\n’22Sept2020
\nITR7
\n’03Sept2020
\n11 Mr. Patel would further submit that ITRs 1 and 4 meant for
\nsalaried tax payers and business reporting income on presumptive basis,
\nconstitute 81% of all ITRs filed, and were available for filing within 1
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\nweek of Notification of the forms by CBDT. Til 28th Dec 4.37 Cr. ITRs
\nhad been filed for only AY 202021
\nas compared to 4.51 Cr for only AY
\n201920
\nas on 28th Aug 2019.
\n12 Mr. Patel would also submit that utility for filing TAR \u2013 Form
\nNo.3CA3CD
\n& 3CB3CD
\nfor A.Y. 202021,
\nincorporating amendments as
\nper notification dated 01Oct2020
\nwas released in efiling
\nportal on22Oct2020.
\nThe utility before the date of notification for amendment of
\nForm was already available in efiling
\nportal which would be used for
\nfiling the Form No.3CA3CD
\n& 3CB3CD
\nA.Y. 2020221
\ntill Oct. 1st Form
\nNo.3CEB for A.Y. 202021,
\nincorporating amendments as per notification
\ndated 01Oct2020
\nwas released in efiling
\nportal on 28Oct2020.
\nThe
\nutility before the date of notification for amendment of Form was
\nalready available in efiling
\nportal which could be used for filing the
\nForm No.3CEB for A.Y. 202021
\ntill Oct. 1st. Therefore, except for the
\ngap from Oct 1st to Oct 21st necessitated to incorporate changes as per
\nnotification dated 01Oct2020
\nin the software\/portal CAS\/Tax payers
\ncould submit their Tax Audit Reports at all other dates. It is submitted
\nthat till 28th Dec 2020, 1,51,855 FORM 3CA and 13,63,277 FORM 3CB
\nunder Section 44AB have been filed.
\n13 Mr. Patel would further submit that the changes incorporated in
\nthe various forms and utilities during an assessment year are to give
\neffect to the relevant Finance Act which comes into effect at the start of
\nthe said assessment year. Further, apart from the above, any changes to
\nthe forms and utilities, if made, are only to bring about simplification of
\nprocedure, clarify in understanding and ease of compliance of the tax
\npayers.
\n14 Mr. Patel would submit that the Government has been proactive in
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\nanalyzing the situation and providing relief to assessee. However, it
\nshould also be appreciated that filing of tax returns\/audit reports are
\nessential part of the compliance obligations of assessee and cannot be
\ndelayed indefinitely. Many functions of the Incometax
\nDepartment start
\nonly after the filing of the returns by the assessee. Filing of tax returns
\nby assessee also results in collections of taxes either through payment of
\nselfassessment
\ntax by the asessee or by the subsequent collection by the
\ndepartment post processing or assessment of the tax returns. The tax
\ncollections assume increased significance in these difficult times and
\nGovernment of India needs revenue to carry out relief work for poor and
\nother responsibilities. Any delay in filing returns affects collection of
\ntaxes and hence providing relief to poor. It may also be noted that
\nsufficient time has already been given to taxpayers to file their tax
\nreturns and a large number of taxpayers have already filed their returns
\nof income.
\n15 In the last, Mr. Patel pointed out that the last extension for filing
\nthe ITRs and TARs has been given by press release dated 30th December
\n2020. The Government Notification dated 31st December 2020 has also
\nbeen issued with respect to the extension for fling the ITRs and TARs.
\n16 Mr. Patel pointed out that having regard to the same, the Bombay
\nHigh Court thought fit not to entertain an identical petition and the
\nsame came to be rejected vide order dated 31st December 2020. Mr.
\nPatel invited out attention to page : 138 of the paper book on which the
\norder passed by the Bombay High Court has been annexed.
\n17 In such circumstances referred to above, Mr. Patel prays that there
\nbeing no merit in this writ application, the same may be rejected.
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\n18 Having heard the learned counsel appearing for the parties and
\nhaving gone through the materials on record, we intend to keep this writ
\napplication pending and pass an interim order in the larger interest of
\njustice.
\n19 In All Gujarat Federation of Tax Consultants (supra), a
\nCoordinate Bench of this High Court had the occasion to consider
\nidentical situation. We quote few relevant observations made in the said
\njudgement:
\n\u201c38. We do not have very clear details as to what was the period made
\navailable for the receipt of the suggestion and consultation from the
\nstakeholders and what was the extra time consumed by the Law Ministry
\nfor the purpose of vetting. However, without going into these details, when
\nit could be noted that this change of utility and nonavailability
\nof the new
\nversion till 20th August, 2014 is the cause for the issue to have cropped up,
\nthe assesses cannot be put to the hardship nor can the professionals be
\nmade to rush only because the department chose to change the utility
\nduring the midyear.
\n51.1 It would be apt to reproduce the relevant paragraphs of the judgment
\nof this Court rendered in the case of Vaghjibhai S. Bishnoi v. Income
\nTax Officer and another reported in [2013] 36 taxmann.com 371
\n(Gujarat), at this stage.
\n14….On the contrary, we are of the firm opinion that
\ncomputerization in every Department is objected with a view to
\nfacilitate easy access to the assessee and make the system more
\nviable and transparent. In the event of any shortcoming of software
\nprogramme or any genuine mistake, the Department is expected to
\nrespond to such inadvertence spontaneously by rectifying the
\nmistake and give corresponding relief to the assessee. Instead of
\nthat, even when it is being brought to the notice of the Department
\nby the assessee, by a rectification application and subsequent
\ncommunication, not only it has chosen not to rectify the mistake,
\nbut, the lack of inter departmental coordination has driven the
\nassessee to this Court for getting his legitimate due. This attitude
\nfor sure does not find favour with the Court, as more responsive
\nand litigant centric system is expected; particularly in the era of
\ncomputerization. Tax payers friendly regime is promised in this
\nelectronic age. For want of necessary coordination between the two
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\ndepartments, the assessee cannot be expected to be sent from pillar
\nto the post.
\n14.1 Thus, from the discussion above, it can be very well said that
\nthe respondent no. 2 has failed to perform its duty as provided
\nunder section 154 of the Act. When a glaring mistake was pointed
\nout to the authority, it ought to have amended the order of
\nassessment by exercising powers under section 154 of the Act, which
\nin the present case, the authority failed to exercise and
\nconsequently, the petitioner was compelled to approach this Court
\nby way of the present petition.
