F.NO. 370153/ 39J2020-TPL
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
(CENTRAL BOARD OF DIRECT TAXES)
(TAX POLICY AND LEGISLATION DIVISION)
New Delhi, 11th January, 2021.
ORDER UNDER SECTION 119 OF INCOME TAX ACT, 1961
The Hon’b1e Gujarat High Court vide judgement dated 8th January, 2021 in the case of The All India Gujarat Federation of Tax Consultants Vs. Union of India, SCA 13653 of 2020, has directed the Ministry of Finance to look into the issue of extension of due dates for filing of Audit Report under section 44AB of the Income tax Act m‹ re particularly the representation dated 12.10.2020 and take an appropriate decision in accordance with law.
2. In the wake of the global pandemic due to COVID-19 the due dates for filing of income tax returns for A.Y. 2020-21 was extended vide the Taxation and Other laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (which was enacted on 29th September,2020) to 30th November, 2020. Subsequently, vide notification S.O. 3906(E) dated 29a October, 2020 the due dates for filing of returns were further extended to 31st January, 2021 for cases in which tax audit report under section 44AB of the Income tax Act (“the Act”) is required to be filed and 31St December, 2020 for all other cases. Further vide notification S.O. 4805 (E) dated 31st December, 2020 the above due dates were further extended to 15th February, 2021 and 10th January, 2021 respectively.
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3. As per the provisions of the Act the due date for filing of the audit report under section 44AB is one month prior to the due date of fi1ing of income tax return. Therefore, the said due date was extended to 31st October, 2020 vide the Taxation and Other laws (Relaxation and Amendment of Certain Provisions) Act, 2020, 31st December, 2020 vide notification S.O. 3906(E) dated 29th October, 2020 and further to 15th January, 2020 vide notification S.O. 4805 (E) dated 31st December, 2020.
4. The due dates for payment of self-assessment tax, for taxpayers whose amount due does not exceed rupees one lakh, also coincide with the due dates for filing of income tax returns. The table below summarises the various due date extensions given:-
S. No. | Action | Original Due Date | 1st Extension vide TOLA, 2020 | 2nd Extension vide notification S.O. 3906 (E) dated 29.10.2020 | Extension vide notification s.o. 4805 (E) dated 31.12.2020 |
| 1. | Return for Non-Audit Cases | 31.07. 2020 | 30.11.2020 | 31.12.2020 | 10.01.2021 |
| 2. | Tax Audit | 30.09.2020 | 31.10.2020 | 31.12.2020 | 15.01.2021 |
| 3. | Return for Tax Audit cases | 31. 10.2020 | 30.11.2020 | 31.01.2021 | 15.02.2021 |
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5. Thus, it is apparent 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. The table below gives the statistical data comparing the return filing statistics of A.Y. 2019-20 and A.Y. 2020-21
| Date – This year | AY 20-21 ITRs filed | Daily figures | Date -Last year | AY 19-20 ITRs filed | Daily Figures |
| 05- Jan-21 | 5,08,48,022 | 7,26, 177 | 26-Aug-19 | 4,14, 13,558 | 13,65,348 |
| 06- Jan-21 | 5,16,71,398 | 8,23,376 | 27-Aug-19 | 4,30,99,600 | 16,86,042 |
| 07- Jan-21 | 5,27, 14,75 1 | 10,43,353 | 28-Aug-19 | 4,5 1,44,749 | 20,45, 149 |
| 08- Jan-21 | 5,41,54,435 | 14,39,68d | 29-Aug-19 | 4,77,39,460 | 25,94,71 1 |
| 09- Jan-21 | 5,64, 10,561 | 22,56, 126 | 30-Aug-19 | 5,12,55,607 | 35, 16, 147 |
| 10- Jan-21 | 5,95,15,322 | 31,04,761 | 3I—Aug— 19 | 5,6 1,79,905 | 49,24,298 |
From the above table, it is apparent 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%.
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The table below gives the statistical data comparing the filing statistics of tax audit report for A.Y. 2019-20 and A.Y. 2020-21-
| Date | Form 3CA | Form 3CB | Date | Form 3CA | Form 3CB |
| 2O-Oct- 19 | 2,741 | 29,76O | 04-Jan-21. | 3,079 | 27,492 |
| 21-Oct-19 | 5,598 | 51,069 | 05-Jan-21 | 3,238 | 28,875 |
| 22-Oct-19 | 7,626 | 62,938 | 06- Jan-21 | 3,190 | 30,582 |
| 23-Oct-19 | 9,125 | 75,031 | 07- Jan-21 | 3,323 | 31,035 |
| 24-Oct-19 | 10,977 | 87,350 | 08- Jan-21 | 3,316 | 29,92d |
| 25-Oct-19 | 11,841 | 93,575 | 09- Jan-21 | 2,82d | 26,097 |
| 26-Oct-19 | 10,366 | 91,397 | 10- Jan-21 | 1,416 | 16,370 |
| 27-Oct-19 | 2,309 | 30,861 | 11-Jan-21 | ||
| 28-Oct- 19 | 6,138 | 59,785 | 12-Jan-21 | ||
| 29-Oct-19 | 10, 119 | 1,00,569 | 13-Jan-21 | ||
| 30-Oct-19 | 23, 125 | 1,87,444 | 14-Jan-21 | ||
| 31-Oct-19 | 42,280 | 3,15,190 | 15-Jan-21 | ||
| Grand Total cumulative | 2,88,236 | 25,37,444 | Grand Total cumulative | 2,14,804 | 18,49,461 |
6. The above table also show that majority of the audit reports under section 44AB of the Act as well as income tax returns are filed within the last few days of the dates only. For A.Y. 2019-20 it is seen that 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.
