Income Tax Return Filing Extension: No Winner Here!


Watching from sidelines, it seemed unending like a Saas-Bahu serial. The whole saga of income tax extension had many twists and turns and all actors played their part well. Suspense continued till the end. No one was willing to yield. The episode in a CA election year was blown out of proportion thanks to candidates, whatsapp and facebook posts.

On a serious note, is there a winner? Few may disagree with me (and they have right to be so) but there in No Winner Here. Let us look at gains and losses of each interested party: –

Chartered Accountants’ fraternity

Strangely the demand for extension was initiated by the Chartered Accountants (CA’s). Curiously, no assesse demanded extension in date of filing tax return. Some may argue, it is the CA’s who have to conduct tax audit and the time was not enough. No disagreement here but why there was not even a whisper in support of extension by any Chamber of Commerce or business bodies. They speak out very well when their rights are infringed. They also knew that CA’s are burdened and there is likelihood of delay in filing of tax returns. No support was lent. The CA’s took the gauntlet and started filing writs in various high courts as if some race is going on. The pressure led the President of CA Institute to have audience with Finance Minister. Reportedly, their request was declined. That should have been the end of matter. But no, few CA’s or their Associations took CBDT to courts. End result shows that CA’s have burnt bridges with CBDT and Finance Ministry and the repair will definitely take time. The extension of date for filing of tax return in 3 States and 1 Union Territory leads us to conclude that CA fraternity is definitely not a winner here.

CA’s ignored the most important point. They had ample time to conduct tax audit. Mere notification of new form with minor changes (I have no idea on changes made but a senior tax practitioner has confirmed that form contains minor changes) does not make good ground for extension. Filling of form is procedural (generally by a articled assistant in a CA’s office) after an expert team consisting of a CA has conducted audit. It is not understandable why there was such a hue and cry over extension of time. If we are not prepared for, say, Diwali festival (due to pre-occupation or otherwise), would we demand change in Diwali date?

CA’s command huge respect in society and they should concentrate on what they are best known for – their handwork, commitment and quality. Extension or no extension, CA’s must give confidence to the clients that they are capable of handling all. They have been doing this since long. Trust is not built in a day and CA’s should  continue this never ending exercise.

High Courts

No one but judiciary knows its role better. Respect for Indian judiciary is also known. Delhi High Court refused to be dragged into executive function such as extension of time in filing tax return though it rightly directed CBDT to declare forms much in advance. It refused to entertain writ on this issue by a CA Association. Few high courts dismissed writs in similar fashion. Punjab & Haryana High Court differed with this view and directed CBDT to extend time upto 31st October 2015. Another high court passed a similar order. Legal experts are still debating which court is correct. But one thing is clear, the difference in opinion of various courts does not make them winner here. The fate of court orders will be decided finally if and when CBDT decides to challenge the orders directing them to extend the time in a higher court. The interesting issue that needs answer is whether the judiciary should step on the routine executive function of deciding the date of filing tax return. Till the time the order is challenged and set aside, CBDT has no option but to comply.

CBDT/Finance Ministry

CBDT has been known for extending dates in past years. This year clear adamancy ruled out any extension. Rules are to be followed by all citizens. CBDT was not convinced with reasons of extension and hence ignored requests from CA fraternity. Social media energized CA’s and the demand became louder and louder with each passing day. Having stuck to its grounds, CBDT was dragged into various courts where it stoutly defended its decision till Punjab & Haryana High Court directed CBDT to extend time. Faced with the order directing it to extend time till 31.10.2015, CBDT sprung a surprise (no one can question the legal brilliance available at Finance Ministry) by extending the time for the states whose high courts have passed the direction. They have a right to do so. Yet, one fact cannot be lost sight of. The present government won on a heavy mandate including seemingly almost one-sided support of CA fraternity. Extension of 15 days if not 30 days would have made them happier. Now the trust deficit has widened. Neither CBDT nor Finance Ministry (read Government) is the winner here.

The battle is yet not over. Last word, it seems, is yet to be written on this. Watch this space!

© Ashish Makhija:
Disclaimer : This blog has been written solely to present an analysis of the manufactured situation of extension of time in filing tax returns. It means no offence to any fraternity or authority and least of all the courts.