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Are you a taxpayer? Know this crucial verdict of Gujarat High Court on CBDT

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Ahmedabad: The Gujarat High Court has come up with an important verdict regarding the Central Board of Direct Taxes (CBDT).

This verdict has important ramifications for income taxpayers.

In this judgment, the time period for the officials of the tax department has been extended up to March 31, 2021, having regard to the Covid-­19 pandemic.

Observing that the powers exercised by the CBDT are beneficial in nature, the Gujarat High Court opined that it should exercise it carefully in the interest of proper administration.

“We are of the view that the respondent No.1 – Union of India, Ministry of Finance should immediately look into the issue, more

particularly, the representation dated 12th October 2020 at Annexure: I of the paper book (page 108) and take an appropriate decision at the

earliest in accordance with law. We, accordingly, direct respondent No.1 to do so. While taking an appropriate decision, the Union shall bear

in mind the observations made by this High Court in the two above noted judgments, more particularly, the observations of the Supreme Court in the case of Vaghjibhai S. Bishnoi (supra) that the powers given to the CBDT are beneficial in nature to be exercised for proper administration of fiscal law so that undue hardship may not be caused to the taxpayers,” the verdict read.

“The purpose is of just, proper and efficient management of the work of assessment and the public interest. One additional aspect that needs to be kept in mind before taking any appropriate decision that the time period for the officials of the tax department has been extended up to March 31, 2021, having regard to the current covid­19 pandemic situation. If that be so, then some extension deserves to be considered in accordance with law. Let an appropriate decision be taken by January 12, 2021. Post this matter on January 13, 2021, on top of the Board,” it added.

“In the overall view of the matter, we have reached the conclusion that we should not interfere in the matter. In the result, both the writ applications fail and are hereby rejected. At this stage, we may only observe that the CBDT may consider issuing an appropriate circular taking a lenient view as regards the consequences of late filing of the Tax Audit Reports as provided under Section 271B of the Act. We leave it to the better discretion of the CBDT in this regard.”

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