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7. A look at the relaxation of similar nature provided by other economies globally makes it clear that the 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.
The table below lists such extensions given by a few countries: –
| Country | Financial Period | INDIVIDUAL Due date | INDIVIDUAL Extended due date | CORPORATE Due date | CORPORATE Extended due date |
| USA | 2019 | 15th April, 2020 | 15th October, 2020 | 15th 2020 April, | 15th October, 2020 |
| UK | 2019- 2020 | 31 January 2021 | No extension | 31st December, 2020 | No extension |
| Australia | 2018 -2019 | 5th May, 2020 | 5th June, 2020 | 15th May, 2020 | 5th June, 2020 |
| South Africa | 2019 | 16 th November, 2020 | No extension | 3 1st December, 2020 | No extension |
| Netherlands | 2019 | 1st May, 2020 | No extension | 1st June, 2020 , | No extension |
| Ireland | 2019 | 12 November, 2020 | 10th December, 2020 | 12th November, 2020 | 10 th December, 2020 |
| Singapore | 2019 | 18th April, 2020 | 3 l s t May, 2020 | 15th December, 2020 | 15th January, 2020 |
| Canada | 20 19 | 30th April, 2020 | 30 th September 2020 | May -August 2020. | 30th September, 2020 |
| Brazil | 2019 | 1st March, 2020 | 30 th 2020 April, | 30th 2020 April, | 30th 2020 June, |
8. From the above it may be seen that 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 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 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.
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9. From the above discussion, it is apparent that,-
- The clue dates for filing of return/tax audit have already been extended on 3 occasions.
- Internationally, the extension provided by India is more generous as compared to other countries.
- The 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.
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.
10. In this regard, the decisions of the Hon’ble Supreme Court have also been considered. The Hon’ble Supreme Court in the case of Govt. of A.P. v. N. Subbarayudu, (2008) 14 see 702 at page 703:
“5. In a catena of decisions of this Court it has been 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. This Court is also of the view that 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. (See State of Punjab v. Amar Nath Goyal [(2005) 6 SCC 754: 2005 SCC (L&S) 91 OJ.
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7. There may be various considerations In the mind of the executive authorities due to which a particular cut-off date has been faced. 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.
8. In fact several decisions of this Court have gone to the extent of saying 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), vide State of Bihar v. Rarnjee Prasad [(1990) 3 SCC 368: 1991 SCC (L&S) 51J, Union of India v. Sudhir Kumar Jaiswal [(1994) 4 SCC 212: 1994 SCC (L&S) 925: (1 994) 27 ATC 561J (vide SCC para 5), Ramrao v. All India Backward Class Bank Employees Welfare Assn. [(2004) 2 SCC 76 : 2004 SCC (L&S) 337J (vide SCC para 31), University Grants Commission v. Sadhana Chaudhary [(1996) 10 SCC 536 : 1996 SCC (L&S) 1431 J , etc. It follows, therefore, that even if no reason has been given in the counter-affidavit of the Government or the executive authority as to why a particular cut-off date has been chosen, the court must still not declare that date to be arbitrary and violative of Article 14 unless the said cut-off date leads to some blatantly capricious or outrageous result.”
11. In fact, several decisions of the Hon’ble Supreme Court have gone to the extent of saying 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). [State of Bihar vs. Ramjee Prasad 1990(3) SCC 368, Union of Indian & Anr. vs. Sudhir Kumar JaiswaI1994(4) SCC 212 (vide para 5), Ramrao & Ors. vs. All India Backward Class Bank Employees Welfare Association & Ors. 2004 (2) SCC 76 (vide para 31), University Grants Commission vs. Sadhana Chaudhary & Ors. 1996(10) SCC 536, etc .] When it is seen that a line or a point there must be and there is no mathematical or logical way of fixing it precisely, the decision of the legislature or its delegated must be accepted unless it can be said that it is very wide off the reasonable mark. (See Union of India & Anr. v. Mis Parameshwaran match works Ltd., 1975 (2) SCR 573, at p. 579; and Dr. (Mrs.) Sushma Sharma etc. etc. v. State of Rajasthan n & Ors. 1985 (3) SCR 243, at p. 269)
12. In view of the above reasons, all the representations for further extension of the due date are hereby rejected.
Under Secretary (TPL-IV)
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