The order dated 20th August, 2014 issued by the Central Board of Direct Taxes (CBDT) extending the due date for obtaining and furnishing of Tax Audit Report (TAR) under section 44AB of the Act for Assessment Year 2014-15 from 30th September, 2014 to 30th November, 2014 without extending the due date for furnishing of Return of Income (ROI) created a nationwide rage and discontent amongst lakhs of tax payers and finance professionals who forecasted some practical possible difficulties for filing ROI. The Income Tax Act, 1961 requires the Tax Audit Report to be filed along with Income Tax Returns by 30th September. However, a practical problem cropped up when the CBDT introduced new perform of Tax Audit Report in the middle of the year.
Numerous representations were received in the CBDT requesting for extension of due date for furnishing of ROI in lines with the TAR. Writ Petitions were also filed in various High Courts for directing the Board to extend the due date for furnishing the ROI from 30th September 2014 to 30th November 2014. The problem created by the issuance of order on 20th August, 2014 had a very simple solution right from its very first day. However numerous efforts were required through intervention of High Courts from Gujarat, Andhra Pradesh, Madras and Bombay to implement the simple solution. The implementation of solution came after the various High Courts questioned the law makers as to why so many efforts were needed in order to solve such a simple problem.
Here’s a glimpse on how the Honourable High Courts responded to Writ Petitions filed by various Petitioners across the country –
In response to the Writ Petition filed by The Chamber of Tax Consultants & Others Vs. Union of India, the Honourable Bombay High Court passed an order stating that CBDT to consider the representation of the Chamber before 30th September. In case of All India Federation of Tax Practitioners, Mumbai Vs. Union of India & CBDT, the Honourable High Court of Hyderabad observed that there is no justification or reason to extend the date of TAR alone and not to extend the date of ITR and accordingly the Union of India and CBDT were directed to consider the contents of the representations of AIFTP for extending the date of filing ITRs in tandem with the date of TAR and dispose of the representations before 30th September 2014. However, the Writ Petition filed by Mahesh Kumar and Company Vs. Union of India & Anr. in the Delhi High Court was withdrawn by the petitioner citing that they are unhappy with affidavit, as a result of which the Petition was dismissed as withdrawn. On 24th September 2014, the Hon’ble Rajasthan High Court adjourned the civil petition filed by Raj Tax Consultants Vs. Union of India & Ors to 26th September 2014.
The verdict of the Gujarat High Court vide judgement dated 22.09.2014 formed the basis of the extension of date by CBDT. The Hon’ble Gujarat High Court directed the CBDT to consider the practical difficulties of petitioners and to extend the due date for furnishing the Return of Income to 30th November 2014, except for the purposes of charging of interest under section 234A of the Income Tax Act for late filing of Return of Income.
Therefore, after considering the representations received and the judgments of various High Courts, the CBDT in exercise of its powers conferred under section 119 of the Act, extended the due date for furnishing the ROI from 30th September 2014 to 30th November 2014 for Assessment Year 2014-15 for all purposes of the Act in the case of an assessee, who is required to file his return of income by 30th September 2014 and is also required to get his accounts audited u/s 44AB of the Act or is a working partner of a firm whose accounts are required to be audited u/s 44AB of the Act. For removal of doubt, it was further clarified that for an assessee (other than working partner of a firm which is required to obtain and furnish Tax Audit Report), who is required to file its ROI by 30th September 2014 but not required to obtain and furnish TAR u/s 44AB, the due date for furnishing of return of income for AY 2014-15 remains as 30th September 2014.
In addition to the petitions filed in various courts, various groups and communities were formed on WhatsApp, Social Networking Websites, and Professional Forums etc. comprising of members from different parts of the country to discuss the problems faced by tax payers, trade & industry and professionals. Social Media played a pivotal role in this process providing a constant source of motivation. The groups raised the point in order to gain attention of lawmakers.
Active members who represented before the Gujarat High Court comprised of CA Rajni Shah, the petitioner and CA Durgesh Buch from Ahemdabad, CA Dilip Khetan from Gorakhpur, CA Amresh Vashisht from Meerut. The guiding force of Delhi High Court Petition consisted of CA Vivek Khurana from New Delhi and CA (Dr.) Sunil Ram Gupta from Ghaziabad. The petitioners at Mumbai High Court were CA Archna Yadav , CA Ameet Patel , CA Paras Salva, CA Sandeep Kanoi, CA Sanjeev Lalan from Mumbai, CA RA Sharma from Jaipur, CA Atul Modani , CA Sarosh Irani and CA Arul Giri from Pune and Tushar Nagar from Lucknow. Rajasthan HC petitioner CA Satish Gupta and Advocate Pankaj Ghiya also motivated the petitioners across the country. The ICAI also actively contributed towards the petition in common interest of tax payers, industry and professionals.
The extension of due date came as a great relief to lakhs of tax payers and professionals. However, the extension of date came with section 234A rider and a view of many experts that it is not permitted in the Income tax Act 1961 as Explanation (1) to Section 234A(1) clearly provides that the due date as referred to in section 234A(1) is the due date u/s 139(1). Gujarat High Court observed in para 65 that “…It would, however, be open for the board to qualify such relaxation by extending due date for all purposes, except for the purpose of Explanation (1) to Section 234A of the Act”.
Thus, the extension of due date for furnishing Return of Income for Assessment Year 2014-15 has been a bumpy ride. Every single day of month of September (which is considered as the busiest month for CA fraternity) has been full of uncertainties and speculation amongst the CA fraternity and tax payers as to whether the due date will be extended or not. The extension of due date by the CBDT has highly relieved everyone thereby proving that the verdict delivered by our judicial system was fair. Thus, this 30th September 2014 will not only be a bit more relaxed as compared to other past Septembers but also a memorable one!
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