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Court mandates extension of income tax return filing deadlines amid COVID-19 challenges.

In this case, the petitioners, represented by S.N. Soparkar, sought a writ of mandamus to compel the Central Board of Direct Taxes (CBDT) to extend the due dates for filing income tax returns and tax audit reports due to the difficulties posed by the COVID-19 pandemic. The court ultimately ruled in favor of the petitioners, granting the requested extensions.

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Case Name:

All Gujarat Federation of Tax Consultants Vs Union of India (High Court of Gujarat)

R/Special Civil Application No. 13653 of 2020

Date: 8th January 2021

Key Takeaways:

The court recognized the extraordinary circumstances of the COVID-19 pandemic as a valid reason for extending tax filing deadlines.
The decision emphasizes the importance of providing taxpayers and tax practitioners adequate time to comply with tax regulations.
The ruling reinforces the court’s role in ensuring that government agencies act fairly and justly, especially during crises.

Issue

Did the CBDT have the authority to extend the deadlines for filing income tax returns and tax audit reports in light of the COVID-19 pandemic?

Facts

The petitioners included a trust and a practicing Chartered Accountant, who argued that the pandemic severely hindered their ability to meet tax compliance deadlines.
The CBDT had previously extended the due date for filing tax audit reports from September 30, 2020, to October 31, 2020, but the petitioners sought further extensions.
The petitioners claimed that the last-minute changes in tax compliance requirements created undue hardship.

Arguments

Petitioners’ Arguments: They argued that the pandemic made it impossible to complete necessary audits and file returns on time. They requested an extension of the deadlines to January 31, 2021, to allow adequate time for compliance.
Respondents’ Arguments: The CBDT contended that sufficient time had already been provided for filing returns and that the deadlines should not be extended further, as it would disrupt tax collection processes.

Key Legal Precedents

The court referenced Section 119 (of Income Tax Act, 1961), which grants the CBDT the authority to issue orders and directions for the proper administration of tax laws.
The court also cited UCO Bank v. CIT, (1999) 4 SCC 599, emphasizing that the CBDT’s powers are beneficial and should be exercised to prevent undue hardship to taxpayers.

Judgement

The court ruled in favor of the petitioners, directing the CBDT to extend the due dates for filing income tax returns and tax audit reports. The court highlighted the need for the government to act justly and efficiently, especially during the pandemic, and ordered that the necessary notifications be issued to reflect the new deadlines.

FAQs

Q1: What does this ruling mean for taxpayers?

A1: Taxpayers now have extended deadlines to file their income tax returns and tax audit reports, providing them with more time to comply with tax regulations.

Q2: How did the court justify the extension?

A2: The court recognized the extraordinary circumstances of the COVID-19 pandemic, which created significant challenges for taxpayers and tax practitioners.

Q3: What is the significance of Section 119 (of Income Tax Act, 1961)?

A3: This section empowers the CBDT to issue orders that can relax tax compliance requirements, ensuring that taxpayers are not unduly burdened.

Q4: Will this ruling affect future tax compliance deadlines?

A4: While this ruling specifically addresses the pandemic situation, it sets a precedent for considering extraordinary circumstances in future tax compliance matters.

1. The draft amendment is allowed. The same shall be carried out at the earliest.

2. By this writ application under Article 226 of the Constitution of India, the writ applicants have prayed for the following relief:

“The petitioners, therefore, prays that this Hon'ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or a writ of certiorari or a writ in the nature of certiorari or any other appropriate

writ, direction or order and be pleased to:

(a) direct the respondent No.2 henceforth not make any alternations in

Forms and Utilities or changes in tax compliance requirements, after the

beginning of the Assessment year in which the same are made applicable;

providing the tax payers and the tax practitioners a clear period of 183

and 214 days to prepare and submit the due reports and forms

respectively.

(b) direct the respondent No.2 to extend the due date for filing the Income

Tax Returns (ITR) and Tax Audit Reports (TAR) for AY 202021 to

31.01.2021.

interest of justice.

(d) to provide for the cost of this petition.”

3 The facts giving rise to this writ application may be summarised as

under:

3.1 The writ applicant No.1 is a Trust formed and registered in

accordance with the provisions of the Bombay Public Trust Act, 1950

(for short, “the Act, 1950”) and has, as it members, the various

professions and various associations of professionals from the State of

Gujarat engaged in the field of practicing taxation. The writ applicant

No.2 is a practicing Chartered Accountant and a CoChairman of the

representation committee of the writ applicant No.1. Mr. S. N. Soparkar,

the learned Senior Counsel assisted by Mr. B. S. Soparkar, the learned

counsel appearing for the writ applicant would submit that having

regard to the covid19 pandemic situation, the CBDT i.e. the respondent

No.2 herein thought fit to extend the due date for filing the tax audit

report from 30th September 2020 to 31st October 2020 in the case of all

those assessees who are required to get their books of account audited.

Mr. Soparkar wants this Court to issue a writ of mandamus to the Union

of India, Ministry of Finance, to ask the CBDT to exercise its powers

vested in it under Section 119 (of Income Tax Act, 1961) (for short,

“the Act, 1961”) by extending the due date of 31st October 2020 at least

for three months i.e. upto 31st January 2021 for the purpose of both : (1)

filing the ITR and (2) tax audit report in case of assessees whose

accounts are required to be audited. Mr. Soparkar would submit that in

line with the reality of covid 19 pandemic and due to orders and

directives for work places from the Central Government Home Ministry

regarding “Work for Home”, “Staggering of work / Business hours” and

“reduced workforce” it is impossible for the Tax Practitioners to

complete the Audit work to issue a certificate required under section

44AB within the extended due date of 30.10.2020. It is submitted that as

reflected in the data released by the respondent No.2, for 2019 as many

as 55% of the Income Tax Returns and Tax Audit Reports were filed

outside of office hours which shows the sheer burden of workload upon

the Tax Practitioners to work overtime to complete the assignment. It is,

therefore, submitted that in the year 2020 with covid infections and

safety measures, such work is not possible. Mr. Soparkar would submit

that the Ministry of Law and Justice has in fact recognized the reality of

the situation and extended en mass time limits (except otherwise

specified) of the specified Acts to 31st March 2021 which falls during the

period from 30th March 2020 to 31st December 2020 vide the Taxation

and Others Laws (Relaxation and Amendment of Certain Provisions) Act,

2020. Even in the specified extensions, in many cases, the effective

extensions are substantial ranging to 3 to 6 months. It is, therefore,

submitted that a meagre extension of one month in case of the filing of

return of income under Section 139 (of Income Tax Act, 1961) is violative of Article 14 and Article

