2021 (5) TMI 266 - HC - Income Tax

Effect of Coronavirus pandemic - statutory timelines provided under the Income Tax Act, 1961 qua the assessees' need to be extended - case advanced on behalf of the petitioners', is that the recent surge in the Coronavirus pandemic has debilitated them as also those who are similarly circumstanced, making it difficult, to comply with the statutory obligations within the timelines provided under the Act - HELD THAT - We are of the view that the matter requires examination and, therefore, a response on behalf of the respondents, on the issues raised in the petition, would be in order. Accordingly, issue notice.Mr. Jeevash Kuamr Tiwari accepts service on behalf of respondent no. 1 while Ms. Sonu Bhatnagar accepts service on behalf of respondent nos. 2 and 3. Likewise, Mr. Abhishek Maratha accepts notice on behalf of respondent no. 4 while Mr. Anupam Srivastav accepts service on behalf of respondent no. 5. Counter-affidavits will be filed within three days from today. Rejoinders thereto, if any, will be filed before the next date of hearing. For the moment, we intend to issue a limited ad-interim direction, which is, that if any coercive action is intended to be taken against any assessee (not confined to the petitioners herein), at least, 3 weeks prior notice will be given to enable the assessee, to approach the Court, or an appropriate statutory authority, for seeking requisite relief. Intimation, qua such orders, will be given by the revenue, by way of a written notice, which will be served on the concerned assessee.

Summary

Issues:
1. Extension of statutory timelines under the Income Tax Act, 1961 due to the impact of the Coronavirus pandemic.
2. Waiver of penalty, interest, and other charges for delay in tax payment and filing returns.

Issue 1: Extension of Statutory Timelines under the Income Tax Act, 1961:
The writ petition raised concerns regarding the State's failure to acknowledge the widespread impact of the Coronavirus pandemic on all individuals, necessitating an extension of statutory timelines under the Income Tax Act, 1961. The petitioners emphasized the challenges faced in meeting statutory obligations within the prescribed timelines due to the debilitating effects of the pandemic. Reference was made to the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020. The court acknowledged the severity of the situation, with a daily infection rate exceeding 4,00,000 cases and a daily death rate nearing 3,900. Consequently, the court deemed it necessary for the respondents to address the issues raised in the petition and respond accordingly.

Issue 2: Waiver of Penalty, Interest, and Other Charges:
In addition to seeking an extension of statutory timelines, the petitioners requested the issuance of directives to waive penalties, interest, and other charges related to delays in tax payments, return filings, and submission of required information as mandated by the Act. The court considered the petitioners' argument regarding the adverse impact of the pandemic on compliance with statutory obligations. An interim direction was issued to provide a 3-week notice before any coercive action against any assessee, allowing them time to seek necessary relief through legal channels. The revenue was instructed to inform the concerned assessee in writing about any intended coercive actions. The court scheduled the next hearing for further proceedings and appointed an Amicus Curiae to assist in the matter.

This detailed analysis of the judgment outlines the key issues addressed by the court, including the extension of statutory timelines under the Income Tax Act, 1961, and the waiver of penalties and charges due to pandemic-related challenges. The court's directives and considerations reflect a balanced approach towards mitigating the impact of the Coronavirus pandemic on tax compliance and enforcement.