The Bombay High Court has directed the Central Board of Direct Taxes (CBDT) to issue requisite notification under Section 119 of the Income Tax Act extending the due date for e-filing of the income-tax returns in relation to the assessees who are required to file a return of income by December 31, 2024, at least to January 15, 2025.
The bench of Chief Justice Devendra Kumar Upadhyaya and Justice Amit Borkar opined that the extension of deadline would ensure that all taxpayers eligible for the rebate under Section 87A are afforded the opportunity to exercise their statutory rights without facing procedural impediments.
The bench held that prima facie the rebate under section 87A is inherently linked to the total income and tax liability of the taxpayer.
High Court states that the responsibility lies with the tax authorities to ensure proper implementation of the rebate, as long as the taxpayer fulfills the statutory criteria.
The Bombay High Court quips that “.. Procedural changes, such as those in utility software or instructions issued by the tax department, cannot override the substantive right to the rebate.”.
The court points out any action / inaction on part of Revenue that restricts the taxpayers to avail a statutory benefit is arbitrary and violative of rule of law.
The Chamber of Tax Consultants has filed the present PIL petition seeking a direction to the respondents to modify the system developed and put in place by the Tax Department for filing income-tax returns for Assessment Year 2024-2025 so as to allow the assessees at large to take complete benefit of the rebate available under Section 87A of the Income Tax Act, 1961.
According to the Chamber of Tax Consultants, the department have unilaterally disabled assessees from claiming rebate under Section 87A after 5 July 2024 by modifying the utility software for filing income-tax returns.
As a result, if the returns are filed by the assessees using the software of the respondents after 5 July 2024, they are unable to claim the rebate.
The Chamber of Tax Consultants contended that this unilateral modification is arbitrary, lacks justification, and deprives eligible taxpayers of statutory benefits.
Chamber of Tax Consultants asserted that the departmnets’ actions violate the principles of fairness and transparency expected from public authorities and seek judicial intervention to ensure compliance with statutory provisions.
The Chamber of Tax Consultants invited our attention to Section 115BAC and Section 87A of the Act and submitted that a conjoint reading of the relevant provisions indicates that the rebate under Section 87A is available on tax calculated even on income taxable at special rates. He argued that the statutory right created by the proviso to Section 87A cannot be extinguished or restricted through executive instructions or modifications to the utility software.
The court listed the matter on Jan 9, 2025 for final disposal.
Case Details
Case Title: The Chamber of Tax Consultants Versus Director General of Income Tax (Systems) & Ors.
Case No.: PIL No.32465 Of 2024
Date: December 20, 2024
Counsel For Petitioner: Percy Pardiwala, Senior Advocate with Mr. Dharan V. Gandhi
Counsel For Respondent: Akhileshwar Sharma and Mr. Abhishek R. Mishra