\nWe could not resist ourselves from taking note of details provided in
\nthe official website of Incometax
\nDepartment which reveals the
\nextension of computerization in the department so far and their
\nvision for the same in this field. With a view to improve the
\nefficiency and effectiveness of Direct Taxes administration and to
\ncreate a database on its various aspects, a Comprehensive
\nComputerization programme was approved by the Government in
\nOctober 1993. In accordance with the programme, computerization
\nwas taken up on a threetier
\nsystem. In the apex level, a National
\nComputer Centre [NCC] having large computers to maintain data
\nbase and to execute processing work of a global nature was
\nenvisaged. At the second level, 36 Regional Computer Centres
\n[RCCs] were to be established across the country equipped with
\nlarge computers to maintain regional databases and to cater to
\nregional processing needs. All the RCCs were to be connected to the
\nNational Computerization Centre through high speed data
\ncommunication lines. At the third level, computers were to be
\ninstalled in the rooms of all the Assessing Officers and connected
\nwith the respective Regional Computer Center for data\/information
\nexchange, in a phased manner. Accordingly, in the first phase,
\nDelhi, Mumbai and Chennai City regions were taken up and
\nprovided with state of art hardware and software connected with
\nRCC, through intercity
\nand intracity
\nlinkages. After stabilizing of
\nthe computer systems in the 3 RCCs, computerization of 33 other
\ncentres covering the rest of the country was taken up in the second
\nphase.
\nThe Director General of Income Tax [Systems], {DIT [S]}, New Delhi was
\nmade the main nodal authority for overall planning and implementation
\nof the computerization programme; including procurement of hardware
\nand software and development\/installation of application software. In
\naddition, at each RCC, the Chief Commissioner of Income Tax [CCIT] was
\nrequired to monitor and coordinate
\nwith the DIT [S]. He would be
\nassisted by CIT [Computer Operations] who would monitor the
\nfunctioning of the RCC.
\nThe main objectives of the computerization programme, as approved by
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\nthe Committee on NonPlan
\nExpenditure [CNE], were (a) to improve the
\nefficiency and effectiveness of tax administration; (b) to ensure timely
\navailability and utilization of information; (c) to reduce compliance
\nburden on honest tax payers; (d) to enhance equitable treatment of tax
\npayers of incometax
\nand procedures; (e) to ensure better enforcement of
\ntax laws; (f) to provide management with reliable and accurate
\ninformation in time so as to assist them in tax planning and legislation
\nand also in decision making; (g) to broaden th tax base; and (h) to keep
\nthe cost of administration at an acceptable level over a period of time.
\n15.1 Thus, computerization of the Income Tax Department when
\nhas undergone the exercise of a comprehensive business process reengineering,
\nit is expected that Departments wish to herald Tax
\npayers friendly regime becomes the reality. A paradigm shift is
\nprogrammed as tax payers population has been growing
\nexponentially, ushering all the imperative changes and
\nmodernization of administration.
\n15.2 If the Centralized Processing Center meant for return
\nprocessing, accounts, refund, storage of data etc. adds to the
\ndifficulties of the Tax payers, due to lack of distribution of work
\nbetween back office and front office, and that too, after having been
\npointed out the actual error, a serious relook
\nis expected.
\n55. While examining the CBDT’s powers exercisable under section 119 of
\nthe Act, of course, in some other context, the Apex Court has held and
\nobserved thus:
\n9. What is the status of these circulars? Section 119(1) of the
\nIncometax
\nAct, 1961 provides that, “The Central Board of Direct
\nTaxes may, from time to time, issue such orders, instructions and
\ndirections to other Incometax
\nauthorities as it may deem fit for the
\nproper administration of this Act and such authorities and all other
\npersons employed in the execution of this Act shall observe and
\nfollow such orders, instructions and directions of the Board.
\nProvided that no such orders, instructions or directions shall be
\nissued (a) so as to require any Incometax
\nauthority to make a
\nparticular assessment or to dispose of a particular case in a
\nparticular manner: or (b) so as to interfere with the discretion of
\nthe Appellate Assistant Commissioner in the exercise of his
\nappellate functions.” Under subsection
\n(2) of Section 119 without
\nprejudice to the generality of the Board’s power set out in subsection
\n(1) a specific power is given to the Board for the purpose of
\nproper and efficient management of the work of assessment and
\ncollection of revenue to issue from time to time general or special
\norders in respect of any class of incomes or class of cases setting
\nforth directions or instructions, not being prejudicial to assesses, as
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\nC\/SCA\/13653\/2020 JUDGMENT
\nthe guidelines, principles or procedures to be followed in the work
\nrelating to assessment. Such instructions may be by way of
\nrelaxation of any of the provisions of the sections specified there or
\notherwise. The Board thus has power, inter alia, to tone down the
\nrigour of the law and ensure a fair enforcement of its provisions, by
\nissuing circulars in exercise of its statutory powers under Section
\n119 of the Incometax
\nAct which are binding on the authorities in
\nthe administration of the Act. Under Section 119(2)(a) however,
\nthe circulars as contemplated therein cannot be adverse to the
\nassessee. Thus, the authority which wields the power for its own
\nadvantage under the Act is given the right to forego the advantage
\nwhen required to wield it in a manner it considers just by relaxing
\nthe rigour of the law or in other permissible manners as laid down
\nin Section 119. The power is given for the purpose of just, proper
\nand efficient management of the work of assessment and in public
\ninterest. It is a beneficial power given to the Board for proper
\nadministration of fiscal law so that undue hardship may not be
\ncaused to the assessee and the fiscal laws may be correctly applied.
\nHard cases which can be properly categorised as belonging to a
\nclass, can thus be given the benefit of relaxation of law by issuing
\ncirculars binding on the taxing authorities.
\n55.1 Thus as held by the Apex Court the powers given to the Board are
\nbeneficial in nature to be exercised for proper administration of fiscal law
\nso that undue hardship may not be caused to the taxpayers. The purpose is
\nof just, proper and efficient management of the work of assessment and the
\npublic interest.
\n56. Not that the Revenue is not alive to the vital importance of TAR in
\nfiling the ITR and the possible complications and genuine hardship that
\nmay arise in future in all those tax returns filed without the aid of TAR,
\nhowever, noncollection
\nof the tax for a period of two months and possible
\nloss of Rs.220 crore in terms of interest for a period of two months in the
\nevent the selfassessed
\ntax not paid, appear clearly as the reasons in the
\nfoundation for CBDT to deny such extension. For the purpose of filing ITR
\nand furnishing TAR difference in due date possibly may lead many assesses
\nnot to file the ITR without the aid of the TAR and thereby the angle of
\ngaining the interest under the provision of law for such late filing of the
\nreturns would not have been missed by the Revenue. The Revenue can
\nsurely safeguard the interest of both the collection of tax, as also of
\npossible loss of interest on the tax collected, the Revenue cannot be
\npermitted to take advantage of its own error or delay, by putting forth
\nmagnified figures of loss and thereby also possibly in the process gaining
\ninterest for late filing of return in complete disregard to requirement of
\nefficient management.
