2024 (3) TMI 842 - HC - Indian Laws

Rejection of bid as petitioner had not submitted the IT return - Specific criteria for bids of the tenders - petitioner submits that no specific years for filing Income Tax Returns were mentioned in the Tender Notice. Further in terms of Section 44 AB(a) read with Explanation 2 of Section 139 of the Act, 1961, the due date for submitting the return of income for auditing the same was 31st day of October of the assessment year, as the petitioner s gross receipts was over Rs. 1 Crore for the year ending 31.03.2022. As such, there was no opportunity for the petitioner to have submitted the IT return for the year 2022-2023, in terms of the tender notice dated 06.08.2023 HELD THAT - The clauses of the tender notice requiring the bidders to submit their IT Return for the last Assessment Year and the Financial Statement of last 3 years from the Chartered Accountant have been submitted by the petitioner. The only problem that has arisen is that the State respondents wanted the IT Return for the Assessment Year 2023-2024. This Court is well aware of the judgments of the Supreme Court, which is to the effect that the decision-making process of the employer or the owner of project in accepting or rejecting the bid of a tenderer should not be interfered with, unless the decisions are found to be arbitrary and irrational. A mere disagreement with the decision-making process or the decision of the Administrative Authority is no reason for a Writ Court to interfere in a tender proceeding, as the author of a tender document is the best person to understand and appreciate it s requirement and interpret it s documents. The problem that however arises in the present case is that the respondents have not stated clearly, the specific years of the Financial Statement that were required by the tenderers. In the present case, the petitioner whose gross receipts was over Rs. 1 crore, was required to have his Income Return audited, in terms of Section 44 AB(a) read with Explanation 2 of Section 139 of the Act, 1961. When the statutory law provides that the petitioner had until 31st October of the Assessment Year to have his return on income audited, there was no infirmity with the petitioner not submitting his Income Tax Return for the period prior to 2022-2023, as the period for submitting the same for auditing had not expired as per the Act, 1961. This is purely due to the fact that the State respondents in the tender notice have not clearly specified the years for which the IT Returns were required to be submitted by the tenderers. Thus this Court is of the view that in terms of the judgment of the Supreme Court in Dutta Associates Pvt. Ltd. 1996 (11) TMI 490 - SUPREME COURT the respondents have not been transparent, fair and open, as the respondents should have made a clarification/specification in the tender notice. This Court is of the view that the petitioner s bid would have to be considered to be valid. In the alternative, the respondents should give an opportunity to the petitioner to submit the IT Return for the Assessment Year 2023-2024. The respondents shall thereafter consider the petitioner s bid along with all other valid bidders.

Summary

Issues:
The rejection of bid due to non-submission of IT return for the assessment year 2022-2023 as per tender condition.

Judgment Details:

1. The petitioner's bid was rejected for not submitting the IT return for the assessment year 2022-2023, a requirement specified in the tender notice.

2. The petitioner argued that as per Section 44 AB(a) and Explanation 2 of Section 139 of the Income Tax Act, 1961, the deadline for filing the IT return was the 31st of October of the assessment year, based on gross receipts exceeding Rs. 1 Crore for the year ending 31.03.2022.

3. The respondent's counsel contended that the tender notice explicitly mandated submission of IT return certificates for the last 3 years, including the year 2022-2023, regardless of the statutory deadline for auditing.

4. The Court noted that the tender notice lacked clarity on the specific years for IT return submission, causing ambiguity for bidders with gross receipts over Rs. 1 Crore, requiring audit as per Section 44 AB(a).

5. Referring to precedents, the Court emphasized the need for transparency in tender processes, as highlighted in the case of Dutta Associates Pvt. Ltd., stressing that tender conditions should be clearly stated to ensure fairness and openness.

6. Given the lack of specificity in the tender notice regarding the years for IT return submission, the Court deemed the rejection of the petitioner's bid unjustified and ordered the authorities to allow the petitioner to submit the IT return for the assessment year 2022-2023 for reconsideration of the bid along with other valid bidders.

7. Consequently, the Court set aside the rejection letter dated 07.09.2023 and allowed the writ petition in favor of the petitioner.