Court On Its Own Motion vs. CIT (Delhi High Court)

COURT:
CORAM:
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: (Date of pronouncement)
DATE: May 19, 2012 (Date of publication)
AY:
FILE:
CITATION:

Click here to download the judgement (court_motion_refund_harrassment.pdf)


High Court Takes Notice of TDS Refund Harassment by Dept & Demands Answers

One Anand Parkash, FCA, addressed a letter dated 30.4.2012 to the High Court in which he set out the numerous problems being faced by the assesses across the Country owing to the faulty processing of the Income Tax Returns and non-grant of TDS credit & refunds. He claimed that because of the department’s fault, the assessees were being harassed. The High Court took judicial notice of the letter, converted it into a public interest writ petition and directed the CBDT to answer each of the allegations made in the letter. In addition, the Court demanded an answer to the following issues:

(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?

26 comments on “Court On Its Own Motion vs. CIT (Delhi High Court)
  1. ISHA K says:

    TAX PAYERS ALL OVER THE COUNTRY ARE FACING PROBLEMS DUE TO LACK OF IMAGINATION AND EXPERTISE OF THE OFFICIALS INVOLVED IN THE PREPARATION OF SOFT WARES FOR PROCESSING OF THE INCOME TAX RETURNS AND TDS RETURNS. EVEN IN CASE WHERE IT IS POINTED OUT THAT FALSE DEMANDS HAVE BEEN ADJUSTED AGAINST THE REFUND DUE TO THE ASSESSEE, NO HEED IS PAID BY THE DEPARTMENT. ASSESSEES AND CONSUL FEAR TO TAKE UP THE MATTER WITH HIGHER AUTHORITIES SINCE THE LOWER AUTHORITIES WITH WHOM THEY HAVE TO ROUTINELY INTERACT CREATE DIFFICULTIES FOR THEM. DELHI HC HAS RIGHTLY TAKEN COGNIZANCE OF THE COMPLAINT LETTER AND IF MORE SUCH COMPLAINTS ARE FILED WITH THE DELHI HC IT WILL BE A GREAT SERVICE TO ALL THE TAX PAYERS FOR WHOM OTHERWISE TAKING LEGAL ACTION IS VERY COSTLY AND CAN AVOID THE RETALIATION FROM THE ASSESSING OFFICERS SHOULD THEY DECIDE TO MAKE COMPLAINTS AGAINST THE ERRING OFFICERS.

  2. S.APPAIAH BHAT says:

    IT IS TRUE AND CERTAIN,THAT THE HARASSEMENT IS MADE ALL OVER THE COUNTRY AND NO ONE IS UNABLE TO QUESTION THE WRONG DOERS, BECAUSE OF THE DAILY INTERACTIVITY WITH THE DEPARTMENT.
    BUT,AT THE SAME TIME TO WHAT EXTENT THE MOUTH IS TO BE SHUT.THE SOUNT CAME OUT BY THE ONE FROM WHOM IT HAS REACHED THE HIGH COURT, AND I WISH ON BEHALF OF ALL THE SUFFERERS A HAND FULL OF THANKS IN THIS REGARD.

  3. ram babu B.Com says:

    The efficiently inefficient Finance Minister’s capabilities are known to the middle class citizens of this country very well.
    This sort of court ? s may not move him (particularly the IT Dept.). The PM and the FM both deserve to be made Presidents-at a time of this great ‘Income Tax Dept.’s Democracy and confined to the 4 walls of 365 rooms. Let these think big of themselves and their contribution to the nation. let them spend few 100s of crores for amennities or for foreign trips. NO body bothers.
    It is only when these inefficiently efficient – incorrigible intellectuals are confined to the 4 walls-THEN you can see some change in the IT Dept’s functioning.

  4. Krishna says:

    Commendable questioning. contracts.
    it should bring account.ability to it department for its delays and defaults at par that is levied on assessees

  5. P says:

    GREAT EFFORT. THANKS A LOT.

  6. R K PAHWA says:

    I ask just one question. What is the fault of the deductee if tax has been correctly deducted but not deposited by the deductor. Is it the duty of the deductee to see that the deductor has deposited the tax and uploaded correct particulars in the TDS return. Presently no action is being taken on the erring deductors. TDS Certificates are not issued with an excuse that these can now be downloaded from NSDL website. Assessing Officers do not know what to do. There is a total harassment of deductees whose huge refunds are pending.