\n58. Consequences that would follow on account of the delay in filing the
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\nreturn of income also are weighing factors for the Court to consider such
\nrequest. Being conscious of the fact that the writ of mandamus, which is
\nhighly prerogative writ is for the purpose of compelling the authorities of
\nany official duties, officially charged by the law either refuses or fails to
\nperform the same, the writ of mandamus is required to be used for the
\npublic purpose,particularly, when the party has not other remedy
\navailable. It is essentially designed to promote justice.
\n59. The Apex Court in the case of Secretary, Cannanore District Muslim
\nEducational Association, Karimbam v. State of Kerala and others,
\nreported in (2010) 6 SCC 373, while emphasizing the importance of
\nwrit of mandamus and its applicability held and observed thus :
\n29. While dismissing the writ petition the Hon’ble High Court with
\nrespect, had taken a rather restricted view of the writ of
\nMandamus. The writ of Mandamus was originally a common law
\nremedy, based on Royal Authority. In England, the writ is widely
\nused in public law to prevent failure of justice in a wide variety of
\ncases. In England this writ was and still remains a prerogative writ.
\nIn America it is a writ of right. (Law of Mandamus by S.S. Merrill,
\nChicago, T.H. Flood and Company, 1892, para 62, page 71).
\n30.About this writ, SA de Smith in ‘Judicial Review of Administrative
\nAction’, 2nd edn., pp 378 and 379 said that this writ was devised
\nto prevent disorder from a failure of justice and defect of police and
\nwas used to compel the performance of a specific duty. About this
\nwrit in 1762 Lord Mansfield observed that ‘within the past century
\nit had been liberally interposed for the benefit of the subject and
\nadvancement of justice’.
\n31.The exact observations of Lord Mansfield about this writ has been
\nquoted in Wade’s ‘Administrative Law, Tenth Edition’ and those
\nobservations are still relevant in understanding the scope of
\nMandamus. Those observations are quoted below :”
\nIt was introduced, to prevent disorder from a failure of justice, and
\ndefect of police. Therefore it ought to be used upon all occasions
\nwhere the law has established no specific remedy, and where in
\njustice and good Government there ought to be one…..The value of
\nthe matter, or the degree of its importance to the public police, is
\nnot scrupulously weighed. If there be a right, and no other specific
\nremedy, this should not be denied. Writs of mandamus have been
\ngranted, to admit lecturers, clerks, sextons, and scavengers and c.,
\nto restore an alderman to precedency, an attorney to practice in an
\ninferior court, and c.” (H.W.R. Wade and C.F. Forsyth:
\nAdministrative Law, 10th Edition, page 52223).
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\n32. De Smith in Judicial Review, Sixth Edition has also
\nacknowledged the contribution of Lord Mansfield which led to the
\ndevelopment of law on Writ of Mandamus. The speech of Lord
\nMansfield in R v. Blooer, (1760) 2 Burr, runs as under :
\n“a prerogative writ flowing from the King himself, sitting in
\nhis court, superintending the police and preserving the peace
\nof this country”. (See De Smith’s Judicial Review 6th
\nEdition, Sweet and Maxwell page 795 para 15036.
\n33. Almost a century ago, Darling J quoted the observations in Rex
\nv. The Justices of Denbighshire, (1803) 4 East, 142, in The King v.
\nThe Revising Barrister etc. {(1912) 3 King’s Bench 518} which
\nexplains the wide sweep of Mandamus. The relevant observations
\nare :
\n“…Instead of being astute to discover reasons for not
\napplying this great constitutional remedy for error and
\nmisgovernment, we think it our duty to be vigilant to apply
\nit in every case to which, by any reasonable construction, it
\ncan be made applicable….”
\n34. At KB page 531 of the report, Channell, J said about
\nMandamus :
\n“It is most useful jurisdiction which enables this Court to set
\nfight mistakes”.
\n35. In Dwarka Nath v. Income Tax Officer, Special Circle, D. Ward,
\nKanpur and another AIR
\n1966 SC 81, a threeJudge
\nBench of this
\nCourt commenting on the High Court’s jurisdiction under Article
\n226 opined that this Article is deliberately couched in
\ncomprehensive language so that it confers wide power on High
\nCourt to ‘reach injustice whenever it is found’. Delivering the
\njudgment Justice Subba Rao (as His Lordship then was) held that
\nthe Constitution designedly used such wide language in describing
\nthe nature of the power. The learned Judge further held that the
\nHigh Court can issue writs in the nature of prerogative writs as
\nunderstood in England; but the learned Judge added that the scope
\nof these writs in India has been widened by the use of the
\nexpression “nature”.
\n36. The learned Judge made it very clear that the said expression
\ndoes not equate the writs that can be issued in India with those in
\nEngland but only draws an analogy from them. The learned Judge
\nthen clarifies the entire position as follows :
\n“4. …It enables the High Courts to mould the reliefs to meet
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\nthe peculiar and complicated requirements of this country.
\nAny attempt to equate the scope of the power of the High
\nCourt under Article 226 of the Constitution with that of the
\nEnglish Courts to issue prerogative writs is to introduce the
\nunnecessary procedural restrictions grown over the years in
\na comparatively small country like England with a unitary
\nform of Government to a vast country like India functioning
\nunder a federal structure. Such a construction defeats the
\npurpose of the article itself….”
\n37. The same view was also expressed subsequently by this Court in
\nJ.R. Raghupathy etc. v. State of A.P. and Ors. AIR
\n1988 SC 1681.
\nSpeaking for the Bench, Justice A.P. Sen, after an exhaustive
\nanalysis of the trend of Administrative Law in England, gave His
\nLordship’s opinion in paragraph (29) at page 1697 thus:
\n“30. Much of the above discussion is of little or academic
\ninterest as the jurisdiction of the High Court to grant an
\nappropriate writ, direction or order under Article 226 of the
\nConstitution is not subject to the archaic constraints on
\nwhich prerogative writs were issued in England. Most of the
\ncases in which the English courts had earlier enunciated
\ntheir limited power to pass on the legality of the exercise of
\nthe prerogative were decided at a time when the Courts took
\na generally rather circumscribed view of their ability to
\nreview Ministerial statutory discretion. The decision of the
\nHouse of Lords in Padfield’s case (1968 AC 997) marks the
\nemergence of the interventionist judicial attitude that has
\ncharacterized many recent judgments.”
