Latest Post :
Home » , » Write Petition by Delhi CA Soceity for non-extention of due date of Tax audit report

Write Petition by Delhi CA Soceity for non-extention of due date of Tax audit report

Written By Admin on Sunday, 6 October 2013 | Sunday, October 06, 2013

As we all knows we have experienced the difficulties in filing Tax Audit Report and Tax Return on 30th September 2013 due to mandatory filing through online system. Many of the returns were failed to upload due to Income tax site problems which attract penalty. Due to this reason, Delhi Chartered Accountants Society has filed write petition before Hight Court with urge that the assessee should not be penalised as there was no fault on the part of the assessee.   



IN THE HIGH COURT OF DELHI AT NEW DELHI
EXTRA-ORDINARY CIVIL WRIT JURISDICTION
WRIT PETITION (C) NO. 6334 OF 2013
In the matter of:
Delhi Chartered Accountants Society (Regd.) & Anr. Petitioners
VERSUS
Union of India & Ors. Respondents

Petition under Article 226 of the Constitution of India, inter alia, for the issuance of writ of mandamus or any other writ, order or direction in the nature thereof thereby directing the Respondents to extend the date of filing/uploading the income tax return and the tax audit report of income tax assessees because on the last date i.e. 30.09.2013 there was default on the part of the Respondents as the site of the Income Tax Department had crashed the assessee/their authorized representatives i.e. chartered accountants, advocates, practitioners were unable to file the income tax returns and audit reports and/or for the issuance of writ of mandamus or any other writ, order or direction in the nature thereof thereby directing the Respondents to accept the income tax return and the tax audit report of income tax assessees filed before 31.10.2013 as filed within time and/or for the issuance of writ of prohibition or any other writ, order or direction in the nature thereof restraining the Respondents from taking any adverse action against the assessees or imposing any penalty on assessees for failure to file the return/audit report whose return is e-filed on or before 31.10.2013

To,
The Hon’ble Chief Justice
& His companion Judges
of the High Court of Delhi.

THIS HUM’BLE PETITION OF THE PETITIONER, NAMED ABOVE, MOST RESPECTIVELY SHOWETH:

1. That the Petitioner is constrained to approach this Hon’ble Court by way of the present Petition, as large number of Income Tax assessees are being made to suffer for the lapse on the part of the Respondents while the law is settled that an act of the Government shall prejudice no one.

2. That at the outset, kind attention of this Hon’ble Court is invited to the fact that it is for the first time that Respondents made e-filing of Tax Audit report along with income tax return for the assessment year 2013-14 mandatory vide Notification No. 34 /2013/ F.No.142/5/2013-TPL dated 01.05.2013 The utility/software for e-filing of the audit report was introduced in the month of July 2013. However, as the said utility/software was not functioning properly and the audit reports could not be uploaded, the Respondents tried to rectify/correct the defects/problems in the utility/software. From July 2013 to 23.09.2013, the said utility/software was modified/updated as many as 12 times on representations of the professionals. As the software was not functioning properly, on the last moment, the Respondents issued an order dated 26.09.2013 under section 119 of the Income Tax Act, 1961 and directed that the assessees may file the audit report manually before the jurisdictional Assessing Officer by the prescribed due date i.e. 30.09.2013 and the same be filed electronically by 31.10.2013. But even the manual filing of audit report required feeding of voluminous data again in word/excel file which was/is an impossible task to be completed in 2 days. However, the last date for filling the Income Tax return was not extended and the same, as per the statutory provisions was 30.09.2013. Assessees/their authorized representatives i.e. chartered accountants, advocates, practitioners being law abiding citizens tried their level best to upload the income tax returns and the audit reports by 30.09.2013. However, the problem being faced by the assessees as well as tax professionals in not being able to file the income tax return and the audit report electronically was further confounded and aggravated, as on 30.09.2013, the server/site of the Income Tax Department crashed with the result that the returns which were required to be filed electronically could not be filed. Copy of Notification No. 34 /2013/ F.No.142/5/2013-TPL dated 01.05.2013 is enclosed herewith as “Annexure-P1”.

3. The facts leading to the filing of the present Writ Petition are briefly stated as under:-

4. That the Petitioner is a society comprising of Chartered Accountants who are also members of the Institute of Chartered Accountants of India. Mr. Naveen ND Gupta is the member of the Petitioner–Society and a citizen of India and is duly authorized and competent to file the present writ petition for and on behalf of the Society. Petitioner No.2 is an Income Tax assessee and citizen of India.

5. Respondent No.1 to 3 are State within the meaning of Article 12 of the Constitution of India and are amenable to the writ jurisdiction of this Hon’ble Court.

