Simplified Laws Guide to Taxation and Legal Concern
Let me start with an example. Suppose, in a large company like Infosys, TCS or Reliance (where over 125000 people are employed), if Finance and Accounts, Security and company matters are given to one individual to manage and supervise, will he be able to deliver? Can you even think of clubbing these departments under CFO? I am sure, even an illiterate will tell that this is not a good management decision.
But Mr. Modi thought this is a good model. He has handed over Finance and Defense of our country (where over 125 Crore people are living) to one individual. Can he focus and do justice to both the departments?
Common sense says ‘No’. The recent issue of extension of due date of filing income tax return supports this theory.
Due date of filing corporate returns – Right from Mr. Chidambaram days, the due date of filing corporate returns was 30th September and everyone was filing the return before the due date without any problems. Life was going smooth.
The starting point of the problem – The corporate returns to be accompanied by audit report (form 3CA and 3CD). During the end of July, 2014 CBDT (for ease, consider CBDT as Income Tax department) issued a new format of form 3CD incorporating many new clauses.
The audit fraternity – The audit fraternity, after going through the new format, submitted a memorandum to CBDT asking them to postpone the implementation of the new format to next year, as the time to change for new format was very short (due date of filing is 30th Sept)
Simple solution # 1– After hearing the request, CBDT should have changed the date of implementation to next financial year and continued to maintain the due date of filing as 30th September.
Circular from CBDT – Contrary to postponing the date of implementation, CBDT issued a circular at the end of August, 2014 postponing ‘obtaining and filing audit report’ to 30th November, without extending the date of filing income tax return.
Audit fraternity sought the clarification – the circular of CBDT was not clearly worded. So audit fraternity sought the clarification whether filing of IT return is also extended. (The IT return can’t be filed without audit report, as this is integral part of IT return)
Simple solution # 2 – Even at this stage, CBDT could have issued a clarification, extending the due date of filing return to 30th November.
CBDT didn’t respond – CBDT didn’t respond nor the government intervened and addressed the issue. This shows the inexperience of the new government. I am sure, If Mr.Pranab Mukharjee was the FM, he would have sorted out this issue easily!
PIL in various High Courts – When the Government didn’t blink; the audit fraternity filed Public Interest Litigation (PIL) at various High Courts such as Gujarat, Delhi, UP etc.
Simple Solution # 3– Even at this stage, if FM had intervened he could have stopped the Court proceedings. He should have asked CBDT to extend the due date. The people would have withdrawn the PIL. Precious time of the court could have saved.
During the last one week, the courts are hearing this case. (The courts are already overloaded with tons of cases. Was this case required? What is this Government doing?)
Gujarat High Court Judgement – Yesterday, the Gujarat High Court passed an Order asking CBDT to extend the due date of filing the return.
Disappointed with the new government – I am really disappointed with the way the new government is functioning. If they can’t solve such a silly matter of extending the due date, what can we expect from them in next 5 years? I don’t believe in the theory of 100 days or so for this kind of issue. Is there any rocket science involved in extending the due date or postponing the implementation of new form to next year?
Tax collection – most of the companies have already paid advance tax and TDS. So, by extending the due date, even the tax collection of the government won’t change much if there is 1-2 months delay.
Maybe Mr.Manishankar Iyer is right when he said about concentration of power in the new government. This government has failed in handling a simple issue like ‘extension of due date’.
The concentration of power, inexperience of the Government is clearly visible in this particular case.
