The Gujarat HC vide its judgement in the case of The All India Gujarat Federation of Tax Consultants vs. Union of India [SCA 13653 of 2020], had directed the Ministry of Finance to look into the issue of extension of due dates for filing of Audit Report u/s. 44AB of the Income tax Act. Pursuant thereto, the CBDT has issued an Order u/s. 119 of the Income Tax Act, rejecting the representation for further extension of due date for filing Audit Report.
The CBDT reasoned that in the wake of the COVID-19 pandemic, they had proactively extended the due dates for various Income Tax Returns and Audit Report several times. The CBDT further compared the COVID-19 situation globally while stating that they had extended the due dates more empathetically vis-à-vis other economies, which were worse hit by the pandemic.
The CBDT further reasoned that any further extension would 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.
The CBDT further relied upon various judgements of the SC to provide that when there is no mathematical or logical way of fixing the due date 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.
GLS Comments:
After a rather long wait, the CBDT has finally responded to the Representations and put all the speculations to rest once and for all in respect of due date extensions. Albeit the decision of the CBDT is backed by various SC judgements, the timely filing of Returns and audit reports can be ensured only if the law does not change frequently and if the utilities for filing of the returns and reports function correctly. Accordingly, the CBDT ought to ensure that the grievances of the taxpayers are correctly addressed on a timely basis.
Disclaimer:
The information provided in this update is intended for informational purposes only and does not constitute legal opinion or advice. Readers are requested to seek formal legal advice prior to acting upon any of the information provided herein. This update is not intended to address the circumstances of any particular individual or corporate body. There can be no assurance that the judicial/ quasi judicial authorities may not take a position contrary to the views mentioned hereinrra quis.
Sign up for the Newsletter