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Gujarat High Court directs CBDT to take appropriate decision on extension of Due date for Tax Audit Reports & Income Tax Returns
January, 11th 2021

The Gujarat High Court directed the respondent, CBDT to take appropriate decision regarding extension of Due date for Tax Audit Reports (TAR) and Income Tax Returns (ITR) by 12 January, 2021.

Mr. S. N. Soparkar, the Senior Counsel for the writ applicant, Gujarat Federation of Tax Consultants submitted that having regard to the COVID-19 pandemic situation, the CBDT 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 urged the 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 the Income Tax 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 filing the ITR and  tax audit report in case of assessees whose accounts are required to be audited.


Mr. Soparkar said that in line with the reality of pandemic and due to orders and directives for workplaces 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 October 30, 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.

The Division bench of Justice J.B.Pardiwala and Justice Ilesh J. Vora said that the respondent authority must bear in mind that the powers given to the CBDT 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.

“One additional aspect needs to be kept in mind before taking any appropriate decision that the time period for the officials of the tax department has been extended upto 31st March 2021 having regard to the current covid­19 pandemic situation. If that be so, then some extension deserves to be considered in accordance with law. Let an appropriate decision be taken by 12th January 2021,” the court said.

The court posed the matter on 13th January 2021 for the next hearing, so that Mr. Patel, the Senior Standing Counsel appearing for the respondents shall apprise the Court of any decision or development in the matter.

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