IN THE HIGH COURT OF DELHI AT NEW DELHI
W.P.(C) 2659/2012
COURT ON ITS OWN MOTION ..... Petitioner
Through Mr. O.S. Bajpai and Ms. Prem Lata Bansal, Sr. Advocates (Amicus Curiae).
versus
COMMISSIONER OF INCOME TAX ..... Respondent
Through Mr. Sanjeev Sabharwal, Sr. Standing Counsel.
CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA
HON'BLE MR. JUSTICE R.V.EASWAR
O R D E R
04.05.2012
This matter has been listed pursuant to the office note on letter dated 30th April, 2012
written by Anand Parkash, FCA. In the letter, several problems faced by the assessees are
mentioned. For the sake of convenience, we reproduce the entire letter in this order:
“1. I am a regular income tax practitioner. I draw the attention of this Hon’ble
Court towards the numerous difficulties faced by Income Tax assessees country
wide due to the faulty processing of the Income Tax Returns and the TDS
deducted at source and request that certain directions be issued by this Hon’ble
Court so that lakhs of tax payers are saved from the harassment in filing revised
returns/rectification petitions every year.
2. The Income tax assessees filing Income Tax returns, on receipt of intimations
u/s 143(1), generally are required to pay huge demands which are created because
of mismatch of TDS as claimed in the Income Tax return. This is primarily
because of the fact that department gives credit of TDS which stands reflected in
their online computer records i.e Form No.26AS.
3. Whenever any Department/Govt Office/Bank deducts TDS on behalf of the
assessee he has to file quarterly statement of TDS deducted, along with PAN of
deductee and other details. Even if there is slightest of mismatch in reporting the
particulars of deductee, the TDS deducted by the Department will not reflect in
the Form 26AS and as such, no credit of TDS will be allowed to the assessee
resulting in unnecessary demands and hassles of getting the rectifications done.
4. To get the rectification done, at first the assessee has to request the concerned
department to file a revised statement with correct particulars of deductee and
only after revised statement is filed, the same will start reflecting in the 26AS and
thereafter, the rectification is possible which is a very lengthy procedure. In many
cases the concerned department refuses to revise the statement.
5. The department has communicated the demands outstanding for various years
in their records to the Central Processing Unit without carrying out the necessary
rectifications lying pending at their end and without reconciling their records.
Now Central Process Unit while issuing refunds in the later years adjusts demands
for earlier years. Sometimes the demands for earlier years may not have been
communicated to the assessee. This is totally against the law. To get the necessary
rectification done the assessee has to first approach the assessing officer for
necessary rectification for that assessment year. Then that will be communicated
by the Assessing Officer to the CPC online or as per their records. And thereafter
CPC would issue refund for the Balance amount.
6. The Returns of the assesses who have expired are filed by legal heirs and in
case of refund the same is issued by CPC in the name of dead person only. This
causes great harassment to get the same rectified online or through assessing
officer.
7. In case of ITR filed in ITR 4S by the assessee CPC is not considering the taxes
paid by the assessees even if they are being reflected in Form 26AS. This is some
technical problem in their software.
8. Assesses who are filing their Income Tax return u/s 44AD are not obliged to
pay any Advance Tax as per the provisions of the Income Tax Act, 1961. But,
while processing the Income Tax returns CPC is charging interest u/s 234B, 234-
C in all such cases which is causing unnecessary rectification and paper work as
the same should not be levied at all.
9. If an assessee has duly paid the taxes due to the Income Tax Department u/s
140-A, but he defaults in filing of return within the prescribed period of time,
CPC is still charging interest u/s 234A from the date of payment till the filing of
Income Tax Return. The Hon’ble Supreme Court in the case of Pranob Roy as
reported in 309 ITR 231 has held that interest is compensatory in nature and as
such no interest should be charged when the taxes stands paid either as Advance
Tax or as self assessment tax.