  7. P.K.DASS says:

    LOT OF THANKS TO SHREE ANAND PRAKSH.A GREAT SERVICE TO THE TAX PAYERS AS WELL AS STAX PROFESSIONALS.

  8. AKHIL AGGARWAL says:

    THESE INCOME TAX OFFICERS SHOULD BE HELD LIABLE FOR INTEREST ON DELAYED REFUNDS / MENTAL HARRASMENT BEING FACED BY ASSESSEES AND THEIR COUNSELS / SOMETIMES THESE ITO TOTALLY DISREGARD COURTS ORDER LAW OF PRECEDNT ETC. SO CONTEMPT OF COURT PROCEEDINGS SHOULD BE DONE AGAINST THEM AND BENEFIT OF SECTION 293 OF INCOME TAX ACT (BAR OF SUITS IN CIVIL COURTS) SHOUL NOT BE GIVEN TO THESE ITO

  9. ASHIS MAJUMDER says:

    EXCELLENT…JUST EXCELLENT. Mr.Anand prakash you have seriously done a grate job.What I faced like to share her-
    in the year !998-99 I had deposited two installments of advance tax in a wrong PAN no in State Bank of India Br.But, the matter came into light when the department through it’s CPC, Bangaluru office sent a demand note in the year 2011-12, i.e. the dept.took long 3 years to intimate the demand of tax..he dept.never intimated the asessee (u/s143-1) the said demand within the specified time,but, sent demand note about a year past. In consequence of which the later period refunds are being adjusted by the dept. without acknowledging the same (before adjustment) to the asessee-which till date crept by the dept
    Question comes to whom I would approach–when I approached to my AO, he intimated that he has no power to interefere into this, as the same was done by the officials of the CPC, Bangaluru..a very ridiculous and truly anti-aseesee steps/method adopted by the department

  10. MANOJ SHARMA, Advocate says:

    Not withstanding all the problems already highlighted, the processing of ITR’s relating to AY 2011-12 has thrown up a new spanner in the wheels. Any Self Assessment Tax paid by the assessee in the said year is not being provided due credit despite the same duly showing up in the Tax Credt Statement (26AS). The probable reason for this being: the excel sheet of the return does not allow ‘0’ (zero) to be typed in case of it being the first digit of the CIN. This makes the CIN a four digit one and results in CIN mismatch….Is the department not goingto give credit based on Form 26AS ??? The assessee is not supposed to deal with the intricacies of ITD’s faulty excel software…And the Counsels are left fuming and uploading tons of Rectification Petitions !!!! Wonder what IT practice is coming to….

  11. P.Haramohan says:

    Indeed the effort put in by Mr. Prakash is really noteworthy.
    It is expected that CBDT will soon come up with its reply to the PIL and mend ways for smoothen the process of I.T.Refunds including long pending matters too.

  12. P.Haramohan says:

    Indeed the effort put in by Mr. Prakash is really noteworthy.
    It is expected that CBDT will soon come up with its reply to the PIL and mend ways to smoothen the process of I.T.Refunds including long pending matters too.

  13. Amit Rustagi says:

    My experience for TDS, once it is deducted…its gone and no way to get the amount adjusted by the deptt or getting refund in case of excess deduction…however, the move by HC is welcome subject to the strict process laid down by the CBDT….Nevertheless, it’s an great efforts by Mr Anand.

  14. gangaram chandwani says:

    Shri Anand prakash’s effort is appreciated and there is no mention of any reply by
    CBDT . It is believed that there are thousands of cases of dedectors failure to deposit the deducted
    amount and income tax department panelises the innocent deductees by not giving them credit. In most of the cases no action is taken by department against deductors in default for the reasons known to them. Why CBDT does not action against erring officers.

  15. vijay says:

    Excellent job Mr. Prakash.

  16. jitesh sonee says:

    The same shall be of great help as till data CPC is sending 2001 or later years demand and papers are usually available in both sides, but the dept has been asked to inform CPC about pre 2001 demands and that shall be real dilemma for assessees.

  17. Krishna Patil says:

    Who will bell the cats? Mr.Prakash is done in the interest of the Public and bell the cats?. Now it is the turn of the High Court to handle the situation till the noncense is stopped by the cats.

  18. Krishna Patil says:

    Who will bell the cats? Mr.Prakash is done with great courage by taking the matter to the High court. Now it the Judicials turn to give the justice to the tax payers

  19. CA. Ranjana Pandey says:

    Creditable job!
    Even the banks and government agencies do not upload the tds.