19(1)(g) of the Constitution of India being manifestly arbitrary,

discriminatory and unreasonable. Mr. Soparkar would submit that as

stated by this High Court in Special Civil Application No.15075 of 2015,

there is a duty cast upon the respondents to ensure that necessary utility

for efiling of the incometax returns is made available to various

categories of assessees at the beginning of the assessment year so that

the assessees can plan their tax matters accordingly. However, the

amendment in the forms with additional requirements and utilities for e-

filing of returns being available only belatedly curtails the time available

for filing the incometax returns. It is submitted that the amendment in

rules and disclosure requirements as late as on 1st October 2020 has

effectively given only 30 days (as opposed to extended 214 days) to the

Chartered Accounts to furnish the Tax Audit Report. Also, the belated

issuance of the ITR forms have also curtailed the effective time period.

Any user who file ereturn will have 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. It is further submitted that more than 50% of the

Income Tax Returns and Tax Audit Reports were efiled in 2019 using

private softwares and therefore, the issuance of Schema and Validation

Rules before sufficient time is also crucially important for the same. Mr.

Soparkar further submitted that due to delay in eenabling of return of

forms, the effective time available for filing return of income becomes

very less and cause severe hardship to the assessees and the tax

practitioners. Tax Audit of accounts of an assessee is a detailed and time

consuming exercise, wherein the Chartered Accountant is required to

vouch for and certify the correctness of the details provided in the TAR.

Understanding the need for the thoroughness of the Audit, the

legislators, in their wisdom, have statutorily granted a reasonable time

beginning from the Assessment Year on 1st of April. It may be noted that

only after such thorough audit of accounts of an assessee is carried out,

then a computation of the actual tax liability of an assessee can take

place and ITR can be filed. Arbitration alternation of such mandatorily

required details causes genuine and grave hardship upon the assessees,

and the principle of natural justice only mandates that such introduction

be made in systematic manner accounting for time line to take into

account the changes brought in.

3.2 Mr. Soparkar invited the attention of this Court to the chart as

below to give a fair idea as regards the delay caused in release of the

utility to efile the forms:

ITR/Form Due date of filing(original)

Due date of filing (extended) Time available (extended)

Date of availability of efiling utility

Effective time available

ITR 1 31.07.2020 30.11.2020 244 days 02.06.2020 182 days

ITR 2 31.07.2020 30.11.2020 244 days 26.06.2020 158 days

ITR 3 31.07.2020 30.11.2020 244 days 31.07.2020 123 days

ITR 4 31.07.2020 30.11.2020 244 days 05.06.2020 179 days

ITR 5 31.07.2020 30.11.2020 244 days 25.08.2020 98 days

ITR 6 31.07.2020 30.11.2020 244 days 10.10.2020 52 days

ITR 7 31.07.2020 30.11.2020 244 days 03.09.2020 89 days

Form Due date of filing (original)

Due date of filing (extended) Time available (extended)

Date of updation of utility

Effective time available

3CA, 3CB, 3CD

30.09.2020 31.10.2020 214 days 25.08.2020 67 days

DELAY IN AMENDING 3CA/3CB/3CD FORM

Date on which form / rules are amended Date of providing amended form / utility'1.10.2020 Awaited as on 19.10.2020

4. It is submitted that the decision of the respondent No.2 to

introduce the new forms to be made applicable 30 days prior to the due

date and to subsequently amend the utility without corresponding

extension of the due date to efile is without any basis and contrary to

law.

5. Mr. Soparkar, in support of his aforesaid submissions, has placed

strongly reliance on the following two decisions of this High Court:

(1) All Gujarat Federation of Tax Consultants vs. Central

Board of Direct Taxes [2014] 50 taxmann.com 115 (Gujarat)

[Special Civil Application No.12571 and 12656 of 2014

decided on 22nd September 2014]

(2) All Gujarat Federation of Tax Consultants vs. Central

Board of Direct Taxes [2014] 50 taxmann.com 115 (Gujarat)

[Special Civil Application No.15075 of 2015 decided on 29th

September 2015]

6. Mr. Soparkar would submit that in both these cases upon which

reliance is placed, the tendency of the respondents to make multiple last

minute changes was criticized. In both the judgements, directions were

issued to grant additional time for filing returns.

7. Mr. Soparkar also pointed out that a detailed representation has

been filed addressed to the Union Finance Minister of India dated 12th

October 2020 at Annexure : I to this writ application (page : 108).

However, there is no response in this regard at the end of the respondent

No.1 till this date.

8. In such circumstances referred to above, Mr. Soparkar prays that

there being merit in this writ application, the same may be considered

accordingly.

