Gujarat High Court Rejects Plea To Extend Tax Return, Audit Report Deadlines

The Gujarat High Court has rejected a plea seeking extension of due dates for filing tax return and audit report, saying interference in the matter of revenue at this point of time may have far reaching implications.

All Gujarat Federation of Tax Consultants had filed a writ petition seeking an extension of various due dates under the Income Tax Act till March 31.

While the court may grant an order on the ground that deadlines had been already extended three times before, such an approach may upset the functioning of government and may lead to undesirable results, the high court bench comprising Justice JB Pardiwala and Ilesh Vora said, rejecting the writ petition.

The Central Board of Direct Taxes on Jan. 11 rejected all representations, saying earlier extensions provided by the government in light of the Covid-19 pandemic was more generous compared to other countries.

‘Difficult To Prepare Tax Returns’

• The tax federation sought the extension of the due dates citing that:
• Taxpayers and consultants are facing a genuine hardship due to the delay caused by the actions of the tax department.
• The CBDT belatedly released the software utility used for filing tax audit report and income tax returns. It was released after five months despite the high court’s direction to release it before April 1.
• Many amendments were made in the format of tax audit reports during October last year, which caused a further delay in the filing process.
• The Covid-19 pandemic impacted availability of employees and curtailed their working hours, disrupting the return filing process.

Zoheb Hussain, counsel representing the tax department, argued that the changes in tax returns didn’t add any new fields. Such changes being “miniscule” in nature did not affect the tax audit work. The decision to not extend certain deadlines was on basis of a detailed consideration, Hussain told the high court.

The high court, however, refused to interfere saying it can exercise its writ jurisdiction as a matter of discretion. It has also observed that the tax department may consider taking a lenient view for late filing of tax audit reports and release an appropriate circular for this.