\n38. In the Constitution Bench judgment of this Court in Life
\nInsurance Corporation of India v. Escorts Limited and others,
\n[(1986) 1 SCC 264] : (AIR 1986 SC 1370), this Court expressed
\nthe same opinion that in Constitution and Administrative Law, law
\nin India forged ahead of the law in England (para 101, page 344).
\n39. This Court has also taken a very broad view of the writ of
\nMandamus in several decisions. In the case of The Comptroller and
\nAuditor General of India, Gian Prakash, New Delhi and another v.
\nK.S. Jagannathan and another (
\nAIR 1987 SC 537), a threeJudge
\nBench of this Court referred to Halsbury’s Laws of England, Fourth
\nEdition, Volume I paragraph 89 to illustrate the range of this
\nremedy and quoted with approval the following passage from
\nHalsbury about the efficacy of Mandamus :
\n“89. Nature of Mandamus:…
\nis to remedy defects of justice
\nand accordingly it will issue, to the end that justice may be
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\ndone, in all cases where there is a specific legal right and no
\nspecific legal remedy for enforcing that right, and it may
\nissue in cases where, although there is an alternative legal
\nremedy yet that mode of redress is less convenient beneficial
\nand effectual.” (See para 19, page 546 of the report)
\nIn paragraph 20, in the same page of the report, this Court further
\nheld :
\n“20. …and in a proper case, in order to prevent injustice
\nresulting to the concerned parties, the Court may itself pass
\nan order or give directions which the Government or the
\npublic authority should have passed or given had it properly
\nand lawfully exercised its discretion.”
\n40.In a subsequent judgment also in Shri Anadi Mukta
\nSadguru Shree Muktajee Vandasjiswami Suvarna Jayanti
\nMahotsav Smarak Trust and Ors. v. V.R. Rudani and Ors. AIR
\n1989 SC 1607, this Court examined the development of
\nthe law of Mandamus and held as under :
\n“22. …mandamus cannot be denied on the ground that the
\nduty to be enforced is not imposed by the statute.
\nCommenting on the development of this law, Professor De
\nSmith states: “To be enforceable by mandamus a public duty
\ndoes not necessarily have to be one imposed by statute. It
\nmay be sufficient for the duty to have been imposed by
\ncharter common law, custom or even contract.” (Judicial
\nReview of Administrative Act 4th Ed. P. 540). We share this
\nview. The judicial control over the fast expanding maze of
\nbodies affecting the rights of the people should not be put
\ninto watertight
\ncompartment. It should remain flexible to
\nmeet the requirements of variable circumstances. Mandamus
\nis a very wide remedy which must be easily available ‘to
\nreach injustice wherever it is found’. Technicalities should
\nnot come in the way of granting that relief under Article
\n226. We, therefore, reject the contention urged for the
\nappellants on the maintainability of the writ petition.” (See
\npage 1613 para 21).
\n60. Keeping in mind the scope of writ jurisdiction as detailed in the
\ndecision hereinabove, these petitions deserve consideration. In absence of
\nany remedy available, much less effective to the stakeholders against the
\nnonuse
\nof beneficial powers by the Board for the larger cause of justice,
\nexercise of writ jurisdiction to meet the requirements of circumstances has
\nbecome inevitable.
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\n61. Here, we notice that subsequent to the representation made on 21st
\nAugust, 2014, the CBDT could have responded to such representation by
\neither acceding or refusing to the request of extending the period of filing
\nof ITR and making it extendable upto 30th November, 2014. Ordinarily, in
\nsuch circumstances, the Court would direct the authority to consider the
\nrepresentation and pass a specific order. In wake of the constrains of time,
\nas the due date of the filing of the return is expiring on 30th September,
\n2014 and when the respondent Board has chose not to respond to the
\nsame, but, later on by offering the comments before this Court in writing
\nin no uncertain terms, it has termed such a request impermissible and has
\nchosen to refuse the same on the ground that all the grievance made by the
\npetitioners are not sustainable. Therefore, considering the larger cause of
\npublic good and keeping in mind the requirement of promotion of justice,
\nwe chose to exercise the writ of mandamus directing the CBDT to extend
\nthe date of filing of return of income to 30th November, 2014, which is due
\ndate for filing of the TAR, as provided in the Notification dated 20th
\nAugust, 2014.
\n64. We are not inclined to stay new utility for one year as sufficient
\nmeasures are already taken by the Board to redress this grievance.
\nHowever, it needs to be observed at this juncture that any introduction or
\nnew utility\/software with additional requirement in the middle of the year
\nordinarily is not desirable. Any change unless inevitable can be planned
\nwell in advance, keeping in focus that such comprehensive process reengineering
\nmay not result in undue hardship to the stakeholders for
\nwhose benefit the same operates.
\n76. Besides, no grave prejudice would be caused to the revenue if the
\ndue date for filing the return of income is also extended till the date of
\nfiling of the tax audit report, whereas the assessee would be visited with
\nserious consequences as referred to hereinabove in case of nonfiling
\nof
\nreturn of income within the prescribed period as he would not be in a
\nposition to claim the benefit of the provisions referred to hereinabove.
\nThe apprehension voiced by the revenue that in case due date for filing
\nreturn of income is extended, due date for selfassessment
\nalso gets
\nautomatic extension, resulting into delay in collection of selfassessment
\ntax which is otherwise payable in September, 2014, can be taken care of
\nby providing that the due date shall stand extended for all purposes,
\nexcept for the purposes of Explanation 1 to section 234A of the Act.\u201d
\n20 In the second judgement, in the case of All Gujarat Federation of
\nTax Consultants (supra), this Court observed as under:
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\n\u201c11.1 The controversy involved in the present case lies in a very narrow
\ncompass. The petitioners and other assessees covered under the categories
\nto which the petition relates, are ordinarily required to file their returns of
\nincome any time from 1st April till 30th September of the relevant
\nassessment year. By virtue of rule 12 of the rules, all the assessees have to
\nfile the income tax returns electronically, that is, online. For this purpose,
\nthe corresponding utility relating to each category of assessees in the
\nnature of Forms No.ITR3,
\nITR4,
\nITR5,
\nITR6
\nand ITR7
\nare required to
\nbe provided by the respondents. It is an admitted position that in the year
\nunder consideration, the relevant utility has been provided only with effect
\nfrom 7th August, 2015. Therefore, prior to 7th August, 2015, it was not
\npossible for any of the assessees who were required to file income tax
\nreturns in the above referred forms, to file their returns of income.