  20. CA Goutam Baid says:

    Salute to CA Anand Prakash for his Nobel efforts.

    Hope, that the CBDT and FM will accept the harassment to the taxpayers, and if they fails to do the same, hope with more confidence that the court will direct the FM and CBDT to end this harassment.

    Here are some more issues which I have also raised through a RTI application:

    Date: 10/05/2012

    To
    Central Public Information Officer,
    O/o DIRECTOR OF INCOME-TAX (SYSTEM) I
    AAYAKAR BHAWAN
    VAISHALI
    GHAZIABAD 201010

    Sub: application for Information under RTI Act, 2005

    With reference to above cited subject your good self kindly requested to provide certified information for the following:

    1. Regarding interest u/s 234A of Income Tax Act, 1961
    Background
    a. Hon’ble Supreme Court in the case of CIT vs. Pranoy Roy reported in 309 ITR 231 held affirming the decision of Hon’ble Delhi High Court in the case of Dr. Prannoy Roy v. CIT 254 ITR 755 that where the tax paid up to due date of filing of return was not less than the tax payable on the returned income which was accepted, the interest under section 234A could not be charged, even if the returned was filed after the due date.
    Information required
    a. Whether the decision rendered by the Hon’ble Supreme Court in the above referred case is applicable to the specific case for which the same was rendered or the legal interpretation made by the Hon’ble Supreme Court is the law of land and has to be applied to the income tax proceedings of all assessees.
    b. Whether the system of the department, while processing of the returns of income in cases where return was filed after the due date specified u/s 139(1), but the tax had paid prior to the due date of filing of return, charges interest u/s 234A for the period from ‘due date of filing of return of income’ to ‘date of filing of return of income’? If such interest is charged contrary to the decision of Hon’ble Supreme Court, whether there is any amendment in the income tax act, 1961 retrospectively or prospectively, kindly provide details of amendment, if any?
    c. If interest is charged u/s 234A contrary to the decision of Hon’ble Supreme Court in the case referred above, kindly provide the amount of interest charged in such cases during the financial year 2009-10, 2010-11 and 2011-12 seprately.

    2. Regarding interest u/s 234B and 234C in the case of assessee covered u/s 44AD.
    Background
    a. Sub section (4) of section 44AD provides that the provisions of Chapter XVII-C – Advance Payment of Tax shall not apply to an eligible assessee in so far as they relate to the eligible business.
    b. As the assessee covered u/s 44AD need not to pay advance tax, no interest u/s 234B and 234C can be charged in the case of such assessee on the income covered u/s 44AD.

    Information required
    a. Whether there is any issue identified by the Directorate in charging of interest u/s 234B and 234C due to provisions of sub-section (4) of section 44AD?
    b. Whether the interest u/s 234B and 234C charged while processing of the return of income even in the cases of assessee covered by the provisions of section 44AD?
    c. In the case of assessee declaring income u/s 44AD also having income from other sources, whether the interest u/s 234B and 234C charged on the tax on total income including income declared u/s 44AD or the interest u/s 234B and 234C charged only on the tax on income other than the income covered u/s 44AD?
    d. If the interest u/s 234B and 234C charged only on the tax on income other than the income covered u/s 44AD, then, whether the assessee liable to paid advance tax or not is determined on the basis of tax on total income including income covered u/s 44AD or on the basis of tax on total income excluding income covered u/s 44AD?
    e. If the liability of advance tax is determined on the basis of tax on total income excluding income covered u/s 44AD, kindly provide the method of calculation of the amount on which the interest u/s 234B and 234C to be calculated.
    f. Kindly provide the amount of interest charged u/s 234B and 234C in the cases of assessee covered by the section 44AD for the AY 2011-12.
    g. Whether any rectification application filed by any assessee stating that the charging of interest u/s 234B and 234C while processing the return u/s 143(1) was incorrect?
    h. Kindly provide details, if more than one rectification applications filed, no of applications so filed and the amount of interest charged u/s 234B and 234C in such cases cumulatively.
    i. Kindly provide details, if any such rectification application filed by any assessee, whether the intimation u/s 143(1) got rectified and interest charged u/s 234B and 234C removed?
    j. Kindly provide details, if on the reprocessing of the return on receipt of rectification request, if again interest u/s 234B and 234C charged, whether the assessee was intimated that the charging of the interest u/s 234B and 234C in cases covered by the section 44AD is correct and in accordance with the provision of law or assessee was simply ask to pay the interest u/s 234B and 234C without assigning any reason for the same.

