The Chamber Of Tax Consultants Through Its President Mr. Vijay Bhatt & Ors. vs Director General Of Income Tax (Systems) & Ors.

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The petitioners, comprising the Chamber of Tax Consultants and individual taxpayer assessees, filed a Public Interest Litigation challenging the modification of the online income-tax return filing utility by the Income Tax Department with effect from 5 July 2024, which denied assessees the benefit of claiming a rebate under Section 87A of the Income-tax Act, 1961 against tax computed on special rate incomes under Chapter XII of the Act for Assessment Year 2024-25. Prior to that date, the utility permitted such claims. Despite representations made by the petitioners and other associations to the respondents, no relief was granted, necessitating judicial intervention.

The Court, led by the Chief Justice, had earlier on 20 December 2024 granted interim relief directing the Central Board of Direct Taxes to issue a notification extending the due date for e-filing of income-tax returns so as to enable eligible taxpayers to exercise their statutory right to claim the Section 87A rebate without procedural impediments. Pursuant to this direction, CBDT extended the last date for filing returns under Sections 139(4) and 139(5) for Assessment Year 2024-25 in the case of resident individuals from 31 December 2024 to 15 January 2025.

The petitioners sought writs of mandamus directing the respondents to modify the return filing utilities to allow assessees to claim the Section 87A rebate for AY 2024-25 and subsequent years, including in revised returns filed under Section 139(5), and alternatively to permit manual filing of returns for claiming such rebate, raising important questions concerning the legality of administrative restrictions imposed through software utilities on substantive statutory rights of taxpayers.

Catchwords: Section 87A rebate · income-tax return filing utility · online filing · Chapter XII special rate income · CBDT · e-filing utility modification · taxpayer rights · mandamus · assessment year 2024-25 · revised return · Section 139(5) · procedural impediment · Public Interest Litigation · tax rebate denial