\nTherefore, while in the ordinary course, the assessees falling in the above
\ncategories have a period of 180 days to compile relevant details and to file
\nthe income tax returns by 30th September, in view of the fact that the
\nutility for filing the income tax returns has been furnished only on 7th
\nAugust, 2015, such period stands substantially curtailed. Having regard to
\nthe difficulties faced by the Chartered Accountants and other professionals
\nas well as the assessees, the petitioners made representations to the
\nrespondent Board for exercising powers under section 119 of the Act and
\nextending the due date for filing the income tax returns prescribed under
\nExplanation 2 to section 139 of the Act. However, by the announcement
\ndated 9th September, 2015, such request has been turned down and it has
\nbeen stated that the last date for filing of returns being 30th September,
\n2015 will not be extended. As noticed hereinabove, in case of other
\ncategories of assessees who are required to file tax returns in Form ITR1,
\nITR2,
\nITR2A,
\nITR4S,
\nin whose case also, there was a delay in furnishing
\nthe necessary utility, the Board had extended the due date for filing the
\nincome tax returns. The stand of the Board is that the period of seven
\nweeks which is available to the petitioner and other assessees for filing
\nonline income tax returns, is sufficient and therefore, there is no reason for
\nextending the due date for filing the income tax returns.
\n12 While it is true that the powers under section 119 of the Act are
\ndiscretionary in nature and it is for the Board to exercise such powers as
\nand when it deems fit. However, it is equally true that merely because such
\npowers are discretionary, the Board cannot decline to exercise such powers
\neven when the conditions for exercise of such powers are shown to exist. At
\nthis juncture reference may be made to the decision of the Supreme Court
\nin the case of UCO Bank v. CIT, (1999) 4 SCC 599?\/I> (1999) 237 ITR
\n889, wherein the court had occasion to interpret section 119 of the Act.
\nThe court held thus:
\n9. What is the status of these circulars? Section 119(1) of the
\nIncome Tax Act, 1961 provides that:
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\n119. (1) The Central Board of Direct Taxes may, from time to time,
\nissue such orders, instructions and directions to other Income Tax
\nAuthorities as it may deem fit for the proper administration of this
\nAct, and such authorities and all other persons employed in the
\nexecution of this Act shall observe and follow such orders,
\ninstructions and directions of the Board:
\nProvided that no such orders, instructions or directions shall be
\nissued
\n(a) so as to require any Income Tax Authority to make a particular
\nassessment or to dispose of a particular case in a particular
\nmanner; or
\n(b) so as to interfere with the discretion of the Appellate Assistant
\nCommissioner in the exercise of his appellate functions.
\n(emphasis supplied)
\nUnder subsection
\n(2) of Section 119, without prejudice to the
\ngenerality of the Boards power set out in subsection
\n(1), a specific
\npower is given to the Board for the purpose of proper and efficient
\nmanagement of the work of assessment and collection of revenue to
\nissue from time to time general or special orders in respect of any
\nclass of incomes or class of cases setting forth directions or
\ninstructions, not being prejudicial to assessees, as the guidelines,
\nprinciples or procedures to be followed in the work relating to
\nassessment. Such instructions may be by way of relaxation of any
\nof the provisions of the sections specified there or otherwise. The
\nBoard thus has power, inter alia, to tone down the rigour of the
\nlaw and ensure a fair enforcement of its provisions, by issuing
\ncirculars in exercise of its statutory powers under Section 119 of the
\nIncome Tax Act which are binding on the authorities in the
\nadministration of the Act. Under Section 119(2)(a), however, the
\ncirculars as contemplated therein cannot be adverse to the assessee.
\nThus, the authority which wields the power for its own advantage
\nunder the Act is given the right to forego the advantage when
\nrequired to wield it in a manner it considers just by relaxing the
\nrigour of the law or in other permissible manner as laid down in
\nSection 119. The power is given for the purpose of just, proper and
\nefficient management of the work of assessment and in public
\ninterest. It is a beneficial power given to the Board for proper
\nadministration of fiscal law so that undue hardship may not be
\ncaused to the assessee and the fiscal laws may be correctly applied.
\nHard cases which can be properly categorised as belonging to a
\nclass, can thus be given the benefit of relaxation of law by issuing
\ncirculars binding on the taxing authorities.
\n13 Thus, the power under section 119 of the Act is a beneficial power
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\ngiven to Board for proper administration of fiscal law so that undue
\nhardship may not be caused to the assessee and the fiscal laws may be
\ncorrectly applied. In the case at hand, as is evident from the facts noted
\nhereinabove, in the normal course, assessees who are subject to audit as
\nwell as other categories of assessees referred to hereinabove, can file their
\nreturns of income from 1st April to 30th September of the year in question.
\nIn view of the provisions of rule 12 of the rules, whereby, the assessees who
\nare subject to tax audit, as well as the assessees referred to hereinabove,
\nare required to file the tax returns electronically, that is, online. However,
\nfor filing the tax returns, appropriate utility is required to be made
\navailable by the respondents to the assessees. Therefore, till such utility is
\nprovided by the respondents, it is not possible for the assessees to file their
\nreturns of income. Therefore, there is a duty cast upon the respondents to
\nensure that necessary utility for efiling
\nof the income tax returns is made
\navailable to various categories of assessees at the beginning of the
\nassessment year so that the assessees can plan their tax matters
\naccordingly. However, as noted hereinabove, the utilities for efiling
\nof
\nreturns have been made available only with effect from 7th August, 2015,
\nthereby curtailing the time available for filing the income tax returns to a
\ngreat extent. According to the petitioners, such curtailment of time causes
\nimmense hardship and prejudice to the petitioners and other assessees
\nbelonging to the above categories, whereas the respondent Board, on the
\nother hand, has taken an adamant stand not to extend the time for efiling
\nof the returns despite the fact that the entire situation has arisen on
\naccount of default on the part of the Department and not the assessees.
\n14 It may be recalled that in relation to assessment year 201415,
\nthe
\nrespondent Board had extended the time for filing the tax audit reports,
\nbut had not extended the time for filing the returns and the petitioners
\nwere constrained to approach this court for extension of the due date for
\nfiling return of income. In that case, this court has, inter alia, observed
\nthus :
\n50. We are also actuated by the fact that the entire situation is
\narising not on account of any contribution on the part of either the
\nprofessionals or the assesses leading to such a situation. In the
\npresent case, with the advancement of the technology, it is always
\ncommendable that the department takes recourse to the technology
\nmore and more. With the possible defects having been found in
\nutility software in use in the previous year, the required changes in
\nthe clarification or the new format of such utility, if brought to the
\nfore, the same would be desirable. At the same time, the complete
\nblack out for nearly a months time would not allow accessibility to
\nsuch utility software to the assessees, which has put them to a great
\njeopardy.
