The Tax Publishers2021 TaxPub(DT) 0237 (Guj-HC)

INCOME TAX ACT, 1961

Section 119

Where assessee having regard to Covid-19 pandemic situation sought for CBDT to exercise its powers vested in it under section 119 by extending due date of 31-10-2020 at least for three months, i.e., up to 31-1-2021 for the purpose of both filing the ITR and tax audit report, UOI was directed to immediately look into the issue, and to take an appropriate decision at the earliest in accordance with law, especially when time period for officials of the tax department had been extended up to 31-3-2021 having regard to current Covid-19 pandemic situation.

CBDT - Powers of CBDT - Assessee having regard to Covid-19 pandemic situation seeking CBDT to exercise its powers vested in it under section 119 by extending due date of 31-10-2020 - at least for three months, i.e., up to 31-1-2021 for the purpose of both filing the ITR and tax audit report

Having regard to Covid-19 pandemic situation, CBDT, thought fit to extend due date for filing tax audit report from 30-9-2020 to 31-10-2020 in case of all those assessees who were required to get their books of account audited. Assessee-trust, having its members, the various professions and various associations of professionals from State of Gujarat engaged in the field of practising taxation sought for isuance of writ of mandamus to UOI, Ministry of Finance, to ask CBDT to exercise its powers vested in it under section 119 by extending due date of 31-10-2020 at least for three months, i.e., upto 31-1-2021 for the purpose of both filing the ITR and Tax Audit Report. Assessee's case was that in line with reality of Covid-19 pandemic and due to orders and directives for work places from Central Government, Home Ministry regarding 'Work from Home', 'Staggering of work/Business hours' and 'reduced workforce' it was impossible for Tax Practitioners to complete Audit work to issue a certificate required under section 44AB within extended due date of 30-10-2020. There was a duty cast upon CBDT to ensure that necessary utility for e-filing of income-tax returns was made available to various categories of assessees at the beginning of assessment year so that assessees could plan their tax matters accordingly. However, amendment in the forms with additional requirements and utilities for e-filing of returns being available only belatedly curtailed the time available for filing income-tax returns. Amendment in rules and disclosure requirements as late as on 1-10-2020 has effectively given only 30 days (as opposed to extended 214 days) to the Chartered Accountants to furnish Tax Audit Report. Also, belated issuance of ITR forms have also curtailed the effective time period. Any user who file e-return will had 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. Further, more than 50% of the Income Tax Returns and Tax Audit Reports were e-filed in 2019 using private softwares and therefore, issuance of Schema and Validation Rules before sufficient time is also crucially important for the same. Due to delay in e-enabling of return of forms, effective time available for filing return of income became very less and cause severe hardship to assessees and tax practitioners. Held: The powers given under section 119 to 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 work of assessment and the public interest, accordingly, UOI, Ministry of Finance should immediately look into the issue, and to take an appropriate decision at the earliest in accordance with law. One additional aspect to be kept in mind before taking any appropriate decision was that time period for officials of the tax department had been extended upto 31-3-2021 having regard to current Covid-19 pandemic situation. If that be so, then some extension deserves to be considered in accordance with law.

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