6. That e-filling of income tax return was first introduced in 2007, with the object of making the interaction/correspondence with the department paperless. In 2007, e-filling of return of income u/s 139 was made mandatory for companies & assesses to whom provisions of section 44AB relating to tax audit were applicable. The concept of e-filling was introduced to have the centralized information in paper less form. This first move of e-filling of return of income was highly supported, favored and whole heartedly welcomed by the assessees as well as Chartered Accountants/Professionals fraternity.

7. That from 2007 till 2012, it was only return of income which was required to be filed online and not the audit report. However, for the first time ever, Respondents vide the aforesaid Notification dated 01.05.2013 made e-filing of audit report along with return of income also mandatory.

8. That the utility/software for e-filing the audit report was introduced in the month of July 2013.

9. That, however, as the said utility/software was not functioning properly and the audit reports could not be uploaded, the Respondents tried to rectify/correct the problems in the utility.

10. That from July 2013 to 23.09.2013, the said utility/software was modified/updated as many as 12 times.

11. That however, despite several representations, the problem/difficulty with the online filing of audit reports and returns continued. Consequently, on the last moment, the Respondents issued an order dated 26.09.2013 under section 119 of the Income Tax Act, 1961 and directed that the assessees may file the audit report manually before the jurisdictional Assessing Officer by the prescribed due date i.e. 30.09.2013 and the same be filed electronically by 31.10.2013. However, the last date for filling the Income Tax return was not extended and the same, as per the statutory provisions was 30.09.2013. Copy of order dated 26.09.2103 is enclosed herewith as “Annexure-P2”.
12. That on the very same date i.e. 26.09.2013, the Respondents also issued press release dated 26.09.2013 wherein it was stated as under:-
“It has come to the notice of the Central Board of Direct Taxes (CBDT) that many assesses who are required to file their income tax returns by September 30, 2013 are finding it difficult to upload the report of Audit electronically as prescribed under the proviso to sub-rule (2) of Rule 12 of the IT Rules for the Assessment Year 2013-14. Therefore, the CBDT has decided to extend the time for furnishing the report of Audit electronically till October 31, 2013. However, assesses are required to file the report of Audit manually with the jurisdictional Assessing Officer by the prescribed due date, i.e. September 30, 2013. Assesses are also required to file their returns of income electronically by the prescribed due date, i.e. September 30, 2013.”
Copy of press release dated 26.09.2013 is enclosed herewith as “Annexure-P3”.

13. That simply by way of the aforesaid press release, the Respondents made filing of audit report manually by 30.09.2013 as mandatory while as per Rule 12(2) audit report is to be filed only electronically.

14. That it is most respectfully submitted that this act of the Respondents is contrary to and ultra vires the Statutory provisions in particular Rule 12(2) of the Income Tax Rules, 1962 which as amended reads as under:
“Rule 12 (2)
the return of income required to be furnished in Form SAHAJ (ITR-1) or Form No. ITR-2 or Form No. ITR-3 or Form SUGAM (ITR-4S) or Form No. ITR-4 or Form No. ITR-5 or Form No. ITR-614a[or Form No. ITR-7] shall not be accompanied by a statement showing the computation of the tax payable on the basis of the return, or proof of the tax, if any, claimed to have been deducted or collected at source or the advance tax or tax on self-assessment, if any, claimed to have been paid or any document or copy of any account or form or report of audit required to be attached with the return of income under any of the provisions of the Act:

Provided that where an assessee is required to furnish a report of audit specified under sub-clause (iv), (v), (vi) or (via) of clause (23C) of section 10, section 10A, clause (b) of sub-section (1) of section 12A, section 44AB, section 80-IA, section 80-IB, section 80-IC, section 80-ID, section 80JJAA, section 80LA, section 92E or section 115JB of the Act, he shall furnish the same electronically.”

15. That it is submitted that the law is settled that a circular/clarification cannot override and overreach the provisions of the Statue and thus, the aforesaid clarification requiring the assessees to file audit report manually being contrary to the Statutory provisions is liable to be struck down.

16. That despite the above, no instructions were issued by the Respondents to the jurisdictional Assessing Officers to accept the audit reports upto 28.09.2013 and therefore, the Audit Reports were not being accepted manually.

17. That, thereafter, utter confusion and chaos was also created as the Assessing Officers insisted that the Audit Report should be accompanied by a copy of Income Tax Return. However, Income Tax Return could be uploaded only after filing of Audit Report as in a column in the Return required to specify the date of filing of the Audit Report.

18. That the Petitioner humbly submits that direction to file audit reports manually is not only contrary to law but also a task which was humanly impossible to be accomplished in short-span of 2 days or for that matter even in 4 days. This is for the reason that e-filing utility in which data had been filled did not provide the option to take print-out of the audit report before uploading of the same. Therefore, manual filing of audit report required again feeding of voluminous data in word/excel file which was/is an impossible task to be completed in 2 days.

