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Un necessary un-certainty, harassment and litigation due to half hearted decision of CBDT to extend date to file Tax Audit Report without extending date for filing of Return of income.
September, 26th 2014

Tax audit report (TAR): Can obtain and file TAR by 30th November 2014 what about ROI? Webhosted on 23.08.2014.

In earlier article “Tax audit report (TAR) -Can obtain and file TAR by 30th November 2014 – what about ROI? “ the author had expressed views that extension of due date to obtain and file TAR must necessarily lead to extension of due date for filing of the ROI, in cases where TAR is applicable. Many other related issues were also discussed. With help of some other provisions it was also pointed out that when a report is required to be obtained and/ or filed with the ROI or before filing of ROI, then law contemplates that due date for filing of ROI should be after the date for obtaining of such reports.

The reason is that preparation of return itself is dependent on compilation of information and examination of the same by auditors for ascertaining authenticity, so that amounts are stated in the ROI based on such report.

Revised from of TAR were notified late:

It is well known that problem arose because revised form of TAR were notified quite late, during peak season of preparation of TAR. In fact many tax practioners who have more alert clients use to finalize tax audit much earlier and many  assessees had obtained tax audit report and filed the same. The assessee who obtained but did not file the TAR are also sufferer because they need to obtain TAR in revised form. This issue was discussed in earlier article, hence not repeated.

It is worth to notice that revised Form 3CA, 3CB  AND 3CD were  amended vide notification no 33/ 2014  dated 25.07.2014  with effective from 25.07.2014.

Therefore, if one can find fault, it is with CBDT that revised TAR form was notified late. For delay on part of CBDT, why tax payers should suffer.

TAR and computation of income and preparation of ROI:

Audited accounts is annexed to TAR. TAR contains many information which are vital for the purpose of computation of gross total income (GTI), exemptions, statutory deductions of various allowances,  disallowable expenses, allowable expenses, deductions from GTI  under Chapter VIA in respect of certain incomes and investments etc. Some other information are also required in the TAR which may not have direct link to computation but have concern with furnishing of information in ROI. Therefore, audit of accounts and obtaining of TAR are preconditions for preparation of computation of income and  ROI. 


Author also require TAR from clients to review the computation of income. For review of  computation and ROI, first requirement is for TAR then audited accounts which are annexed to TAR. Author discussed this issue with other senior consultants and all are of view that without TAR,  computation and return cannot be finalized.

Therefore, it can be said that extension of date for obtaining and furnishing of TAR must, logically lead to extension of last date for filing of ROI. However, it seems that our authorities are habituate to work half heartedly and are in habit of seeking requests for extensions when such requests are not at all required. Even requests do not make a difference and poor people have to approach High Courts. This has happened in case of due date for TAR vis a vis due date for ROI also.

36 days have lapsed since date was extended for TAR:

The circular extending the date for furnishing of TAR was issued on 20th August, 2014. Many have expressed concern about date for ROI in cases where TTAR is compulsory. Professional bodies and trade associations have also made requests but not to have impact on CBDT. Thus people have to approach Courts seeking directions to CBDT to consider extension of due date to file ROI in cases where TAR is required. Gujarat High Court has already issue directions in this regard. Andhra Pradesh High Court has also directed to consider the same. Matters are pending in other High Courts also.

No change after NAMO government in administrative offices:

This shows that there is hardly any change after government lead by Shri Narendra Modi as PM took charge. The authorities are still having same attitude of harassing public un-necessarily in many ways like working half heartedly, not working in reasonable and judicious manner, not  fully working, not following court rulings, not disposing off matters in hand ready for disposal. This is evident from the attitude shown at highest level of direct taxes that is at the level of CBDT about extension of date of TAR without corresponding extension for last date for ROI where TAR is required.

Public feeling is still that harassment in government offices still continue. We have experienced that after the BJP government led by Shri Atal Behari Vajpayee took charge, there was increasing trend of harassment and it continued more vigorously with more pressures on general public and tax payers during earlier governments. Public had lot of expectations from new government led by Shri Narendra Modi, however,  there seems a big question mark as to whether Shri Narendra Modi and his team  will be able to put check on harassment  and corruption ?