9. On the other hand, this writ application has been vehemently

opposed by Mr. Varun Patel, the learned Senior Standing Counsel

appearing for the respondents Nos.2 and 3 respectively. Mr. Patel

pointed out that so far as ITR – 1 and ITR – 4 is concerned, the time

limit expires on 10th January 2021. The Tax Audit Reports are to be

submitted by 15th January 2021 and the returns are to be filed by 15th

February 2021. He would submit that for the Assessment year 202021,

the due date for filing the ITR and TAR under the Act has been extended

earlier considering the covid19 pandemic as under:

[a] The due date for filing income tax returns for A.Y.202021 was

extended vide the Taxation and Other Laws (Relaxation and

Amendment of Certain Provisions) Act, 2020 to 30th November

2020. Subsequently, vide notification S.O. 3906 (E) dated 29th

Oct, 2020, the due dates were further extended to 31st Jan. 2021

for cases in which tax audit report under section 44AB (of Income Tax Act, 1961) is required

to be filed and 31st Dec. 2020 for others.

[b] Since as per Section 44AB (of Income Tax Act, 1961) due date for filing tax audit report

is one month prior to the due date for return, the due date for

filing of tax audit report was also extended to 31st Oct. 2020 vide

Taxation and Other Laws (Relaxation and Amendment of Certain

Provisions) Act, 2020 and extended further to 31st Dec. 2020 vide

notification S.O. 3906(E) dated 20th Oct. 2020.

[c] Subsequently vide notification S.O. 4805(E), the due dates

were further extended to 15th February, 2021 for cases in which

tax audit report under Section 44AB (of Income Tax Act, 1961) is required to be filed and

10th January, 201 for others.

10. Mr. Patel would submit that based on Notified Forms, the software

for preparation of ITRs have been prepared and the date of release of 1st

version of ITR utilities in efiling portal is as per table below. Due to

changes in Notified Form or Press releases the ITR preparation software

have been modified / are being modified:

ITR utility Date of release of ITR utility in efiling portal

ITR1 '02 June 2020

ITR2 '26 June 2020

ITR3 '31 July 2020

ITR4 '05 June 2020

ITR5 '25 Aug 2020

ITR6 '22 Sept 2020

ITR7 '03 Sept 2020

11. Mr. Patel would further submit that ITRs 1 and 4 meant for

salaried tax payers and business reporting income on presumptive basis,

constitute 81% of all ITRs filed, and were available for filing within 1

week of Notification of the forms by CBDT. Til 28th Dec 4.37 Cr. ITRs

had been filed for only AY 202021 as compared to 4.51 Cr for only AY

201920 as on 28th Aug 2019.

12. Mr. Patel would also submit that utility for filing TAR – Form

No.3CA3CD & 3CB3CD for A.Y. 202021, incorporating amendments as

per notification dated 01Oct2020 was released in efiling portal on22

Oct2020. The utility before the date of notification for amendment of

Form was already available in efiling portal which would be used for

filing the Form No.3CA3CD & 3CB3CD A.Y. 2020221 till Oct. 1st Form

No.3CEB for A.Y. 202021, incorporating amendments as per notification

dated 01Oct2020 was released in efiling portal on 28Oct2020. The

utility before the date of notification for amendment of Form was

already available in efiling portal which could be used for filing the

Form No.3CEB for A.Y. 202021 till Oct. 1st. Therefore, except for the

gap from Oct 1st to Oct 21st necessitated to incorporate changes as per

notification dated 01Oct2020 in the software/portal CAS/Tax payers

could submit their Tax Audit Reports at all other dates. It is submitted

that till 28th Dec 2020, 1,51,855 FORM 3CA and 13,63,277 FORM 3CB

under Section 44AB (of Income Tax Act, 1961) have been filed.

13. Mr. Patel would further submit that the changes incorporated in

the various forms and utilities during an assessment year are to give

effect to the relevant Finance Act which comes into effect at the start of

the said assessment year. Further, apart from the above, any changes to

the forms and utilities, if made, are only to bring about simplification of

procedure, clarify in understanding and ease of compliance of the tax

payers.

14. Mr. Patel would submit that the Government has been proactive in

analyzing the situation and providing relief to assessee. However, it

should also be appreciated that filing of tax returns/audit reports are

essential part of the compliance obligations of assessee and cannot be

delayed indefinitely. Many functions of the Income tax Department start

only after the filing of the returns by the assessee. Filing of tax returns

by assessee also results in collections of taxes either through payment of

self assessment tax by the asessee or by the subsequent collection by the

department post processing or assessment of the tax returns. The tax

collections assume increased significance in these difficult times and

Government of India needs revenue to carry out relief work for poor and

other responsibilities. Any delay in filing returns affects collection of

taxes and hence providing relief to poor. It may also be noted that

sufficient time has already been given to taxpayers to file their tax

returns and a large number of taxpayers have already filed their returns

of income.

15. In the last, Mr. Patel pointed out that the last extension for filing

the ITRs and TARs has been given by press release dated 30th December

2020. The Government Notification dated 31st December 2020 has also

been issued with respect to the extension for fling the ITRs and TARs.

16. Mr. Patel pointed out that having regard to the same, the Bombay

High Court thought fit not to entertain an identical petition and the

same came to be rejected vide order dated 31st December 2020. Mr.

Patel invited out attention to page : 138 of the paper book on which the

order passed by the Bombay High Court has been annexed.

17. In such circumstances referred to above, Mr. Patel prays that there

being no merit in this writ application, the same may be rejected.

18. Having heard the learned counsel appearing for the parties and

having gone through the materials on record, we intend to keep this writ

application pending and pass an interim order in the larger interest of

justice.

19. In All Gujarat Federation of Tax Consultants (supra), a

Coordinate Bench of this High Court had the occasion to consider

identical situation. We quote few relevant observations made in the said

judgement:

“38. We do not have very clear details as to what was the period made

available for the receipt of the suggestion and consultation from the

stakeholders and what was the extra time consumed by the Law Ministry

for the purpose of vetting. However, without going into these details, when

it could be noted that this change of utility and non availability of the new version till 20th August, 2014 is the cause for the issue to have cropped up,the assesses cannot be put to the hardship nor can the professionals be made to rush only because the department chose to change the utility during the mid year.

