The author, one of the innumerable victims of the department’s gross inefficiency in matters of TDS credit & refunds, sees a ray of hope in the High Court’s tough stand in seeking to rein in the department’s wayward ways. The author urges all affected tax payers to raise their voices against the department’s harassment and strengthen the Court’s hands.
“Courts are not meant only for the rich and the well-to-do, for the landlord and the gentry, for the business magnate and the industrial tycoon, but they exist also for the poor and the down-trodden the have-nots and the handicapped and the half-hungry millions of our countrymen” Bhagwati J. in Peoples Union for Democratic Rights v. Union of India (AIR 1982 SC 1473)
When Anand Parkash, FCA, wrote a letter dated 30.4.2012 to the High Court, he did so in a sense of utter helplessness and frustration. He was voicing the angst of millions of tax payers across the Country at the numerous difficulties faced by them due to the faulty processing of Income-tax returns and TDS credit. In heart-felt emotion but with a clarity that years of professional training as a Chartered Accountant had bestowed, Anand Parkash meticulously listed out his litany of woes. Anand Parkash pointed out that in processing the s. 143(1) intimation, there was invariably a mismatch between the TDS credit claimed and the TDS credit granted and demands were raised on this score. The department ignores the figure of TDS credit claimed and mechanically grants credit for the credit shown in the online computer records of Form No.26AS. If the assessee writes a letter to protest against the department’s action and produces proof of the TDS, he is ignored. Against the bogus demand so raised, future refunds are adjusted.
Anand Parkash’s cry for help struck a chord with the Judges. They were quick to take judicial notice and convert the letter into a public interest litigation. What is more interesting is that the judges were not content to go by Anand Parkash’s litany of woes but shot their own barrage of questions at the department
Worse, Anand Parkash pointed out, if the deductor makes a slight mistake in entering the payee’s name or PAN, the TDS will not appear in the payee’s Form No. 26A and he will never get credit for the same. The only solution for this is to pursue the deductor and get them to file a revised TDS statement with the corrected details. This is easier said than done. If the deducted happens to be a government organization like the income-tax department, then even God cannot help you. The same problem arises if there is a problem with the challan number or the assessment year or if the bank makes a mistake while reporting the payment of TDS. Also, suppose a demand is raised because you haven’t been given credit for advance-tax or SA tax. You file an application for rectification with the CPC which is totally ignored. The amount continues to show as an arrear and you will continue to get threatening letters. Future refunds are promptly adjusted against the so-called demand.
Fortunately, for Anand Parkash and the millions of tax payers across the Country, we live in a time when a humble postcard from the poor and the oppressed is sufficient to move the conscience of the Court and it rushes forward, sword drawn, to defend the helpless sufferer from the heartlessness of the State.
The tone and quality of questions shows that the Judges are well versed in the subject and are very serious about the issue. Here, one must compliment the individual judges concerned because it is because of their deep knowledge of the subject, both theoretical and practical, that this kind of judicial activism is possible
Anand Parkash’s cry for help struck a chord with the Judges. Who knows, maybe they have also been victims of the department’s high-handedness at some stage or the other. Whatever the reason, the Judges were quick to take judicial notice and convert the letter into a public interest litigation. What is more interesting is that the judges were not content to go by Anand Parkash’s litany of woes but shot their own barrage of questions at the department. The Court demanded to know whether the department was taking care to communicate rejection of TDS certificates and non-grant of credit to the assessee or the demand was being raised behind the assessee’s back for surreptitious adjustment at a future date. The Court also wanted to know what steps had been taken to ensure that the deductors correctly upload the TDS details on the Income-tax website. Also, the Court queried whether an assessee can get benefit of TDS deducted or/and paid but not uploaded by the deductor.
Not content with getting abstract answers from the department, the Court has also demanded statistics from the department on the number of assessees where income tax refund has been adjusted against demand for earlier years, the quantum thereof and 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
Also, not wanting to let the department wriggle out at any stage, the Court nominated two eminent senior advocates, Mr. O.S. Bajpai and Ms. Prem Lata Bansal, to assist it in the matter as Amicus Curiae and to keep an eagle eye on the proceedings. Both senior advocates have decades of experience and testified to the difficulty and harassment being faced by the assessees.
The tone and quality of questions shows that the Judges are well versed in the subject and are very serious about the issue. Also, the questions are loaded and designed to trap the department if they give wrong answers. For instance, if the department says that credit for TDS cannot be given if the deductor has not filed a TDS return, it will be going contrary to s. 199. On the other hand, if it says that credit has to be given, then the statistics do not support it because it has never given credit. Here, one must compliment the individual judges concerned because it is because of their deep knowledge of the subject, both theoretical and practical, that this kind of judicial activism is possible. Justice Sanjiv Khanna was the Senior Standing Counsel for the department and knows the ins and outs of its (mal)functioning. Justice R. V. Easwar needs no introduction at all. Having qualified as a Chartered Accountant and lawyer and being the President of the Tribunal, few judges can boast of his depth of knowledge on income-tax law.
So, the future does look bright for the beleaguered assessees. Under the heat of the Court’s glare, the department is bound to reform its wayward ways and this can only be good news for the assessees. Keep watching this space till then!
Vellalapatti Swaminathan Iyer