'Govt Needs Revenue To Carry Out Relief Work For Poor In These Difficult Times': CBDT Declines Further Extension Of Due Dates For Filing ITRs

"Filing of tax returns/audit reports are essential part of the 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 assesscee. Filing of tax returns by assessee also results in collections of taxes either through payment of self-assessment tax by the assessee 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 other welfare functions of the state for the vulnerable and weaker sections of society which is funded through the revenue collected. 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," the authority said.

The last dates for filing (i) Returns (for non-audit cases) is January 10, 2021; (ii) Tax Audit is January 15, 2021; and (iii) Returns (for tax audit cases) is February 15, 2021.

Last week, the Gujarat High Court had directed the Board to take a decision on representations seeking extension of due dates by January 12.

The Board has given the following reasons for rejecting these representations:

The due dates for filing of return/tax audit have already been extended on 3 occasions

The Board was of the opinion that the Government has not only considered representations of various stakeholders but also has been proactive in providing relaxation to the taxpayers by extending due dates regularly.

Significantly, the due dates were first extended vide the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 to 30th November, 2020. Subsequently, the due dates for filing of returns were further extended to 31st January, 2021 for cases in which tax audit report is required to be filed and 31^st December, 2020 for all other cases. Further, the above due dates were again extended to 15^th February, 2021 and 10^th January, 2021 respectively.

Internationally, the extension provided by India is more generous as compared to other countries

The Board compared the extensions granted by it with those granted by other economies like USA, UK, Singapore, etc. and concluded,

"Government of India has been very empathetic to the needs of the taxpayers as compared various other countries. It is apparent from the table no other country has extended the due dates as much as India. Even countries which are comparatively worse hit by COVID-19, like the USA, UK etc., have provided no or lesser extensions in due dates."

Return filing statistics of the current year indicates that returns filed in this financial year already far exceeds the returns filed which were due on the last date of filing of returns

Inter alia, the Board compared the number of filings made by assesses this AY till date, with the number of returns filed last year and observed that the number of returns filed this year has already exceeded the number of returns filed last year up to 31st August which was the last day of filing of the all the returns other than the company/tax audit returns, by about 6%.

Moreover, for AY 2019-20, 24% of total audit reports were filed in last 3 days before the due date. "Therefore, lesser filing compliances having been made much before the due date cannot be said to be an anomalous situation," the Board said.

Fixing due dates is exclusive domain of the executive

The CBTD is of the view that any further extension would adversely affect the return filing discipline and shall also 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.

It relied on the Supreme Court's judgment in Govt. of AP v. N. Subbarayudu, (2008) 14 SCC 702, where it was held that,

"the cut-off date is fixed by the executive authority keeping in view the economic conditions, financial constraints and many other administrative and other attending circumstances… fixing cut-off dates is within the domain of the executive authority and the court should not normally interfere with the fixation of cut-off date by the executive authority unless such order appears to be on the face of it blatantly discriminatory and arbitrary.

There may be various considerations in the mind of the executive authorities due to which a particular cut-off date has been fixed. These considerations can be financial, administrative or other considerations. The court must exercise judicial restraint and must ordinarily leave it to the executive authorities to fix the cut-off date. The Government must be left with some leeway and free play at the joints in this connection."

Similarly, the Board referred to a catena of judgments of the Supreme Court where it has been held that the choice of a cut-off date cannot be dubbed as arbitrary even if no particular reason is given for the same in the counter affidavit filed by the Government, (unless it is shown to be totally capricious or whimsical).

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