51.1 It would be apt to reproduce the relevant paragraphs of the judgment

of this Court rendered in the case of Vaghjibhai S. Bishnoi v. Income

Tax Officer and another reported in [2013] 36 taxmann.com 371

(Gujarat), at this stage.

14....On the contrary, we are of the firm opinion that

computerization in every Department is objected with a view to

facilitate easy access to the assessee and make the system more

viable and transparent. In the event of any shortcoming of software

programme or any genuine mistake, the Department is expected to

respond to such inadvertence spontaneously by rectifying the

mistake and give corresponding relief to the assessee. Instead of

that, even when it is being brought to the notice of the Department

by the assessee, by a rectification application and subsequent

communication, not only it has chosen not to rectify the mistake,

but, the lack of inter departmental coordination has driven the

assessee to this Court for getting his legitimate due. This attitude

for sure does not find favour with the Court, as more responsive

and litigant centric system is expected; particularly in the era of

computerization. Tax payers friendly regime is promised in this

electronic age. For want of necessary coordination between the two

departments, the assessee cannot be expected to be sent from pillar

to the post.

14.1 Thus, from the discussion above, it can be very well said that

the respondent no. 2 has failed to perform its duty as provided

under section 154 (of Income Tax Act, 1961). When a glaring mistake was pointed

out to the authority, it ought to have amended the order of

assessment by exercising powers under section 154 (of Income Tax Act, 1961), which

in the present case, the authority failed to exercise and

consequently, the petitioner was compelled to approach this Court

by way of the present petition.

We could not resist ourselves from taking note of details provided in

the official website of Income tax Department which reveals the

extension of computerization in the department so far and their

vision for the same in this field. With a view to improve the

efficiency and effectiveness of Direct Taxes administration and to

create a database on its various aspects, a Comprehensive

Computerization programme was approved by the Government in

October 1993. In accordance with the programme, computerization

was taken up on a threetier system. In the apex level, a National

Computer Centre [NCC] having large computers to maintain data

base and to execute processing work of a global nature was

envisaged. At the second level, 36 Regional Computer Centres

[RCCs] were to be established across the country equipped with

large computers to maintain regional databases and to cater to

regional processing needs. All the RCCs were to be connected to the

National Computerization Centre through high speed data

communication lines. At the third level, computers were to be

installed in the rooms of all the Assessing Officers and connected

with the respective Regional Computer Center for data/information

exchange, in a phased manner. Accordingly, in the first phase,

Delhi, Mumbai and Chennai City regions were taken up and

provided with state of art hardware and software connected with

RCC, through intercity and intracity linkages. After stabilizing of

the computer systems in the 3 RCCs, computerization of 33 other

centres covering the rest of the country was taken up in the second

phase.

The Director General of Income Tax [Systems], {DIT [S]}, New Delhi was

made the main nodal authority for overall planning and implementation

of the computerization programme; including procurement of hardware

and software and development/installation of application software. In

addition, at each RCC, the Chief Commissioner of Income Tax [CCIT] was

required to monitor and coordinate with the DIT [S]. He would be

assisted by CIT [Computer Operations] who would monitor the

functioning of the RCC.

The main objectives of the computerization programme, as approved by

the Committee on NonPlan Expenditure [CNE], were (a) to improve the

efficiency and effectiveness of tax administration; (b) to ensure timely

availability and utilization of information; (c) to reduce compliance

burden on honest tax payers; (d) to enhance equitable treatment of tax

payers of incometax and procedures; (e) to ensure better enforcement of

tax laws; (f) to provide management with reliable and accurate

information in time so as to assist them in tax planning and legislation

and also in decision making; (g) to broaden th tax base; and (h) to keep

the cost of administration at an acceptable level over a period of time.

15.1 Thus, computerization of the Income Tax Department when

has undergone the exercise of a comprehensive business process re-

engineering, it is expected that Departments wish to herald Tax

payers friendly regime becomes the reality. A paradigm shift is

programmed as tax payers population has been growing

exponentially, ushering all the imperative changes and

modernization of administration.

15.2 If the Centralized Processing Center meant for return

processing, accounts, refund, storage of data etc. adds to the

difficulties of the Tax payers, due to lack of distribution of work

between back office and front office, and that too, after having been

pointed out the actual error, a serious relook is expected.

55. While examining the CBDT's powers exercisable under section 119 (of Income Tax Act, 1961) of

the Act, of course, in some other context, the Apex Court has held and

observed thus:

9. What is the status of these circulars? Section 119(1) (of Income Tax Act, 1961) of the

Incometax Act, 1961 provides that, "The Central Board of Direct

Taxes may, from time to time, issue such orders, instructions and

directions to other Incometax authorities as it may deem fit for the

proper administration of this Act and such authorities and all other

persons employed in the execution of this Act shall observe and

follow such orders, instructions and directions of the Board.

Provided that no such orders, instructions or directions shall be

issued (a) so as to require any Incometax authority to make a

particular assessment or to dispose of a particular case in a

particular manner: or (b) so as to interfere with the discretion of

the Appellate Assistant Commissioner in the exercise of his

appellate functions." Under subsection (2) of Section 119 (of Income Tax Act, 1961) without

prejudice to the generality of the Board's power set out in sub-

section (1) a specific power is given to the Board for the purpose of

proper and efficient management of the work of assessment and

collection of revenue to issue from time to time general or special

orders in respect of any class of incomes or class of cases setting

forth directions or instructions, not being prejudicial to assesses, as

the guidelines, principles or procedures to be followed in the work

relating to assessment. Such instructions may be by way of

relaxation of any of the provisions of the sections specified there or

otherwise. The Board thus has power, inter alia, to tone down the

rigour of the law and ensure a fair enforcement of its provisions, by

issuing circulars in exercise of its statutory powers under Section

119 of the Incometax Act which are binding on the authorities in

the administration of the Act. Under Section 119(2)(a) (of Income Tax Act, 1961) however,

the circulars as contemplated therein cannot be adverse to the

assessee. Thus, the authority which wields the power for its own

advantage under the Act is given the right to forego the advantage

when required to wield it in a manner it considers just by relaxing

the rigour of the law or in other permissible manners as laid down

in Section 119 (of Income Tax Act, 1961). The power is given for the purpose of just, proper

and efficient management of the work of assessment and in public

interest. It is a beneficial power given to the Board for proper

administration of fiscal law so that undue hardship may not be

caused to the assessee and the fiscal laws may be correctly applied.