10. During the filing of TDS return by deductor there is possibility of mistake like
PAN being incorrectly mentioned, challan No. being incorrect of Assessment
Year being wrongly mentioned by the deductor and also that no TDS return has
been filed. In this case TDS of deductee will not be shown in Form 26AS and
credit will not be allowed by the Income Tax Department. Whereas there is no
fault of deductee any where.
11. There is possibility that bank punches the wrong details like TDS No., Challan
No. etc. In this case there will error in processing the TDS return filed by
deductor. So, TDS amount will not reflect in Form 26AS (Pan Data) with NSDL
and credit will not allow to deductee whereas TDS was deducted by the deductor.
12. In the facts and circumstances, it is prayed that suitable directions be issued to
the Income Tax Department, to mitigate the hardship of lakhs of tax payers.”
2. Issue notice to Union of India, Ministry of Finance through Revenue Secretary, Central
Board of Direct Taxes through Chairman, Chief Commissioner of Income Tax, Delhi-I
and Director General of Income Tax (Systems), who are impleaded as respondent Nos. 1
to 4 in the present public interest writ petition.
3. In addition to meeting the averments made in the letter, we would like specific
response on the following aspects:
(1) Whether procedure under Section 245 of the Income Tax Act, 1961 is being
followed before making adjustment of refunds and whether assessees are being
given full details with regard to demands, which are being adjusted.
(2) Whether the Revenue is taking caution and care to communicate rejection of
TDS certificates and intimation under Section 143(1) in case any adjustment or
modification is made to taxes paid, either as advance tax, self assessment tax or
TDS.
(3) Whether and what steps are taken to verify and ascertain that the old demands
against which adjustment is being made was communicated to the assessee?
(4) What steps have been taken to ensure that the deductors correctly upload the
TDS details/particulars on the Income Tax website?
(5) What is the remedy available to the assessee and can he/she approach the
Department in case the deductor fails to correctly upload the particulars in his/her
cases?
(6) Whether an assessee can get benefit of TDS deducted or/and paid but not
uploaded by the deductor and procedure to claim the said benefit?
Counter affidavit will be filed on or before 29th May, 2012. The counter affidavit will
indicate and give full particulars with regard to the following:
(i) Number of assessees where income tax refund in the last year has been
adjusted against demand for earlier years.
(ii) The quantum adjusted.
(iii) Cases/instances in which action has been taken against deductors, who in
spite of request made by the assessee have not correctly uploaded the TDS
details.(In respect of Delhi jurisdiction) The first two figures/particulars will be
furnished on the basis of computerized records maintained by the Income Tax
Department on their system. If no such record is maintained/available on the
system, it shall be indicated and the respondents need not furnish the said details.
We have requested Mr. O.S. Bajpai and Ms. Prem Lata Bansal, Sr. Advocates, who are
present in the Court, to appear in this matter as Amicus Curiae. Both of them state that
the assessees are facing difficulty and harassment as in several cases new PAN card/
numbers are issued, when an application for rectification is filed. It is submitted that
when new PAN number is issued, the assessees do not get credit of the taxes
paid/deducted under the old PAN number. It is stated that new addresses are mentioned
in the returns, which are uploaded on the Income Tax website. This should be treated as
intimation to the Department about change of address. Address is not stated or mentioned
on the PAN card. Assessees specially the young middle class do frequently change their
city or addresses. Sometimes, the assessees are asked to apply for rectification of PAN
details separately even if the new address/details are furnished in the return. They have to
submit the old PAN card and, therefore, for months they are without the original PAN
card. Assessees now require PAN card for almost everything. This puts them to
inconvenience and harassment without any palpable advantage or benefit to the
Department. The counter affidavit will deal with the said aspects.
List on 30th May, 2012.
Copy of this order be given dasti to the learned counsel for the parties under signature of
the Court Master.
SANJIV KHANNA, J.
R.V. EASWAR, J.
MAY 04, 2012
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