19. That assessees/their authorized representatives i.e. chartered accountants, advocates, practitioners being law abiding citizens tried their level best to upload the income tax returns and the audit reports by 30.09.2013.

20. That however, the problem being faced by the assessees as well as tax professionals in not being able to file the income tax return and the audit report electronically was further confounded and aggravated, as on 30.09.2013, the server/site of the Income Tax Department crashed with the result that the returns which were required to be filed electronically could not be filed. This was so, even in, those cases where the assessees had filed hard copy of the audit report. The site of the Department was not working which is evident from the fact that despite several attempts at regular intervals the returns could not be uploaded. Evidence in proof thereof is enclosed as “Annexure-P4”.

21. That the failure to file income tax return by the prescribed date for no fault of them causes following irreparable loss/prejudice to the assessees:-
i.) Assessee is required to pay interest under section 234A of the Act
ii.) In case of loss, the same cannot be carried forward
iii.) Right to revise the return stands defeated

22. That further the failure to file the audit report electronically by the prescribed date invites penalty under section 271B of the Income Tax Act, 1961. Section 271B reads as under:-

“ [Failure to get accounts audited.

271B . If any person fails [***] to get his accounts audited in respect of any previous year or years relevant to an assessment year or [furnish a report of such audit as required under section 44AB ], the [Assessing] Officer may direct that such person shall pay, by way of penalty, a sum equal to one-half per cent of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such previous year or years or a sum of 49[one hundred fifty thousand rupees], whichever is less.]”

23. That it is humbly submitted that assessees cannot be penalized as their was no fault of them. The failure was on the part of the Respondents to maintain their site properly.

24. That the Petitioner further humbly submits that aforesaid actions/directions of the Respondents has severely affected large number of small and medium assesses as the Large corporates are required to file returns by 30th November.

25. That it is therefore respectfully submitted that action/inaction of the Respondents is also violatvie of Article 14 and 19(1)(g) of the Constitution of India.

26. That it is further submitted that powers conferred in section 119 of the Act are meant for specific purpose of proper administration of law, efficient management of work of assessment and collection of revenue and to relax procedures in law to avoid genuine hardship, whereas, the clarification issued vide the said Press Release made the procedure more rigorous, harsh and caused extreme hardship, agony and distress to assessees as well as the tax professionals.

27. Being thus aggrieved by the arbitrary, unreasonable, excessive, colorable, illegal action of the Respondents, the Petitioner is constrained to file the present petition on the following GROUNDS, inter alia,–
A. Because the action/inaction of the Respondents is arbitrary, highly unreasonable and patently unjust.
B. Because the present case is of failure of the governance, administration and echoes unfair and unjust attitude of the Respondents.
C. Because Respondents cannot run away from the responsibility cast upon them and at the last moment shoulder the entire responsibility on members of the Petitioner society or other professionals or income tax asssessees.
D. Because the members of the Petitioner society as well as other professionals and Income Tax assessees are being made to suffer for no fault of theirs while the lapse is solely attributable to the Respondents.
E. Because the law is settled that an act of the Government shall prejudice none.
F. Because the action/inaction of the Respondents results in penalizing the assessee for no fault of his which is contrary to all settled principles of law and can also never be the legislative intent.
G. Because the Respondents have failed to note, consider, understand and appreciate the observations of the Hon’ble Constitution Bench in the case of Pannalal Binjraj v. Union of India [1957] 31 ITR 565 wherein the Hon’ble Court observed as under:
“A humane and considerate administration of the relevant provisions of the Income-tax Act would go a long way in allaying the apprehensions of the assessees and if that is done in the true spirit, no assessee will be in a position to charge the Revenue with administering the provisions of the Act with ‘an evil eye and unequal hand’.
H. Because assessees cannot be penalized as their was no fault of them. The failure was on the part of the Respondents to maintain their site properly.
I. Because neither assessee nor professionals can anticipate the unexpected.
J. Because the conduct of the Respondents has caused extreme hardship, irreparable loss, prejudice , distress and harassment to the professionals as well as Income Tax assessees.
K. Because the Hon’ble Apex Court in State of Maharashtra v. Jagannath Achyut Karandikar 1989 AIR 1133 (SC) has clearly held that it is unjust, unreasonable and arbitrary to penalise a person for the default of the Government.
L. Because it was Respondents e-filing utility/software which did not function properly and members of the Petitioner society or other professionals or assessees had no role to play in it.
M. Because it is humanly impossible to furnish audit reports in a span of 2 days or even for that matter 4 days and therefore, Respondents ought to have given a reasonable period of at least a month for complying with the same.
N. Because impugned clarification/press release is contrary to the Statutory provisions in particular Rule 12(2) of the Income Tax Rules, 1962 and therefore liable to be struck down.
O. Because the Constitution Bench of the Hon’ble Supreme Court in Commissioner of Central Excise, Bolpur v. Ratan Melting & Wire Industries 2008(13)SCC(1) has held that:-
“Looked at from another angle, a circular which is contrary to the statutory provisions has really no existence in law.”
P. Because almost all assessees file their income tax returns through the professionals being chartered accountants, advocates and income tax practitioners. Failure to file audit report/income tax return by the prescribed date invites penalty for which assessees have already started blaming the professionals and therefore, the burden of penalty would fall upon the professionals.
Q. Because so far as audit reports are concerned, the same were required to be uploaded by the Chartered Accountants and even the assessees themselves could not file the same.
R. Because the format of audit report to be filed/uploaded electronically is different from the earlier audit report which was being filed manually.
S. Because it is well settled that procedural requirement or any procedural defects and irregularities which are curable should not be allowed to defeat substantive right or to cause injustice
T. Because the impugned action/inaction of the respondents is not only violative of good conscience and equity but also infringing and abridging the legal and fundamental rights of public at large. The impugned action has created a chaos and commotion in the business community that generates maximum revenue for the respondent / government and thus it is a matter of great concern not only for the petitioner but also for the public at large and therefore, immediate interference of this Hon’ble Court is warranted.
U. Because the impugned action/inaction of the respondents is totally against the basic structure of the Constitution of India and thus is in clear violation of Article 13(2) of the Constitution of India.
V. Because the impugned action/inaction of the State is in clear violation of the letter and spirit of Articles 38 and 39 of the Constitution of India, according to which the State is bound to secure a social order for the promotion of welfare of the people and it has to follow certain principles of policy.
P. Because the action/inaction of the Respondents is violative of the fundamental rights enshrined in part III of the Constitution offending Article 14 and 19(1)(g) thereof.
Q. Because action/inaction of the Respondents is contrary to various settled principles of law as well as all cannons of justice and fairplay.