Hard cases which can be properly categorised as belonging to a

class, can thus be given the benefit of relaxation of law by issuing

circulars binding on the taxing authorities.

55.1 Thus as held by the Apex Court the powers given to the Board 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 the work of assessment and the

public interest.

56. Not that the Revenue is not alive to the vital importance of TAR in

filing the ITR and the possible complications and genuine hardship that

may arise in future in all those tax returns filed without the aid of TAR,

however, noncollection of the tax for a period of two months and possible

loss of Rs.220 crore in terms of interest for a period of two months in the

event the selfassessed tax not paid, appear clearly as the reasons in the

foundation for CBDT to deny such extension. For the purpose of filing ITR

and furnishing TAR difference in due date possibly may lead many assesses

not to file the ITR without the aid of the TAR and thereby the angle of

gaining the interest under the provision of law for such late filing of the

returns would not have been missed by the Revenue. The Revenue can

surely safeguard the interest of both the collection of tax, as also of

possible loss of interest on the tax collected, the Revenue cannot be

permitted to take advantage of its own error or delay, by putting forth

magnified figures of loss and thereby also possibly in the process gaining

interest for late filing of return in complete disregard to requirement of

efficient management.

58. Consequences that would follow on account of the delay in filing the

return of income also are weighing factors for the Court to consider such

request. Being conscious of the fact that the writ of mandamus, which is

highly prerogative writ is for the purpose of compelling the authorities of

any official duties, officially charged by the law either refuses or fails to perform the same, the writ of mandamus is required to be used for the

public purpose,particularly, when the party has not other remedy

available. It is essentially designed to promote justice.

59. The Apex Court in the case of Secretary, Cannanore District Muslim

Educational Association, Karimbam v. State of Kerala and others,

reported in (2010) 6 SCC 373, while emphasizing the importance of

writ of mandamus and its applicability held and observed thus :

29. While dismissing the writ petition the Hon'ble High Court with

respect, had taken a rather restricted view of the writ of

Mandamus. The writ of Mandamus was originally a common law

remedy, based on Royal Authority. In England, the writ is widely

used in public law to prevent failure of justice in a wide variety of

cases. In England this writ was and still remains a prerogative writ.

In America it is a writ of right. (Law of Mandamus by S.S. Merrill,

Chicago, T.H. Flood and Company, 1892, para 62, page 71).

30.About this writ, SA de Smith in 'Judicial Review of Administrative

Action', 2nd edn., pp 378 and 379 said that this writ was devised

to prevent disorder from a failure of justice and defect of police and

was used to compel the performance of a specific duty. About this

writ in 1762 Lord Mansfield observed that 'within the past century

it had been liberally interposed for the benefit of the subject and

advancement of justice'.

31.The exact observations of Lord Mansfield about this writ has been

quoted in Wade's 'Administrative Law, Tenth Edition' and those

observations are still relevant in understanding the scope of

Mandamus. Those observations are quoted below :

"It was introduced, to prevent disorder from a failure of justice, and

defect of police. Therefore it ought to be used upon all occasions

where the law has established no specific remedy, and where in

justice and good Government there ought to be one.....The value of

the matter, or the degree of its importance to the public police, is

not scrupulously weighed. If there be a right, and no other specific

remedy, this should not be denied. Writs of mandamus have been

granted, to admit lecturers, clerks, sextons, and scavengers and c.,

to restore an alderman to precedency, an attorney to practice in an

inferior court, and c." (H.W.R. Wade and C.F. Forsyth:

Administrative Law, 10th Edition, page 52223).

32. De Smith in Judicial Review, Sixth Edition has also

acknowledged the contribution of Lord Mansfield which led to the

development of law on Writ of Mandamus. The speech of Lord

Mansfield in R v. Blooer, (1760) 2 Burr, runs as under :

"a prerogative writ flowing from the King himself, sitting in

his court, superintending the police and preserving the peace

of this country". (See De Smith's Judicial Review 6th

Edition, Sweet and Maxwell page 795 para 15 036.

33. Almost a century ago, Darling J quoted the observations in Rex

v. The Justices of Denbighshire, (1803) 4 East, 142, in The King v.

The Revising Barrister etc. {(1912) 3 King's Bench 518} which

explains the wide sweep of Mandamus. The relevant observations

are :

"...Instead of being astute to discover reasons for not

applying this great constitutional remedy for error and

misgovernment, we think it our duty to be vigilant to apply

it in every case to which, by any reasonable construction, it

can be made applicable...."

34. At KB page 531 of the report, Channell, J said about

Mandamus :

"It is most useful jurisdiction which enables this Court to set

fight mistakes".

35. In Dwarka Nath v. Income Tax Officer, Special Circle, D. Ward,

Kanpur and another AIR 1966 SC 81, a threeJudge Bench of this

Court commenting on the High Court's jurisdiction under Article

226 opined that this Article is deliberately couched in

comprehensive language so that it confers wide power on High

Court to 'reach injustice whenever it is found'. Delivering the

judgment Justice Subba Rao (as His Lordship then was) held that

the Constitution designedly used such wide language in describing

the nature of the power. The learned Judge further held that the

High Court can issue writs in the nature of prerogative writs as

understood in England; but the learned Judge added that the scope

of these writs in India has been widened by the use of the

expression "nature".