\n53. The CBDT derives its powers under the statute which enjoins
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\nupon the Board to issue from time to time such orders, instructions
\nand directions to other incometax
\nauthorities if found expedient
\nand necessary for proper administration of the Act. Without
\nprejudice to the generality of powers provided under subsection
\n(1)
\nof section 119 of the Act, the CBDT also has specific powers to pass
\ngeneral or special orders in respect of any class or class of cases by
\nway of relaxation of any of the provisions of section, which also
\nincludes section 139 of the Act. If the Board is of the opinion that it
\nis necessary in the public interest to so do it. For avoiding the
\ngenuine hardship in any case or class of cases, the CBDT if
\nconsiders desirable and expedient, by general or special order, it
\ncan issue such orders, instructions and directions for proper
\nadministration of this Act. All such authorities engaged in
\nexecution of the Act are expected to follow the same. Any
\nrequirement contained in any of the provisions of Chapter IV or
\nChapter VIA also can be relaxed by the CBDT for avoiding genuine
\nhardship in any case or class of cases by general or special orders.
\nThis provision, therefore, gives very wide powers to the CBDT to
\npass general or special orders whenever it deems it necessary or
\nexpedient to so do it in respect of any class of income or class of
\ncases. It has not only to see the public interest for so doing, but also
\nfor avoiding the genuine hardship in any particular case or class of
\ncases, such powers can be exercised.
\n54. Reverting to the matters on hand, a very peculiar situation has
\narisen portraying the genuine hardship to the assessee, as also to
\nthe tax consultants, by way of representations made to the Board,
\nit would have been desirable and expedient on the part of the CBDT
\nto have considered such request and exercise the powers by way of a
\nrelaxation. What all that has been sought is to make the due date
\nfor filing the tax return harmonious with the filing of the TAR and
\nwithout jeopardizing the issue of collection of tax, it was not
\nimpossible to exercise such powers of relaxation of provision
\nprescribing extension of the due date.
\n55.While examining the CBDT’s powers exercisable under section 119
\nof the Act, of course, in some other context, the Apex Court has held
\nand observed thus:
\n9. What is the status of these circulars? Section 119(1) of the
\nIncometax
\nAct, 1961 provides that, “The Central Board of Direct
\nTaxes may, from time to time, issue such orders, instructions and
\ndirections to other Incometax
\nauthorities as it may deem fit for the
\nproper administration of this Act and such authorities and all other
\npersons employed in the execution of this Act shall observe and
\nfollow such orders, instructions and directions of the Board.
\nProvided that no such orders, instructions or directions shall be
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\nissued (a) so as to require any Incometax
\nauthority to make a
\nparticular assessment or to dispose of a particular case in a
\nparticular manner: or (b) so as to interfere with the discretion of
\nthe Appellate Assistant Commissioner in the exercise of his
\nappellate functions.” Under subsection
\n(2) of Section 119 without
\nprejudice to the generality of the Board’s power set out in subsection
\n(1) a specific power is given to the Board for the purpose of
\nproper and efficient management of the work of assessment and
\ncollection of revenue to issue from time to time general or special
\norders in respect of any class of incomes or class of cases setting
\nforth directions or instructions, not being prejudicial to assesses, as
\nthe guidelines, principles or procedures to be followed in the work
\nrelating to assessment. Such instructions may be by way of
\nrelaxation of any of the provisions of the sections specified there or
\notherwise. The Board thus has power, inter alia, to tone down the
\nrigor of the law and ensure a fair enforcement of its provisions, by
\nissuing circulars in exercise of its statutory powers under Section
\n119 of the Incometax
\nAct which are binding on the authorities in
\nthe administration of the Act. Under Section 119(2)(a) however,
\nthe circulars as contemplated therein cannot be adverse to the
\nassessee. Thus, the authority which wields the power for its own
\nadvantage under the Act is given the right to forgo the advantage
\nwhen required to wield it in a manner it considers just by relaxing
\nthe rigour of the law or in other permissible manners as laid down
\nin Section 119. The power is given for the purpose of just, proper
\nand efficient management of the work of assessment and in public
\ninterest. It is a beneficial power given to the Board for proper
\nadministration of fiscal law so that undue hardship may not be
\ncaused to the assessee and the fiscal laws may be correctly applied.
\nHard cases which can be properly categorised as belonging to a
\nclass, can thus be given the benefit of relaxation of law by issuing
\ncirculars binding on the taxing authorities.
\n55.1 Thus as held by the Apex Court the powers given to the Board
\nare beneficial in nature to be exercised for proper administration of
\nfiscal law so that undue hardship may not be caused to the
\ntaxpayers. The purpose is of just, proper and efficient management
\nof the work of assessment and the public interest.
\n58. Consequences that would follow on account of the delay in
\nfiling the return of income also are weighing factors for the Court
\nto consider such request. Being conscious of the fact that the writ of
\nmandamus, which is highly prerogative writ is for the purpose of
\ncompelling the authorities of any official duties, officially charged
\nby the law either refuses or fails to perform the same, the writ of
\nmandamus is required to be used for the public purpose,
\nparticularly, when the party has not other remedy available. It is
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\nC\/SCA\/13653\/2020 JUDGMENT
\nessentially designed to promote justice.
\n60. Keeping in mind the scope of writ jurisdiction as detailed in the
\ndecision hereinabove, these petitions deserve consideration. In
\nabsence of any remedy available, much less effective to the
\nstakeholders against the nonuse
\nof beneficial powers by the Board
\nfor the larger cause of justice, exercise of writ jurisdiction to meet
\nthe requirements of circumstances has become inevitable.
\n62. Such extension needs to be granted with the qualification that
\nthe same may not result into noncharging
\nof interest under section
\n234A. Simply put, while extending the period of filing of the tax
\nreturn and granting benefit of such extension for all other
\nprovisions, interest charged under section 234A for late filing of
\nreturn would be still permitted to be levied, if the Board so choses
\nfor the period commencing from 1.10.2014 to the actual date of
\nfiling of the return of income. Those tax payers covered under these
\nprovisions if choose to pay the amount of tax on or before the 30th
\nSeptember, 2014, no interest in any case would be levied despite
\ntheir filing of return after the 30th September, 2014.
\n64. We are not inclined to stay new utility for one year as sufficient
\nmeasures are already taken by the Board to redress this grievance.