 With tendency in mind of public servants as to  ‘who care for public’?,   ‘my job is secured always’ , ‘no one will ask question so long I act in favor of government, though illegally’, and      power to harass people, without fear of losing job by government servants, forcing public to face hardship and to indulge into litigation to get relief which should be allowed as duty bound public servants. Thus  they will always act as masters of public having right to harass public and tax payers and therefore,  there cannot be check on corruption.

Thank god many of our government departments, who render services to public  (like Railways, Telephones, Postal Department, Hospitals, transports etc. are somewhat doing better in service sector). We are proud of our scientists who have made it possible to have some presence in   the Mars.  Author hopes that position of scientists, doctors, teachers in government organizations will improve and they will not be left to have feeling “kash hum bhi IAS/IPS / RAS… officers hote”

Today on 24th September, 2014 India created history by  becoming the first country to successfully get a spacecraft into the Martian orbit on its maiden attempt. Indian Space Research Organisation's Mars Orbiter Mission (MOM) spacecraft started orbiting the red planet at 7.47am, but it was only 12 minutes later —because of a time delay in radio signals travelling the 680 million km -- that scientists at ISRO Telemetry, Tracking and Command Network in Bangalore, could erupt in joy as Prime Minister Narendra Modi stood a happy witness.

Let us hope that there will be a change no brain drain due to  scientists, doctors, engineers, joining civil services and leaving their professional area of expertise. This should come to an end and too much importance to BABU GIRI at cost of professionals must be reduced.

From some news reports about litigation in High Courts on recent issue of due date for ROI:

Gujarat High Court directs CBDT to extend due date for filing of ITR to 30-11-2014 subject to Sec. 234A interest

 All Gujarat Federation of Tax Consultant filed a writ petition in the Gujarat High Court seeking directions  for the extension of the due date for filing of ITR to November 30, 2014. On the impugned issue, petitioner argued that ITR is prepared on the basis of information collated and reported in the tax audit report and in absence of tax audit report it would not be possible for a taxpayer to compute his tax liability and file return of income on due date 30-09-2014. On the other side, the Income-tax Department argued that if the blanket extension is given for filing of return of income, the taxpayer would also defer the payment of due taxes to the credit of Central Government which would be prejudicial to interest of revenue. Dept. also gave surety to the Court that no penalty or interest would be levied for revision of return by the taxpayer, if any, pursuant to such tax audit.

Gujarat High Court suggested a mid-way which would tackle the practical problem being faced by the taxpayers and which would save the interest of revenue. Gujarat High Court directed the CBDT to extend the due date for filing of return of income for all purposes, inter-alia, carry forward of losses, allowability of deductions under Sections 80-IA, 80-IB, 80-IC, 80-ID, etc.However, such extension  can  be granted subject to charge of interest under Section 234A for the period commencing from 01-10-2014 and up to the actual date of filling the return of income.

However, in such cases, the taxpayer will enjoy the option of paying taxes before the due date of 30-09-2014 and to that extent enjoy the exemption from levy of interest under Section 234A.

The copy of order is awaited

AP High Court also advised  CBDT to consider extension of Due date of ITR to 30.11.2014

All India Federation of Tax Practitioners(AIFTP)–South Zone also filed Writ Petitions questioning the notification issued by the Central Board for Direct  Taxes on 20-08-2014 extending the time for the audit report to 30-11-2014 as arbitrary, discriminatory and unjust and sought for a  direction to consider and dispose of the representations  dated 05-08-2014 and 13-05-2014 addressed to CBDT  Chairman and Union Finance Minister respectively and a direction to the Union of India and CBDT to issue appropriate directions for extending the time for filing of ITR. The High Court has advised CBDT to consider the same.

Status of ITR Due Date extension cases Pending before Various HCs

The two writ petitions have been disposed of by the Hon’ble High Court at Hyderabad on 23.09.2014 observing that there is no justification or reason to extend the date for TAR alone and not to extend the date for ITR and accordingly the Union of India and CBDT were directed to consider the contents of the representations of AIFTP mentioned above for extending the date for filing ITRs in tandem with the date for TAR and dispose of the representations well before the date for filing ITR i.e. 30-09-2014.

