Avinash Gupta vs Union Of India & Ors
2015 Latest Caselaw 7159 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                       Date of Decision: 21st September, 2015

+                                 W.P.(C) No. 9032/2015

       AVINASH GUPTA                                               ..... Petitioner
                   Through:                Mr. Manish Jain, Adv.

                                        Versus

       UNION OF INDIA & ORS                                  ..... Respondents

                    Through:               Mr. Jasmeet Singh, CGSC with Ms.
                                           Astha Sharma, Adv. for UOI.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

CM No.20437/2015 (for exemption)

1.     Allowed, subject to just exceptions.

2.     The CM stands disposed of.

W.P.(C) No. 9032/2015 & CM No.20436/2015 (for stay)

3. The petition is filed seeking the following reliefs:-

"a. Issue appropriate Writ, Order or Direction, thereby declaring that the time prescribed for filing the Income Tax Returns under Section 139(1) in the form of "Due Date" is the constitutional and statutory right of the Assesse; and / or b. Issue appropriate Writ, Order or Direction, thereby declaring that the delay in notifying the prescribed Income Tax Forms under Rule 12 of the Income Tax Rules 1962, on and after 1st of April of every assessment year, is

unconstitutional and is an consequence of the abdication of powers by the Respondents; and / or c. Issue appropriate Writ, Order or Direction, thereby directing the Respondents to extend / increase the due date of filing the Income Tax Returns as prescribed under Section 139(1) and furnishing Audit Reports under Section 44 AB of the Income Tax Act, to the extent of delay in number of days in notifying the prescribed Income Tax Forms under Rule 12 of the Income Tax Rules 1962 after 01.04.2015; and / or d. Issue appropriate Writ, Order or Direction, thereby declaring the decision of the Respondents No.1 and 2 vide its Press Release Dated 09.09.2015 as null and void and in contravention of the provisions of Part III of the Constitution of India, by virtue of which, the Respondent No.1 and 2 has not extended the date for filing of returns due by 30.09.2015 for Assessment Year 2015-2016 for certain categories of Assesses including Companies, and Firms and, Individuals Engaged in Proprietary Business / Profession etc., whose Accounts are required to be Audited in terms of the Income Tax Act 1961; and / or e. Issue Writ, Order or Direction in the nature of Certiorari and / or any other appropriate Writ, Order or Direction for the purpose of quashing the said Press Release Dated 09.09.2015 issued by Respondent no.1 and 2; and / or f. Issue Writ, Order or Direction in the nature of mandamus and / or any other appropriate Writ, Order or Direction, thereby directing the Respondents no.1 and 2 to extend the date of filing of Returns due by 30th September for Assessment Year 2015-2016 for Categories of

Assesses Including Companies, and Firms and, Individuals Engaged in Proprietary Business / Profession etc., whose Accounts are required to be Audited as per Income Tax Act, 1961 from 30.09.2015 to 31.12.2015; and / or g. Pass any other order and / or direction, as this Hon'ble Court may deem fit proper under the facts and circumstances of the present case and in the interest of Justice."

4. The petitioner, along with another person had earlier filed W.P.(C)

No.8771/2015 impugning the decision dated 9th September, 2015 of the

Government of India refusing to extend the date prescribed of 30 th

September, 2015 for filing the Income Tax Return (ITR) of entities whose

accounts are required to be audited. The said petition came up first before

this Bench on 14th September, 2015 when finding that the petition did not

disclose any cause of action in favour of the petitioners and that in fact it

was pleaded that the petition had been filed in public interest, it was

enquired from the counsel for the petitioners as to how that petition was

maintainable before this Bench. Upon the same, the counsel for the

petitioners had withdrawn the petition with liberty to file a Public Interest

Litigation (PIL).

5. However now, the petitioner pleading his own cause of action as a

Chartered Accountant engaged by various clients to file returns as well as in

his personal capacity, his own ITR being subject to audit, has filed this

petition.

6. The position which emerges after hearing the counsel for the

petitioner is, Explanation 2 to Section 139(1) of the Income Tax Act, 1961

as amended by Finance Act, 2015 prescribes the "Due Date" i.e. the date for

filing the ITRs of entities whose accounts are required to be audited as 30th

September of the assessment year i.e. to say for the Financial Year 1st April,

2014 to 31st March, 2015, the due date of the Assessment Year 2015-2016

would be 30th September, 2015. However Section 119(2) empowers the

Central Board of Direct Taxes (CBDT) to, if it considers it necessary or

expedient so to do for the purpose of proper and efficient management of the

work of assessment and collection of revenue, issue from time to time,

general or special orders including by way of relaxation of any of the

provisions of inter alia Section 139.

