Economy

Covid relief: Delhi HC asks I-T Dept to give 3 weeks notice to assessee before taking any coercive action

Shishir Sinha New Delhi | Updated on May 08, 2021

Petitioners plead for issuance of directions for waiver of charges towards tax payment delay

The Delhi High Court has asked the Government to give three-weeks prior notice to ‘any assessee’ if coercive action is to be taken in terms of tax compliance. The Court was hearing a petition filed by taxpayers and petitioners.

The petition raised questions on the inability of the State to recognise the fact that the Covid-19 pandemic has engulfed one and all and therefore, the statutory timelines provided under the Income-Tax Act need to be extended. The petitioners also pleaded for issuance of necessary directions for waiver of penalty, interest and other charges towards delay in the payment of tax, filing returns, and other requisite information/forms/details as mandated under t Act.

“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 three 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,” a division bench of Justices Rajiv Shakdher and Talwant Singh said.

The Bench also permitted the tax department to approach the Court for direction in a given case after issuing notices to tax departments of the Centre and the Delhi Government.

Demand for further easing

This matter is being heard at a time when the Finance Ministry has already extended time lines for compliances under the Income-Tax Act and GST. It has also lowered late fee in case of delayed compliances. Still, there have been continuous demand from tax professionals and taxpayers for further easing the compliance. Also, they feel any kind of coercive action needs to be avoided.

“It is argued and, to our minds, correctly, that since the daily rate of infection has crossed 4,00,000 cases, coupled with the per day death rate of nearly 3,900, it is incumbent that respondents be called upon to take necessary ameliorative steps as outlined in the petition,” the Bench said. Further, it expressed its view that that the matter requires examination.

The Bench has appointed Zoheb Hossain as the Amicus Curiae (Impartial advisor to the court) in the matter. The matter will now be heard on May 13.

Commenting on the order, Puneet Agrawal, Gaurav Gupta and Nishank Vashishth of ALA Legal, Advocates & Solicitors said the ad-interim direction is a step in the direction for the Government to take ameliorative steps in response to the challenges and extreme difficulties posed by Covid-19, particularly the hardship faced by taxpayers and tax professionals.

“It comes as a relief for all the assessees and the entire professional fraternity, while at the same time initiating a dialogue with the respondents —, i.e. Union of India, GST Council, CBIC, CBDT, GNCTD. Further, the court would also be considering to extend various dates of compliance under tax laws,” they said.

Published on May 07, 2021

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