 Writ petition in Delhi High Court has been withdrawn and in Gujarat High Court a direction was given to CBDT for extending the time for ITRs subject to levy and payment of interest under section 234A of Income Tax Act, 1961 in cases the tax is not paid before 30-09-2014. It appears that such a facility to pay interest for belated returns is already and always available under the statute.

Therefore it appears that the direction of the High Court at Hyderabad to consider the representations of AIFTP for issue of extension  is more appropriate and apt in the present circumstances. The counsel for Union of India and CBDT would be communicating the direction of the High Court to the concerned for issue of appropriate orders.

Gujarat HC directs CBDT to extend due date of ITR Filing to 30.11.2014

Status of ITR Due Date extension cases Pending before Various HCs

Status Updated Till 24.09.2014 (6.00 AM)

Chartered Accountants and Trade Associations around the country has filed Public Interest Litigation (PIL) before various high courts  for extension of Due date of ITR in line with Tax Audit Report Due date for A.Y. 2014-15.

We are giving below the daily status PILs filed before various High Court :-

I. All India Federation Of Tax Practitioners, Mumbai Vs. Union of India & CBDT ( High Court at Hyderabad for the States of Telangana and Andhra Pradesh) , WP 28159/2014,  WP 28672/2014

23.09.2014- Disposed of by the Hon’ble High Court at Hyderabad  observing that there is no justification or reason to extend the date for TAR alone and not to extend the date for ITR and accordingly the Union of India and CBDT were directed to consider the contents of the representations of AIFTP  for extending the date for filing ITRs in tandem with the date for TAR and dispose of the representations well before the date for filing ITR i.e. 30-09-2014.

II. Rajni Mangaldas Shah V/S Central Board Of Direct Taxes (Gujarat High Court),   SCA/12571/2014

 All Gujarat Federation of Tax Consultants Vs. CBDT (Gujarat High Court) SCA 12656/ 2014

22.09.2014- Appeal Disposed off in favour of Petitioner and High Court Instructed CBDT to extend due date to File Income Tax Return in Tax Audit Cases for A.Y. 2014-15  to 30.11.2014 but allowed to levy Interest U/s. 234A of the Income Tax Act,1961.

19.09.2014 – Adjourned for further hearing to Monday 22.09.2014.

16.09.2014 –  On Request from CBDT Counsel Court Adjourned the matter for final hearing to 19th September 2014.


1. In this case no hearing been taken place and case been adjourned to 16.09.2014.

2. The Reason for adjournment as per information available with us are 1. Absence of Senior Judge and 2. Non Appointment of any counsel to appear on behalf of CBDT/ UOI.

3. In Gujarat one more petition has  been filed by All Gujarat Federation of Tax Consultants.

III. Mahesh Kumar And Company Vs. Union Of India & Anr. – W.P.(C)  5990/2014 (Delhi High Court)

23.09.2014 – Petitioner withdrew the petition citing that they are not happy with affidavit. Petition dismissed as withdrawn.

22.09.2014- Court Adjourned the matter on request of petitioner to 23.09.2014.

19.09.2014 – case Adjourned to 22.09.2014 – Court Directs CBDT to file affidavit regarding non leviability of Penalty U/s. 271(1)(c) in case assessee revises returns filed on or before 30.09.2014.

IV. The Chamber of Tax Consultants & Others Vs. Union of India (Bombay High Court),  WRIT PETITION (L)NO.2492 OF 2014

23.09.2014- Case adjourned to 24.09.2014

17.09.2014 – At the request of department counsel hearing has been adjourned to 23.09.2014.

15.09.2014 – Appeal Filed and  Listed for First Hearing on 17.09.2014.

V. Raj Tax Consultants Vs UO I And Ors (Rajasthan High Court, Jaipur Bench), Civil Writ No. 9540/2014

23.09.2014- Case adjourned to 24.09.2014

 19.09.2014 - Admitted and fixed for Final Hearing on 23.09.2014.

16.09.2014 -  Listed for First Hearing on 19.09.2014.

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