7. It is the case of the petitioner that in exercise of power under Section

119(2), the CBDT can extend the date of 30th September as has been done in

the current year also in relation to assessees not amenable to audit, the due

date for whom was 31st July, 2015 but was extended to 31st August, 2015

and ultimately to 7th September, 2015. It is contended that though there was

a demand for a similar extension in the case of the due date of 30th

September, 2015 also but the same has not been acceded to, without giving

any reasons therefor.

8. The petitioner claims to be entitled to such extension owing to the

delay on the part of the respondents in prescribing the form of the return to

be filed by the assessees due date wherefor is 30 th September, 2015. It is

contended that the said forms were prescribed only vide Notification dated

29th July, 2015 and were made available only w.e.f. 7th August, 2015.

9. The argument of the counsel for the petitioner is that since the

Assessment Year 2015-2016 commenced on 1st April, 2015 and the due date

for filing the return is 30th September, 2015, i.e. after 180 days of

commencement of the assessment year, under the scheme of the Act, 180

days are to be made available to the assessee to file the return. It is

contended that the assessee, as a matter of right, is entitled to the said 180

days and if the respondents owing to their own laxity in prescribing the form

only on 29th July, 2015 and making the same available from 7th August,

2015 have taken away any part of the said 180 days, the assessee should be

entitled to corresponding extension of the due date and which the

respondents are entitled to do in exercise of power under Section 119(2) and

which they have failed to do without giving any reason whatsoever.

10. I have enquired from the counsel for the petitioner as to what is the

prejudice which the petitioner or other assesses suffer from the non-grant of

such extension. It has been enquired whether not the audit required to be

conducted of the accounts for the Financial Year 2014-2015 could have

commenced only after 1st April, 2015 and whether not by the time the said

audit is completed, the forms are available and the time, even if say from

29th July or 7th August, 2015 to 30th September, 2015 is sufficient for filing

the ITR.

11. The counsel for the petitioner has contended:-

(a) that since 180 days are required to be given as a matter of right, it matters not whether the petitioner has suffered any prejudice or not;

(b) that the persons practising in taxation were under the bona fide

impression that upon the promulgation of the Financial (No.2)

Act, 2014, Form 3CD for furnishing the Tax Audit Report

would be amended / modified but which was not done for the

Assessment Year 2015-2016;

(c) certain provisions of the new Companies Act, 2013 have come

into force only w.e.f. 2014-2015 and various clarifications

whereof have been issued from time to time, even after 31st

March, 2015; that the preparation of Audit Report was

dependent on the said factors; and,

(d) that the assesses, due date wherefor is 30th September, have

been discriminated against vis-a-vis the assessees due date

wherefor was 31st July and who were granted extension till 7th

September, 2015;

(e) the Income Tax Department has introduced the concept of zero

tolerance and keeping that in mind also it is in public interest

that sufficient time should be available to the assessees and

practitioners of income tax for auditing and filing ITRs.

12. I have considered the aforesaid contentions.

13. The period claimed by the petitioner as a matter of right of 180 days

for filing the ITR is admittedly not prescribed, neither in the Statute nor in

the Rules. According to the counsel for the petitioner also, the same has to

be deduced from the scheme of the Act.

14. I am afraid, I am unable to gauge any such scheme in the Act

assuring 180 days to the assessee for filing the ITR. As already observed

above, filing of ITR for assesses due date wherefor is 180 days is dependent

upon the accounts of the assessee being audited and which audit the counsel

for the petitioner admits commences only on the beginning of assessment

year. The said audit, in the case of some assesses may be completed in a few

days and in case of others may take longer. Thus, the time taken in audit,

which is variable, will be determinative of the time available thereafter for

filing the ITR. The said audit is not dependent upon the prescription of the

forms for report of the said audit and / or for filing of the ITR. Audit, as per

my understanding is to be as per the Guidelines prescribed by the Institute of

Chartered Accountants of India and the expectation, even if any for

amendment to the form of the Audit Report and /or of the form for filing the

ITR is not to interfere with the commencement or completion of the audit

and which can by no stretch of imagination be said to be a small task.