    3. Regarding processing of rectification application:
    Background
    a. As per the Rectification manual available on the e-filing portal on request of the rectification whole return will be reprocessed.
    b. As per the Manual of Office Procedure, Volume I issued by the Directorate of Income Tax (Organisation & Management Services) in February 2003 specified at page 144 in para 4.5.5 that the rectification application has to be disposed off by passing a ‘speaking order’.
    c. Sub-section (8) of section 154 provides that the rectification application filed by the assessee must be disposed within six months.

    Information required
    a. Kindly provide no of rectification applications filed to the CPC for the AY 2009-10, 2010-11 and 2011-12.
    b. Kindly provide the no of rectification application yet to be disposed of by the CPC for the AY 2009-10, 2010-11 and 2011-12.
    c. Whether all the rectification application filed online by the assessee disposed off within six months period as laid in the sub section (8) of section 154? If not how much applications were disposed of after the
    d. Kindly provide details, while re-processing of the return on the rectification request, whether the mistake apparent from record as stated in the reasons for rectification were considered or the return was mechanically processed?
    e. Kindly provide details, in case of no change in the reprocessing of the ITR, whether any speaking order passed stating as to why the mistake stated by the assessee are not entertained or as to why the mistake stated was not a mistake at all or the at least not a mistake apparent from record.
    f. Kindly provide details, in cases where the rectification application made by the assessee rejected and not processed, whether the exact reason for rejecting of the rectification application intimated to the assessee?
    g. Kindly provide details, in cases where the rectification application made by the assessee rejected and not processed on the reason that the CPC will rectify the same suo moto, rectification by the CPC suo moto done simultaneously or it will take time? Kindly provide certified copies of administrative guideline and reasons as to why, instead of processing of the rectification application filed by the assessee CPC officials required to made rectification themselves?
    h. Whether the demand raised against the assessee due to incorrect processing of the return, on filing of rectification application stayed by the CPC?
    i. Whether the recovery of demand stayed or not in the case of rectification application rejected by the CPC on the reason that the rectification will be suo moto made by the CPC?
    j. Whether the undue hardship caused to the assessees due to recovery of demand, even in the case of pendency of the rectification application or rejection of the rectification application for the reason that the suo moto rectification will be done by the CPC, ever discussed in the directorate? If ever discussed, kindly provide the details of the discussion made and the decision taken on the subject.

  21. Jayesh Mistry says:

    Yes we all CA & Consultant fight for all the matters going all over.

  22. SURENDRA DIDWANIA says:

    Excellent work, Dear Anand. I hope with this initiative of your’s lacs of Assessees will be benefited. I Salute to CA Anand Prakash for his Nobel efforts.

  23. s.srinivasan says:

    Sirs
    One small though significant impact is on the interest charged under section 234 C. Though the CBDT circular clearly stipulates that the tendering of cheque would be taken as the date of payment, if the cheque is cleared, in all the intimations received from CPC, the date of the credit of the instrument has only been taken and interest has been charged. Even the application under section 154 quoting the CBDT does not impress the CPC. forcing the filing of appeal by the assessese or payment of the interest
    This also needs to be looked into
    Thanks
    srinivasan

  24. DINESH KUMAR GOEL says:

    The efforts of Sh. Anand Prakash is worth appreciating. In today era, when most of the people do not want to do any act gratuitously, especially the professional, Sh. Anand Prakash has very rightly and elaborately submitted all the practical difficulties faced by a layman when he has to deal with the department . Even the action of the judiciary is also worth praising. Since the matter is under consideration, we are hopeful that some concrete action will be taken and public at large will get benefit from it.

  25. Mohit Gupta says:

    The efforts are totally appreciable…Thanks alot to CA Anand Parkash and CA Goutam Baid.
    Please give a copy of reply if received to email camohitgupta1@yahoo.com

  26. seetharamaiah srinivas says:

    I appreciate Gowtham Baidji for his intriguing questions to CPC. I hope he has got the answers by now and if he can share the same, it would greatly help the taxpayers/professionals. Further, similar questions need to be answered by CPC Bangalore which has turned out max work. Kindly keep the pressure on authorities for a responsible behaviour which is the right of the assessees.

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