36. The learned Judge made it very clear that the said expression

does not equate the writs that can be issued in India with those in

England but only draws an analogy from them. The learned Judge

then clarifies the entire position as follows :

"4. ...It enables the High Courts to mould the reliefs to meet

the peculiar and complicated requirements of this country.

Any attempt to equate the scope of the power of the High

Court under Article 226 of the Constitution with that of the

English Courts to issue prerogative writs is to introduce the

unnecessary procedural restrictions grown over the years in

a comparatively small country like England with a unitary

form of Government to a vast country like India functioning

under a federal structure. Such a construction defeats the

purpose of the article itself...."

37. The same view was also expressed subsequently by this Court in

J.R. Raghupathy etc. v. State of A.P. and Ors. AIR 1988 SC 1681.

Speaking for the Bench, Justice A.P. Sen, after an exhaustive

analysis of the trend of Administrative Law in England, gave His

Lordship's opinion in paragraph (29) at page 1697 thus:

"30. Much of the above discussion is of little or academic

interest as the jurisdiction of the High Court to grant an

appropriate writ, direction or order under Article 226 of the

Constitution is not subject to the archaic constraints on

which prerogative writs were issued in England. Most of the

cases in which the English courts had earlier enunciated

their limited power to pass on the legality of the exercise of

the prerogative were decided at a time when the Courts took

a generally rather circumscribed view of their ability to

review Ministerial statutory discretion. The decision of the

House of Lords in Padfield's case (1968 AC 997) marks the

emergence of the interventionist judicial attitude that has

characterized many recent judgments."

38. In the Constitution Bench judgment of this Court in Life

Insurance Corporation of India v. Escorts Limited and others,

[(1986) 1 SCC 264] : (AIR 1986 SC 1370), this Court expressed

the same opinion that in Constitution and Administrative Law, law

in India forged ahead of the law in England (para 101, page 344).

39. This Court has also taken a very broad view of the writ of

Mandamus in several decisions. In the case of The Comptroller and

Auditor General of India, Gian Prakash, New Delhi and another v.

K.S. Jagannathan and another (AIR 1987 SC 537), a threeJudge

Bench of this Court referred to Halsbury's Laws of England, Fourth

Edition, Volume I paragraph 89 to illustrate the range of this

remedy and quoted with approval the following passage from

Halsbury about the efficacy of Mandamus :

"89. Nature of Mandamus: ... is to remedy defects of justice

and accordingly it will issue, to the end that justice may be

done, in all cases where there is a specific legal right and no

specific legal remedy for enforcing that right, and it may

issue in cases where, although there is an alternative legal

remedy yet that mode of redress is less convenient beneficial

and effectual." (See para 19, page 546 of the report)

In paragraph 20, in the same page of the report, this Court further

held :

"20. ...and in a proper case, in order to prevent injustice

resulting to the concerned parties, the Court may itself pass

an order or give directions which the Government or the

public authority should have passed or given had it properly

and lawfully exercised its discretion."

40.In a subsequent judgment also in Shri Anadi Mukta

Sadguru Shree Muktajee Vandasjiswami Suvarna Jayanti

Mahotsav Smarak Trust and Ors. v. V.R. Rudani and Ors.

AIR 1989 SC 1607, this Court examined the development of

the law of Mandamus and held as under :

"22. ...mandamus cannot be denied on the ground that the

duty to be enforced is not imposed by the statute.

Commenting on the development of this law, Professor De

Smith states: "To be enforceable by mandamus a public duty

does not necessarily have to be one imposed by statute. It

may be sufficient for the duty to have been imposed by

charter common law, custom or even contract." (Judicial

Review of Administrative Act 4th Ed. P. 540). We share this

view. The judicial control over the fast expanding maze of

bodies affecting the rights of the people should not be put

into watertight compartment. It should remain flexible to

meet the requirements of variable circumstances. Mandamus

is a very wide remedy which must be easily available 'to

reach injustice wherever it is found'. Technicalities should

not come in the way of granting that relief under Article

226. We, therefore, reject the contention urged for the

appellants on the maintainability of the writ petition." (See

page 1613 para 21).

60. Keeping in mind the scope of writ jurisdiction as detailed in the

decision hereinabove, these petitions deserve consideration. In absence of

any remedy available, much less effective to the stakeholders against the

nonuse of beneficial powers by the Board for the larger cause of justice,

exercise of writ jurisdiction to meet the requirements of circumstances has

become inevitable.

61. Here, we notice that subsequent to the representation made on 21st

August, 2014, the CBDT could have responded to such representation by

either acceding or refusing to the request of extending the period of filing

of ITR and making it extendable upto 30th November, 2014. Ordinarily, in

such circumstances, the Court would direct the authority to consider the

representation and pass a specific order. In wake of the constrains of time,

as the due date of the filing of the return is expiring on 30th September,

2014 and when the respondent Board has chose not to respond to the

same, but, later on by offering the comments before this Court in writing

in no uncertain terms, it has termed such a request impermissible and has

chosen to refuse the same on the ground that all the grievance made by the

petitioners are not sustainable. Therefore, considering the larger cause of

public good and keeping in mind the requirement of promotion of justice,

we chose to exercise the writ of mandamus directing the CBDT to extend

the date of filing of return of income to 30th November, 2014, which is due

date for filing of the TAR, as provided in the Notification dated 20th

August, 2014.

64. We are not inclined to stay new utility for one year as sufficient

measures are already taken by the Board to redress this grievance.