Experience of life shows that the said audit itself takes the majority of the

time, even if can be said to be prescribed of 180 days, for filing of the ITR.

Once the audit is complete, in my opinion, the time admittedly available

from 29th July, 2015 / 7th August, 2015 to 30th September, 2015 cannot be

said to be so small / short which would qualify as unreasonable and in which

the Chartered Accountants and the other practitioners of the field cannot be

said to be having sufficient time to fill up the forms as per the audit already

completed and to file the ITR.

15. It is not as if the Authorities have not applied themselves to the

matter. The Authorities concerned, while have extended time for filing of

the ITR from the due date of 31st July to 7th September, after having brought

out the Notification dated 29th July, 2015 were of the opinion that there was

no need for extension of due date of 30th September.

16. It is also significant that the respondents, vide Press Release dated 9 th

September, 2015 have notified that the date of 30 th September will not be

extended and have advised the taxpayers to file the returns accordingly. It is

thus not as if the respondents have kept the decision in this regard pending

till the last date. After 9th September also, sufficient time is available for

filing the ITR.

17. Such decisions of the Government, is a matter of policy and which

the Government is best entitled to take and with which the Courts are not to

interfere with except when either find the same to be infringing a vested

right or causing undue prejudice to the persons effected thereby. The

petitioner, has neither been able to make out any case of any time being

prescribed to be made available to the assessee, after the form of audit report

and ITR have been prescribed, for filing the ITR nor has been able to make

out a case of the same causing any prejudice to himself. The time available,

even say after 7th August, 2015 and till 30th September, 2015 is else not

found by me to be illogical or unreasonable to enable the assessees to file

the ITR.

18. The counsel for the petitioner has then argued that the respondents

will not suffer any prejudice by granting such extension of time beyond 30 th

September, 2015 for filing ITR inasmuch as interest, if any payable on the

tax due would then be paid till the extended date for filing of the ITR.

19. However the test to be applied in such matters is not of seeing

whether the respondents would suffer any prejudice or not, without first

being satisfied of the infringement of rights of the petitioner and/or prejudice

being caused to the petitioner. If no right is infringed and no prejudice is

found to be caused to the petitioner, merely because no prejudice would be

caused to the respondents by extending the time for filing the ITR would not

be a ground for interfering with the policy decision of the Government and

granting such extension.

20. Faced therewith, the counsel for the petitioner has made two other

arguments. Firstly, it is contended that since the due date of 31 st July was

extended till 7th September, the practitioners of Income Tax remained busy

till 7th September, 2015 in filing the returns of the assessees due date

wherefor was 31st July and have been left with very little time for assessees

due date wherefor is 30th September, 2015. Secondly, it is contended that

such a representation has been made by the Institute of Chartered

Accountants of India as well.

21. The aforesaid, in my view, would not make any difference. As

aforesaid, these decisions are in the executive domain and unless shown to

be causing any prejudice or infringing a right, are not to be interfered with

under Article 226 of the Constitution of India.

22. Notwithstanding having held so, I am of the view that there is

however some merit, if not legal then otherwise, in the grievance of the

petitioner. The counsel for the respondents appearing on advance notice is

unable to give the reasons for the forms etc. being not available at the

beginning of the assessment year on 1st April of every year and the same

thereby causing inconvenience to the practitioners of the subject. There is

sufficient time available to the Government, after the Finance Act of the

financial year, to finalise the forms and if no change is intended therein, to

notify of the same immediately. There appears to be no justification for

delay beyond the assessment year in prescribing the said forms.

Accordingly, though not granting any relief to the petitioner for the current

assessment year, the respondents are directed to, with effect from the next

assessment year, at least ensure that the forms etc. which are to be

prescribed for the Audit Report and for filing the ITR are available as on 1st

April of the assessment year unless there is a valid reason therefor and

which should be recorded in writing by the respondents themselves, without

waiting for any representations to be made. The respondents, while doing

so, to also take a decision whether owing thereto any extension of the due

date is required to be prescribed and accordingly notify the public.

23. Save for the aforesaid direction, the petition is dismissed.

No costs.

Copy of this order be given dasti under signature of Court Master.

RAJIV SAHAI ENDLAW, J.

SEPTEMBER 21, 2015 „pp‟..