\nHowever, it needs to be observed at this juncture that any
\nintroduction or new utility\/software with additional requirement
\nin the middle of the year ordinarily is not desirable. Any change
\nunless inevitable can be planned well in advance, keeping in focus
\nthat such comprehensive process reengineering
\nmay not result in
\nundue hardship to the stakeholders for whose benefit the same
\noperates.
\n76. Besides, no grave prejudice would be caused to the revenue if
\nthe due date for filing the return of income is also extended till the
\ndate of filing of the tax audit report, whereas the assessee would be
\nvisited with serious consequences as referred to hereinabove in case
\nof nonfiling
\nof return of income within the prescribed period as he
\nwould not be in a position to claim the benefit of the provisions
\nreferred to hereinabove. The apprehension voiced by the revenue
\nthat in case due date for filing return of income is extended, due
\ndate for selfassessment
\nalso gets automatic extension, resulting
\ninto delay in collection of selfassessment
\ntax which is otherwise
\npayable in September, 2014, can be taken care of by providing that
\nthe due date shall stand extended for all purposes, except for the
\npurposes of Explanation 1 to section 234A of the Act.
\n15 It may be noted that despite the fervent hope expressed by the court
\nthat the respondents in future may plan any change well in advance, a
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\nsimilar situation has prevailed in the present year also and the utilities for
\nefiling
\nof income tax returns have been made available as late as on 7th
\nAugust, 2015, leaving the petitioners and other assessees with less than
\none third of the time that is otherwise available under the statute.
\n16 t may be noted that in the facts of the above case, there was a
\nblackout for a period of one month, whereas in the year under
\nconsideration, the utility was not made available till 7th August, 2015.
\nThus, it was not possible for any of the assessees who are required to file
\nreturns in Forms No.ITR3,
\nITR4,
\nITR5,
\nITR6
\nand ITR7,
\nto file income
\ntax returns before such date.
\n17 Another notable aspect of the matter is that as contended on behalf
\nof the petitioners, nonfiling
\nof returns before the due date would result
\ninto the assessees being deprived of their right to file the revised return or
\nclaiming loss, whereas insofar as the revenue is concerned, no hardship or
\nprejudice is likely to be caused, inasmuch as the interest of the revenue can
\nbe taken care of by providing that the due date shall stand extended for all
\npurposes, except for the purposes of Explanation 1 to section 234A of the
\nAct. Under the circumstances, when no prejudice is caused to the revenue
\nand the assessees are put to great hardship on account of the short period
\nwithin which the income tax returns are to be filed, it was expected of the
\nBoard to exercise the discretionary powers vested in it under section 119 of
\nthe Act to ameliorate the difficulties faced by the assessees on account of no
\ndefault on their part, at least to a certain extent, by extending the due date
\nfor filing the income tax returns for a reasonable time. In the opinion of
\nthis court, the Board should not create a situation whereby the assessees
\nare required to knock the doors of the court year after year, more so, when
\non account of the delay on the part of the respondents, it is the assessees
\nwho would have to face the consequences of not filing the returns in time.
\nThe contention that no prejudice is caused to the petitioners\/assessees,
\ntherefore, does not merit acceptance.
\n18 Unfortunately, however, despite the aforesaid position, the Board
\nhas declined to exercise the discretion vested in it under section 119 of the
\nAct to come to the rescue of the assessees and grant them some relief,
\nleaving the court with no option but to direct the Board to extend the due
\ndate for filing the income tax returns under section 139 of the Act from
\n30th September, 2015 to 31st October, 2015 so as to alleviate to a certain
\nextent, the hardships caused to the assessees on account of delay in
\nproviding the utilities.
\n19 Significantly, one of the factors which appears to have weighed
\nwith the Board while turning down the request for extension of the due
\ndate for filing returns is that as per the guidelines of ICAI, a practicing
\nChartered Accountant, as an individual or as a partner of a firm, can
\nconduct only upto sixty tax audits under section 44AB of the Act and
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\nC\/SCA\/13653\/2020 JUDGMENT
\ncorresponding number of tax returns are required to be filed, in respect of
\nwhich, the seven weeks available to them should be sufficient. In this
\nregard it may be germane to refer to rule 12 of the rules, which prescribes
\nthe different forms under which assessees belonging to various categories
\nenumerated thereunder are required to file their returns. Clause (c) of subrule
\n(1) of rule 12 prescribes Form No.ITR3
\nin case of a person being an
\nindividual or Hindu Undivided family who is a partner in a firm and
\nwhere income chargeable to incometax
\nunder the head Profits and gains
\nof business and profession does not include any income except the
\ncategories enumerated therein. Clause (d) of rule 12(1) prescribes Form
\nNo. ITR4
\nin the case of a person being an individual or a Hindu undivided
\nfamily or other than the individual or Hindu undivided family referred to
\nin clause (a) or (b) or (c) or (ca) deriving income from a proprietory
\nbusiness or profession. Clause (e) prescribes Form No. ITR5
\nin the case of
\na person not being an individual or a Hindu undivided family or a
\ncompany or a person to which clause (g) applies. Clause (f) prescribes
\nForm No. ITR6
\nin the case of a company not being a company to which
\nclause (g) applies and clause (g) prescribes Form No.ITR7
\nin the case of a
\nperson including a company whether or not registered under section 25 of
\nthe Companies Act, 1956 which is required file return under the relevant
\nsubsections
\nof section 139 of the Act mentioned thereunder. Not all the
\naforesaid classes of assessees are required to be audited under section 44AB
\nof the Act. Therefore, it is not just assessees who are subject to tax audit
\nunder section 44AB of the Act who are affected by the nonextension
\nof due
\ndate but assessees belonging to all the above categories who may not be
\nsubject to tax audit under section 44AB. The number of tax audits
\nconducted by a Chartered Accountant may be limited to 60, but the total
\nnumber of assessees that he deals with is not limited to 60, as a large
\nnumber of assessees may belong to the categories which are not subject to
\ntax audit under section 44AB of the Act.
\n20 The Board while not extending the due date for filing return was
\nalso of the view that due date should not be extended just for the benefit of
\nthose who have remained lax till now for no valid reason in discharging
\ntheir legal obligations. It may be noted that despite the fact that ordinarily
\nthe ITR Forms which should be prescribed and made available before the
\n1st of April of the assessment year, have in fact, been made available only
\non 7th August, 2015 and the assessees are given only seven weeks to file
\ntheir tax returns. Therefore, laxity, if any, evidently is on the part of the
\nauthority which is responsible for the delay in making the utility for EFiling
\nthe return being made available to the assessees. When the default
\nlies at the end of the respondents, some grace could have been shown by
\nthe Board instead of taking a stand that such a trend may not be
\nencouraged. Had it not been for the laxity on the part of the respondents
\nin providing the utilities, there would not have been any cause for the
\npetitioners to seek extension of the due date for filing tax returns.