However, it needs to be observed at this juncture that any introduction or

new utility/software with additional requirement in the middle of the year

ordinarily is not desirable. Any change unless inevitable can be planned

well in advance, keeping in focus that such comprehensive process re-

engineering may not result in undue hardship to the stakeholders for

whose benefit the same operates.

76. Besides, no grave prejudice would be caused to the revenue if the

due date for filing the return of income is also extended till the date of

filing of the tax audit report, whereas the assessee would be visited with

serious consequences as referred to hereinabove in case of nonfiling of

return of income within the prescribed period as he would not be in a

position to claim the benefit of the provisions referred to hereinabove.

The apprehension voiced by the revenue that in case due date for filing

return of income is extended, due date for selfassessment also gets

automatic extension, resulting into delay in collection of selfassessment

tax which is otherwise payable in September, 2014, can be taken care of

by providing that the due date shall stand extended for all purposes,

except for the purposes of Explanation 1 to section 234A (of Income Tax Act, 1961).”

20. In the second judgement, in the case of All Gujarat Federation of

Tax Consultants (supra), this Court observed as under:

“11.1 The controversy involved in the present case lies in a very narrow

compass. The petitioners and other assessees covered under the categories

to which the petition relates, are ordinarily required to file their returns of income any time from 1st April till 30th September of the relevant

assessment year. By virtue of rule 12 (of Income Tax Rules, 1962), all the assessees have to file the income tax returns electronically, that is, online. For this purpose,the corresponding utility relating to each category of assessees in the nature of Forms No.ITR3, ITR4, ITR5, ITR6 and ITR7 are required to

be provided by the respondents. It is an admitted position that in the year

under consideration, the relevant utility has been provided only with effect

from 7th August, 2015. Therefore, prior to 7th August, 2015, it was not

possible for any of the assessees who were required to file income tax

returns in the above referred forms, to file their returns of income.

Therefore, while in the ordinary course, the assessees falling in the above

categories have a period of 180 days to compile relevant details and to file

the income tax returns by 30th September, in view of the fact that the

utility for filing the income tax returns has been furnished only on 7th

August, 2015, such period stands substantially curtailed. Having regard to

the difficulties faced by the Chartered Accountants and other professionals

as well as the assessees, the petitioners made representations to the

respondent Board for exercising powers under section 119 (of Income Tax Act, 1961) and

extending the due date for filing the income tax returns prescribed under

Explanation 2 to section 139 (of Income Tax Act, 1961). However, by the announcement

dated 9th September, 2015, such request has been turned down and it has

been stated that the last date for filing of returns being 30th September,

2015 will not be extended. As noticed hereinabove, in case of other

categories of assessees who are required to file tax returns in Form ITR1,

ITR2, ITR2A, ITR4S, in whose case also, there was a delay in furnishing

the necessary utility, the Board had extended the due date for filing the

income tax returns. The stand of the Board is that the period of seven

weeks which is available to the petitioner and other assessees for filing

online income tax returns, is sufficient and therefore, there is no reason for extending the due date for filing the income tax returns.

12. While it is true that the powers under section 119 (of Income Tax Act, 1961) are

discretionary in nature and it is for the Board to exercise such powers as

and when it deems fit. However, it is equally true that merely because such

powers are discretionary, the Board cannot decline to exercise such powers

even when the conditions for exercise of such powers are shown to exist. At

this juncture reference may be made to the decision of the Supreme Court

in the case of UCO Bank v. CIT, (1999) 4 SCC 599?/I> (1999) 237 ITR

889, wherein the court had occasion to interpret section 119 (of Income Tax Act, 1961).

The court held thus:

9. What is the status of these circulars? Section 119(1) (of Income Tax Act, 1961) of the

Income Tax Act, 1961 provides that:

119. (1) The Central Board of Direct Taxes may, from time to time,

issue such orders, instructions and directions to other Income Tax

Authorities as it may deem fit for the proper administration of this

Act, and such authorities and all other persons employed in the

execution of this Act shall observe and follow such orders,

instructions and directions of the Board:

Provided that no such orders, instructions or directions shall be

issued

(a) so as to require any Income Tax Authority to make a particular

assessment or to dispose of a particular case in a particular

manner; or

(b) so as to interfere with the discretion of the Appellate Assistant

Commissioner in the exercise of his appellate functions.

(emphasis supplied)

Under subsection (2) of Section 119 (of Income Tax Act, 1961), without prejudice to the

generality of the Boards power set out in subsection (1), a specific

power is given to the Board for the purpose of proper and efficient

management of the work of assessment and collection of revenue to

issue from time to time general or special orders in respect of any

class of incomes or class of cases setting forth directions or

instructions, not being prejudicial to assessees, as the guidelines,

principles or procedures to be followed in the work relating to

assessment. Such instructions may be by way of relaxation of any

of the provisions of the sections specified there or otherwise. The

Board thus has power, inter alia, to tone down the rigour of the

law and ensure a fair enforcement of its provisions, by issuing

circulars in exercise of its statutory powers under Section 119 (of Income Tax Act, 1961) of the

Income Tax Act which are binding on the authorities in the

administration of the Act. Under Section 119(2)(a) (of Income Tax Act, 1961), however, the

circulars as contemplated therein cannot be adverse to the assessee.

Thus, the authority which wields the power for its own advantage

under the Act is given the right to forego the advantage when

required to wield it in a manner it considers just by relaxing the

rigour of the law or in other permissible manner as laid down in

Section 119 (of Income Tax Act, 1961). The power is given for the purpose of just, proper and

efficient management of the work of assessment and in public

interest. It is a beneficial power given to the Board for proper

administration of fiscal law so that undue hardship may not be

caused to the assessee and the fiscal laws may be correctly applied.

Hard cases which can be properly categorised as belonging to a

class, can thus be given the benefit of relaxation of law by issuing

circulars binding on the taxing authorities.

