ALL GUJARAT FEDERATION OF TAX CONSULTANTS Vs. UNION OF INDIA
HIGH COURT OF GUJARAT
All Gujarat Federation Of Tax Consultants
UNION OF INDIA
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(1.) The draft amendment is allowed. The same shall be carried out at the earliest.
(2.) By this writ application under Article 226 of the Constitution of India, the writ applicants have prayed for the following relief:
The petitioners, therefore, prays that this Hon'ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, direction or order and be pleased to:
(a) direct the respondent No.2 henceforth not make any alternations in Forms and Utilities or changes in tax compliance requirements, after the beginning of the Assessment year in which the same are made applicable; providing the tax payers and the tax practitioners a clear period of 183 and 214 days to prepare and submit the due reports and forms respectively.
(b) direct the respondent No.2 to extend the due date for filing the Income Tax Returns (ITR) and Tax Audit Reports (TAR) for AY 2020-21 to 31.01.2021
(c) any other and further relief deemed just and proper be granted in the interest of justice.
(d) to provide for the cost of this petition.
(3.) The facts giving rise to this writ application may be summarised as under:
3.1 The writ applicant No.1 is a Trust formed and registered in accordance with the provisions of the Bombay Public Trust Act, 1950 (for short, the Act, 1950 ) and has, as it members, the various professions and various associations of professionals from the State of Gujarat engaged in the field of practicing taxation. The writ applicant No.2 is a practicing Chartered Accountant and a Co-Chairman of the representation committee of the writ applicant No.1. Mr. S. N. Soparkar, the learned Senior Counsel assisted by Mr. B. S. Soparkar, the learned counsel appearing for the writ applicant would submit that having regard to the covid-19 pandemic situation, the CBDT i.e. the respondent No.2 herein thought fit to extend the due date for filing the tax audit report from 30th September 2020 to 31st October 2020 in the case of all those assessees who are required to get their books of account audited. Mr. Soparkar wants this Court to issue a writ of mandamus to the Union of India, Ministry of Finance, to ask the CBDT to exercise its powers vested in it under Section 119 of the Income Tax Act, 1961 (for short, the Act, 1961 ) by extending the due date of 31st October 2020 at least for three months i.e. upto 31st January 2021 for the purpose of both : (1) filing the ITR and (2) tax audit report in case of assessees whose accounts are required to be audited. Mr. Soparkar would submit that in line with the reality of covid 19 pandemic and due to orders and directives for work places from the Central Government Home Ministry regarding Work for Home , Staggering of work / Business hours and reduced workforce it is impossible for the Tax Practitioners to complete the Audit work to issue a certificate required under section 44AB within the extended due date of 30.10.2020. It is submitted that as reflected in the data released by the respondent No.2, for 2019 as many as 55% of the Income Tax Returns and Tax Audit Reports were filed outside of office hours which shows the sheer burden of workload upon the Tax Practitioners to work overtime to complete the assignment. It is, therefore, submitted that in the year 2020 with covid infections and safety measures, such work is not possible. Mr. Soparkar would submit that the Ministry of Law and Justice has in fact recognized the reality of the situation and extended en mass time limits (except otherwise specified) of the specified Acts to 31st March 2021 which falls during the period from 30th March 2020 to 31st December 2020 vide the Taxation and Others Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Even in the specified extensions, in many cases, the effective extensions are substantial ranging to 3 to 6 months. It is, therefore, submitted that a meagre extension of one month in case of the filing of return of income under Section 139 is violative of Article 14 and Article 19(1)(g) of the Constitution of India being manifestly arbitrary, discriminatory and unreasonable. Mr. Soparkar would submit that as stated by this High Court in Special Civil Application No.15075 of 2015, there is a duty cast upon the respondents to ensure that necessary utility for e-filing of the income-tax returns is made available to various categories of assessees at the beginning of the assessment year so that the assessees can plan their tax matters accordingly. However, the amendment in the forms with additional requirements and utilities for e-filing of returns being available only belatedly curtails the time available for filing the income-tax returns. It is submitted that the amendment in rules and disclosure requirements as late as on 1st October 2020 has effectively given only 30 days (as opposed to extended 214 days) to the Chartered Accounts to furnish the Tax Audit Report. Also, the belated issuance of the ITR forms have also curtailed the effective time period. Any user who file e-return will have to create an XML file based on the schema. The schema is needed by those, software companies and organizations who wish to use this code to help create their own software utility for filing up these forms. Due to frequent changes in schema or utility, third party services providers will have to upgrade their software which may take about 5 to 6 days to upgrade, depending upon nature of change. It is further submitted that more than 50% of the Income Tax Returns and Tax Audit Reports were e-filed in 2019 using private softwares and therefore, the issuance of Schema and Validation Rules before sufficient time is also crucially important for the same. Mr. Soparkar further submitted that due to delay in e-enabling of return of forms, the effective time available for filing return of income becomes very less and cause severe hardship to the assessees and the tax practitioners. Tax Audit of accounts of an assessee is a detailed and time consuming exercise, wherein the Chartered Accountant is required to vouch for and certify the correctness of the details provided in the TAR. Understanding the need for the thoroughness of the Audit, the legislators, in their wisdom, have statutorily granted a reasonable time beginning from the Assessment Year on 1st of April. It may be noted that only after such thorough audit of accounts of an assessee is carried out, then a computation of the actual tax liability of an assessee can take place and ITR can be filed. Arbitration alternation of such mandatorily required details causes genuine and grave hardship upon the assessees, and the principle of natural justice only mandates that such introduction be made in systematic manner accounting for time line to take into account the changes brought-in.
3.2 Mr. Soparkar invited the attention of this Court to the chart as below to give a fair idea as regards the delay caused in release of the utility to e-file the forms:
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