New Delhi: The Gujarat High Court has finally rejected petitions looking for extension of deadline for filing of returns.
It said in its order, “...we should not interfere in the matter”.
The Gujarat High Court, however, observed that the CBDT may consider to take ‘a lenient view’ on penalty as per I-T laws on the late filing of the Tax Audit Reports.
It may be noted that the CBDT on January 11, 2021 had rejected the demand for more extension of the deadline for filing returns where audit report is required beyond February 15.
The HC order, issued on January 13, reads in conclusion that the High Court “should not interfere in the matter after hearing all parties”.
It further said that both the writ applications have failed and are therefore rejected adding that the “CBDT may consider issuing an appropriate circular taking a lenient view as regards the consequences of late filing of the Tax Audit Reports as provided under Section 271B of the Act. We leave it to the better discretion of the CBDT in this regard," it said.
As per the Section 271B of the Income Tax Act, “if any assesses fails to get his accounts audited in respect of any previous year or years relevant to an assessment year or furnish a report of such audit as required under section 44AB, the Assessing Officer may direct that such person shall pay, by way of penalty a sum equal to onehalf per cent of the total sales, turnover or gross receipts in business, as the case may be”.
It may be recalled that in the case of the All India Gujarat Federation of Tax Consultants vs Union of India, the Gujarat High Court on January 8, 2021 had directed the CBDT to look into the issue of extension of due dates for filing of tax audit report under Section 44AB of the Income Tax Act.
Following the Court’s direction, the CBDT passed an order dated January 11, 2021 under the Section 119 of Income-tax Act, 1961 disposing off the representations for extension of due date for filing of Audit Report under Section 44AB, in compliance with the order of Gujarat High Court. It informed the Court that upon due consideration of all the relevant aspects of the matter, the Board has taken the final decision not to extend the time limit any further. It also cited a few Supreme Court’s decisions to corroborate its decision.
The Court observed that if the CBDT has arrived at the conclusion that the extension of time limit would not be in the interest of the Revenue, then it cannot be said that the CBDT has failed to exercise its discretionary powers vested in it under Section 119 of the Act. Thus, no writ mandamus can be issued.
However it may be noted that the government having taken into consideration the difficulties faced by taxpayers due to Covid pandemic, had already pushed the deadline for filing ITR thrice -- first from the normal deadline of July 31 to November 30, 2020, and then to December 31, 2020. Again, on December 30 2020, the government extended the deadline to file ITR for individuals by 10 days to January 10 and for businesses where audit is required till February 15, 2021.