13. Thus, the power under section 119 (of Income Tax Act, 1961) is a beneficial power

given to Board for proper administration of fiscal law so that undue

hardship may not be caused to the assessee and the fiscal laws may be

correctly applied. In the case at hand, as is evident from the facts noted

here in above, in the normal course, assessees who are subject to audit as

well as other categories of assessees referred to here in above, can file their returns of income from 1st April to 30th September of the year in question.

In view of the provisions of rule 12 (of Income Tax Rules, 1962), whereby, the assessees who are subject to tax audit, as well as the assessees referred to here in above,are required to file the tax returns electronically, that is, online.

However,for filing the tax returns, appropriate utility is required to be made available by the respondents to the assessees. Therefore, till such utility is provided by the respondents, it is not possible for the assessees to file their returns of income. Therefore, there is a duty cast upon the respondents to ensure that necessary utility for efiling of the income tax returns is made available to various categories of assessees at the beginning of the assessment year so that the assessees can plan their tax matters accordingly. However, as noted here in above, the utilities for efiling of returns have been made available only with effect from 7th August, 2015,thereby curtailing the time available for filing the income tax returns to a great extent. According to the petitioners, such curtailment of time causes immense hardship and prejudice to the petitioners and other assessees

belonging to the above categories, whereas the respondent Board, on the

other hand, has taken an adamant stand not to extend the time for efiling

of the returns despite the fact that the entire situation has arisen on

account of default on the part of the Department and not the assessees.

14. It may be recalled that in relation to assessment year 201415, the

respondent Board had extended the time for filing the tax audit reports,

but had not extended the time for filing the returns and the petitioners

were constrained to approach this court for extension of the due date for

filing return of income. In that case, this court has, inter alia, observed

thus :

50. We are also actuated by the fact that the entire situation is

arising not on account of any contribution on the part of either the

professionals or the assesses leading to such a situation. In the

present case, with the advancement of the technology, it is always

commendable that the department takes recourse to the technology

more and more. With the possible defects having been found in

utility software in use in the previous year, the required changes in

the clarification or the new format of such utility, if brought to the

fore, the same would be desirable. At the same time, the complete

black out for nearly a months time would not allow accessibility to

such utility software to the assessees, which has put them to a great

jeopardy.

53. The CBDT derives its powers under the statute which enjoins

upon the Board to issue from time to time such orders, instructions

and directions to other incometax authorities if found expedient

and necessary for proper administration of the Act. Without

prejudice to the generality of powers provided under subsection (1)

of section 119 (of Income Tax Act, 1961), the CBDT also has specific powers to pass

general or special orders in respect of any class or class of cases by

way of relaxation of any of the provisions of section, which also

includes section 139 (of Income Tax Act, 1961). If the Board is of the opinion that it

is necessary in the public interest to so do it. For avoiding the

genuine hardship in any case or class of cases, the CBDT if

considers desirable and expedient, by general or special order, it

can issue such orders, instructions and directions for proper

administration of this Act. All such authorities engaged in

execution of the Act are expected to follow the same. Any

requirement contained in any of the provisions of Chapter IV or

Chapter VIA also can be relaxed by the CBDT for avoiding genuine

hardship in any case or class of cases by general or special orders.

This provision, therefore, gives very wide powers to the CBDT to

pass general or special orders whenever it deems it necessary or

expedient to so do it in respect of any class of income or class of

cases. It has not only to see the public interest for so doing, but also

for avoiding the genuine hardship in any particular case or class of

cases, such powers can be exercised.

54. Reverting to the matters on hand, a very peculiar situation has

arisen portraying the genuine hardship to the assessee, as also to

the tax consultants, by way of representations made to the Board,

it would have been desirable and expedient on the part of the CBDT

to have considered such request and exercise the powers by way of a

relaxation. What all that has been sought is to make the due date

for filing the tax return harmonious with the filing of the TAR and

without jeopardizing the issue of collection of tax, it was not

impossible to exercise such powers of relaxation of provision

prescribing extension of the due date.

55.While examining the CBDT's powers exercisable under section 119 (of Income Tax Act, 1961)

of the Act, of course, in some other context, the Apex Court has held

and observed thus:

9. What is the status of these circulars? Section 119(1) (of Income Tax Act, 1961) of the

Income tax Act, 1961 provides that, "The Central Board of Direct

Taxes may, from time to time, issue such orders, instructions and

directions to other Income tax authorities as it may deem fit for the

proper administration of this Act and such authorities and all other

persons employed in the execution of this Act shall observe and

follow such orders, instructions and directions of the Board.

Provided that no such orders, instructions or directions shall be

issued (a) so as to require any Income tax authority to make a

particular assessment or to dispose of a particular case in a

particular manner: or (b) so as to interfere with the discretion of

the Appellate Assistant Commissioner in the exercise of his

appellate functions." Under sub-section (2) of Section 119 (of Income Tax Act, 1961) without

prejudice to the generality of the Board's power set out in sub-

section (1) a specific power is given to the Board for the purpose of

proper and efficient management of the work of assessment and

collection of revenue to issue from time to time general or special

orders in respect of any class of incomes or class of cases setting

forth directions or instructions, not being prejudicial to assesses, as

the guidelines, principles or procedures to be followed in the work

relating to assessment. Such instructions may be by way of

relaxation of any of the provisions of the sections specified there or

otherwise. The Board thus has power, inter alia, to tone down the

rigor of the law and ensure a fair enforcement of its provisions, by

issuing circulars in exercise of its statutory powers under Section

119 of the Income tax Act which are binding on the authorities in

the administration of the Act. Under Section 119(2)(a) (of Income Tax Act, 1961) however,

the circulars as contemplated therein cannot be adverse to the

assessee. Thus, the authority which wields the power for its own

advantage under the Act is given the right to forgo the advantage