High Court declined to interfere in the matter of extension of the due date for filing Tax Audit Report and ITR

The Hon'ble Gujarat High Court in All Gujarat Federation of Tax Consultants v. Union of India [R/Special Civil Application No. 13653 and 660 of 2021, dated January 13, 2021] dismissed the writ applications filed for extension of the due date of filing Tax Audit Report ("TAR") and Income Tax Return ("ITR"). The Court declined to interfere in the matter and held that at this stage the Court may only observe that the Central Board of Direct Taxes ("CBDT") may consider issuing an appropriate circular taking a lenient view as regards the consequences of late filing of the TAR as provided under Section 271B of the Income Tax Act, 1961 ("Income Tax Act") and left it to the discretion of the CBDT in this regard.

Facts

All Gujarat Federation of Tax Consultants ("the Petitioner") is Trust formed and registered in accordance with the provisions of the Bombay Public Trust Act, 1950 having members of various professions from State of Gujarat engaged in the field of practicing taxation.

The Petitioner submitted that having regard to the Covid­19 pandemic situation, the CBDT ("the Respondent") extended the due date for filing the tax audit report from September 30, 2020 to October 31, 2020 in the case of all those assessees who are required to get their books of account audited.

The Petitioner prayed to issue a writ of mandamus to the Union of India, Ministry of Finance, to ask the Respondent to exercise its powers vested in it under Section 119 of the Income Tax Act by extending the due date of October 31, 2020 at least for 3 months i.e. up to January, 31 2021 for the purpose of filing ITR and TAR in case of assessees whose accounts are required to be audited.

The Hon’ble High Court, Gujarat in the All Gujarat Federation of Tax Consultants v. Union of India [R/Special Civil Application No. 13653 of 2020 dated January 8, 2021] directed the Respondent to look into the issue of extension of due dates for filing of TAR and ITR under Section 44AB of the Income tax Act, and take an appropriate decision in this regard by January 12, 2021, in accordance with law. Further, listed the matter on January 13, 2021.

Pursuant to the said direction of the Hon’ble Gujarat High Court, the Respondent looked into the representation preferred by All Gujarat Federation of Tax Consultants and observations made by the Court and passed an order vide F No. 370153/39/2020-TPL dated January 11, 2021, disposing off all the representations for extension of due date for filing of TAR & ITR and declined to extend the time limit.

The matter was again heard on January 13, 2021.

Issue

To what extent the High Court in exercise of its writ jurisdiction should interfere with the decision taken by the Respondents, more particularly, when it comes to Revenue.

Held

The Hon'ble Gujarat High Court in R/Special Civil Application No. 13653 and 660 of 2021, dated January 13, 2021 held as under:

Observed that, before the Petitioner could get a writ of mandamus or an order in the nature of mandamus, following conditions have to be fulfilled:

o The Petitioner for a writ of mandamus must show that he has a legal right to compel the Respondent to do or abstain from doing something;

o there must be in the Petitioner a right to compel the performance of some duty cast on the Respondents;

o the duty sought to be enforced must have three qualities: It must be a duty of public nature created by the provisions of the Constitution or of a statute or some rule of common law;

o the remedy of a writ of mandamus is not intended to supersede completely the modes of obtaining relief by an action in a Civil Court or to deny defence legitimately open in such actions;

o the power to issue a writ of mandamus is a discretionary power. It is sound use of discretion to leave the party to seek his remedy by the ordinary mode of action in a Civil Court and to refuse to issue a writ of mandamus;

o a writ of mandamus is not a writ of course or a writ of right but is, as a rule a matter for the discretion of the Court;

o in petitions for a writ of mandamus, the High Courts do not act as a Court of appeal and examine the facts for themselves. It is not the function of the Court to substitute its wisdom and discretion for that of the person to whom the judgment in the matter in question was entrusted by law. The High Court does not issue a writ of mandamus except at the instance of a party whose fundamental rights are directly and substantially invaded or are in imminent danger of being so invaded;

o a writ of mandamus is not issued to settle private disputes or to enforce private rights. A writ of mandamus cannot be issued against the President of India or the Governor of State;

o A writ will not be issued unless the Court is certain that its command will be carried out. The Court must not issue a futile writ.

• Noted that the Respondent has looked closely into the matter and declined to extend the due date of ITR and TAR. Further, held that the Court can very easily issue a writ of mandamus extending the said due date till March 31, 2021. However, such a line of reasoning or approach may upset the entire functioning of the Government and may lead to undesirable results.

• Refused to interfere in the matter and stated that the Respondent may consider issuing an appropriate circular taking a lenient view as regards the consequences of late filing of the TAR as provided under Section 271B of the Income Tax Act and left it to the discretion of the Respondent in this regard.