28. That it is submitted that the aforesaid list of grounds are not exhaustive and the Petitioner craves leave of this Hon’ble Court to add, amend or alter the same with permission of this Hon’ble Court at the time of hearing.

29. That the Respondents are acting contrary to settled principles of law and also against the statutory mandate. The members of the Petitioner Association and income tax assessees, therefore, have been subjected to and exposed to a completely unconstitutional and illegal action. The same have devastating effect on the business of the members of Petitioner association as well as income tax assessees. The same is causing grave and irreparable loss, harm and injury. The Petitioner is therefore constrained to approach this Hon’ble Court under Article 226 of the Constitution of India.

30. The Petitioners have no other alternative, adequate or equally efficacious remedy but to approach this Hon’ble Court under Article 226 of the Constitution of India. .

31. That the Petitioners have not filed any other writ petition before the Supreme Court or this Hon’ble Court or any other High Court regarding the subject matter of the present Writ Petition.

32. The Respondents are situated in New Delhi. The Petitioner is based in New Delhi. Therefore, this Hon’ble Court has the jurisdiction. Hence, this petition is maintainable.

PRAYER:
Under the circumstances, it is prayed that this Hon’ble Court may be pleased to :
i) Issue a writ of mandamus or any other writ, order or direction in the nature thereof in the nature thereof thereby directing the Respondents to extend the date of filing/uploading the income tax return and the tax audit report of income tax assessees because on the last date i.e. 30.09.2013 there was default on the part of the Respondents as the site of the Income Tax Department crashed;

ii) Issue a writ of mandamus or any other writ, order or direction in the nature thereof thereby directing the Respondents to accept the income tax return and the tax audit report of income tax assessees filed before 31.10.2013 as filed within time;

iii) Issue a writ of prohibition or any other writ, order or direction in the nature thereof restraining the Respondents from taking any adverse action against the assessees or imposing any penalty on assessees whose return is e-filed on or before 31.10.2013;

iv) Issue a writ of certiorari or any other writ, order or direction in the nature thereof quashing press release dated 26.09.2013;

v) Issue a writ of mandamus or any other writ, order or direction in the nature thereof thereby directing the Respondents to call for records of e-filling records/log book maintained by the Respondents;

vi) to award costs of this petition; and/or;
vii) for such further and other reliefs, as this Hon’ble Court may deem fit and proper in the nature and circumstances of the case.

PETITIONERS
Through                             


New Delhi
Dated :     .10.2013
(Ruchir Bhatia)
                          Advocate
                          210 Lawyers Chambers
                          High Court of Delhi
                          New Delhi-110003.
                       
- taxguru.in
Share this article :

1 comment :

Share your knowledge...

2500 + Subscribers

Get Toolbar

Get our toolbar!

Read article on Android Phone

Share your file

Forum

Get updates on Facebook

Popular Posts

 
Support : Creating Website | Johny Template | Mas Template
Copyright © 2011-2013. YourKnowledgeportal - All Rights Reserved
Original Design by Creating Website Modified by Adiknya
Blogger Widgets