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\n21 As regards the decision of the Delhi High Court on which reliance
\nhas been placed by the learned counsel for the petitioners, it may be noted
\nthat the learned Single Judge has observed that the claim of the petitioners
\nthat it is entitled to 180 days for filing the return of income is not
\nprescribed either in the statute or rules, whereas as noticed hereinabove,
\nthe scheme of the Act clearly indicates that ordinarily a period of 180 days
\nis available to an assessee who is required to file the income tax return by
\n30th September, 2015 and consequently, the time prescribed by the Act
\ngets curtailed on account of nonavailability
\nof the necessary utility for
\nfiling the return online. Besides, the Delhi High Court has not taken into
\nconsideration the factor that unless the utility is made available, the
\nassessees would not be aware of the details which they are required to
\nfurnish, inasmuch as, the delay in providing the utilities is on account of
\nthe changes made in the corresponding forms. It may also be pertinent to
\nnote that the court in paragraph 22 of the judgment has expressed the
\nview that there is some merit, if not legal then otherwise, in the grievance
\nof the petitioner. The court noticed that the counsel for the respondents
\nwas unable to give reasons for the forms etc. not being available at the
\nbeginning of the assessment year on 1st April of every year and the same
\nthereby causes inconvenience to the practitioners of the subject. The court
\nfurther observed that there is sufficient time available to the Government,
\nafter the Finance Act of the financial year, to finalise the forms and if no
\nchange is intended therein, to notify the same immediately. The court
\nfound no justification for delay beyond the assessment year in prescribing
\nthe said forms. Accordingly, while not granting relief to the petitioner for
\nthe current assessment year, the court directed the respondents to, with
\neffect from the next assessment year, at least ensure that the forms etc.
\nwhich are prescribed for the Audit Report and for filing the ITR are
\navailable as on 1st April of the assessment year unless there is a valid
\nreason therefor and which should be recorded in writing by the
\nrespondents themselves, without waiting for any representations to be
\nmade. The court further observed that the respondents, while doing so, to
\nalso take a decision whether owing thereto any extension of the due date is
\nrequired to be prescribed and accordingly notify the public.
\n22 As regards the decision of the Karnataka High Court, the court has
\nmerely relegated the petitioners therein to the CBDT for the consideration
\nof their representation and does not lay down any proposition of law. The
\nRajasthan High Court has expressed the view that the decision contained
\nin the announcement dated 9th September, 2015 being a policy decision,
\nthe court should not interfere. The court, therefore, has not considered the
\nnonexercise
\nof discretionary powers under section 119 of the Act on the
\npart of the Board despite the fact that the circumstances so warrant
\nexercise of discretion in favour of the assessee.
\n23 The Punjab and Haryana High Court in the case of Vishal Garg v.
\nUnion of India (supra) has, having regard to the totality of facts and
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\nC\/SCA\/13653\/2020 JUDGMENT
\ncircumstances of the case, considered it appropriate to extend the due date
\nfor efiling
\nof returns upto 31st October, 2015. Therefore, instead of
\nextending the due date to 30th November as prayed for in the petition,
\nwith a view to maintain consistency in the due date for efiling
\nof returns,
\nthis court is of the view that, the same date is required to be adopted.
\n24 The contention that once the Delhi High Court has taken a
\nparticular view, in relation to an all India statute, it is not permissible for
\nthis court to take a different view, does not merit acceptance in the light of
\nthe view taken by this court in N R Paper Board Limited v. Deputy
\nCommissioner of Income tax (supra). Besides, even if such contention were
\nto be accepted, there are conflicting decisions of different High Courts,
\ninasmuch as, the Punjab and Haryana High Court has taken a view
\ndifferent from the Delhi High Court and hence, it is permissible for the
\ncourt to adopt the view with which it agrees.
\n25 In the light of the above discussion, the petition partly succeeds and
\nis accordingly allowed to the following extent. The respondent Board is
\nhereby directed to forthwith issue requisite notification under section 119
\nof the Act extending the due date for efiling
\nof the income tax returns in
\nrelation to the assessees who are required to file return of income by 30th
\nSeptember, 2015 to 31st October, 2015. The respondents shall henceforth,
\nendeavour to ensure that the forms and utilities for efiling
\nof income tax
\nreturns are ordinarily made available on the 1st day of April of the
\nassessment year. Rule is made absolute to the aforesaid extent with no
\norder as to costs.\u201d
\n21 We are of the view that the respondent No.1 \u2013 Union of India,
\nMinistry of Finance should immediately look into the issue, more
\nparticularly, the representation dated 12th October 2020 at Annexure : I
\nof the paper book (page 108) and take an appropriate decision at the
\nearliest in accordance with law. We, accordingly, direct the respondent
\nNo.1 to do so. While taking an appropriate decision, the Union shall bear
\nin mind the observations made by this High Court in the two above
\nnoted judgements, more particularly, the observations of the Supreme
\nCourt in the case of Vaghjibhai S. Bishnoi (supra) that the powers
\ngiven to the CBDT are beneficial in nature to be exercised for proper
\nadministration of fiscal law so that undue hardship may not be caused to
\nthe taxpayers. The purpose is of just, proper and efficient management
\nPage 29 of 30
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\nC\/SCA\/13653\/2020 JUDGMENT
\nof the work of assessment and the public interest. One additional aspect
\nneeds to be kept in mind before taking any appropriate decision that the
\ntime period for the officials of the tax department has been extended
\nupto 31st March 2021 having regard to the current covid19
\npandemic
\nsituation. If that be so, then some extension deserves to be considered in
\naccordance with law. Let an appropriate decision be taken by 12th
\nJanuary 2021.
\n22 Post this matter on 13th January 2021 on top of the Board.
\n23 Mr. Patel, the learned Senior Standing Counsel appearing for the
\nrespondents Nos.2 and 3 shall apprise this Court of any decision or
\ndevelopment in the matter on the next date of hearing.
\n(J. B. PARDIWALA, J)
\n(ILESH J. VORA,J)
\nCHANDRESH
\nPage 30 of 30
\nDownloaded on : Sat Jan 09 14:21:12 IST 2021<\/p>\n","protected":false},"excerpt":{"rendered":"
We are of the view that the respondent No.1 \u2013 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 made by this High Court in the two above noted judgements, more particularly, the observations of the Supreme Court in the case of Vaghjibhai S. Bishnoi (supra) 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.<\/p>\n