THE issues before the Bench are - Whether when the TDS credit
is reflected in 26AS, AO is expected to give the credit even without waiting for
an application by the assessee u/s 154 and also sanction refund if any and
Whether in an electronic regime, Revenue is expected to be more proactive in
facilitating refunds of TDS Credit reflected in 26AS. And the verdict favours
the assessee.
Assessee filed return of income claiming refund of Rs. 2.11 lakhs. Return was processed at centralized processing unit in which TDS credit was not given of Rs. 3.78 lacs resulting into demand of Rs. 1.67 lacs. An application was made u/s 154 pointing out the mistake. However, since no reply / communication was received and no rectification was made, assessee went in writ.
Revenue contended that since the assessee failed to furnish all the relevant information as was required u/s 139(1) adjustment of TDS was not allowed. Further it was contended that since the records were not transferred from the CPU, the assessing officer was not authorized to accede to any request of assessee. Revenue contended that the rectification application was attended by CPU in which it was observed that tax payments had not matched as proper details like BSR Code, Date of Deposit, Challan sequence number, Exact amount paid in case of multiple payments, Details of each payments to be furnished had not been furnished by the assessee.
Assessee contended that all relevant details for claiming the TDS amount were submitted including Form 16A and revenue was aware that TDS credit was required to be given and yet, for the reasons best known to them, the said mistake had not been corrected till the date. Moreover, the system was online and all details of TDS were available on the net. Tax had been deducted by the public limited companies/government companies and the complete details, which match with the payments; with BSR code; deposit challans, etc. had been furnished. Revenue did not controvert the facts as mentioned by assessee. It was further contended that despite extensive computerization in the Incometax Department, no fruitful benefits were available to the assessee.
After hearing both the parties, the High Court held that,
++ the return has been filed electronically, wherein, the petitioner has made a claim for deduction of TDS as per Form 26AS u/s 203AA. This is also visible from the website of the Department. Form 26AS, available on the net, clearly reflects different dates on which payment had been credited and total tax deducted at source by various companies viz., Messrs. Indian Oil Corporation Limited; GAIL India Limited; Futura Travels Limited; Hindustan Petroleum Corporation Limited, etc. While passing the final order, there is a complete absence of taking into account the said amount of TDS in the computation as has been accepted by the Department as well;
++ revenue have not succeeded in bringing anything on the record to indicate any default on the part of the petitioner to furnish any of the documents that have been directed. When the only claim which appears to have been missed out in computation is the TDS amount deducted by various government companies, while detailing with the petitioner and when such details are available online in Form 26AS, and when these details to the Court have been provided, there is no reason why there should be absence of such amount in the final computation of the e-return of the petitioner;
++ one glaring aspect that needs to be noted is that the revenue has reflected rejection of rectification application by way of reproducing a part of the order. Revenue has blissfully chosen not to respond to the notice of this Court, nor order on rectification application is brought on the record. We are not convinced from such reproduction as to in which manner assessee failed in furnishing necessary details which would have entitled the Department to discard the total amount of TDS, while computing the return of the petitioner, when all the details of TDS are available with the Department. What all it needs to do is to compute, as required u/s 143 (1). Instead of that, the revenue has adamantly continued to take a stand of this being a failure on the part of the petitioner to comply with the directions. Computerization in every Department is objected with a view to facilitate easy access to the assessee and make the system more viable and transparent. In the event of any shortcoming of software programme or any genuine mistake, the Department is expected to respond to such inadvertence spontaneously by rectifying the mistake and give corresponding relief to the assessee. Instead of that, even when it is being brought to the notice of the Department by the assessee, by a rectification application and subsequent communication, not only it has chosen not to rectify the mistake, but, the lack of inter departmental coordination has driven the assessee to this Court for getting his legitimate due. This attitude for sure does not find favour with the Court. Tax payers friendly regime is promised in this electronic age. For want of necessary coordination between the two departments, the assessee cannot be expected to be sent from pillar to the post. When a glaring mistake was pointed out to the authority, it ought to have amended the order of assessment by exercising powers under section 154 of the Act, which in the present case, the authority failed to exercise and consequently, the petitioner was compelled to approach this Court by way of the present petition;
++ If the Centralized Processing Center meant for return processing, accounts, refund, storage of data etc. adds to the difficulties of the Tax payers, due to lack of distribution of work between back office and front office, and that too, after having been pointed out the actual error, a serious relook is expected;
++ revenue is directed to take into account the total sum of TDS as is reflected in Form 26AS and after computing such TDS amount, issue refund in the name of the petitioner. The exercise of granting refund to the petitioner must be completed within four weeks from the date of receipt of this order. Rule made absolute accordingly.
Facts of the
case
Assessee filed return of income claiming refund of Rs. 2.11 lakhs. Return was processed at centralized processing unit in which TDS credit was not given of Rs. 3.78 lacs resulting into demand of Rs. 1.67 lacs. An application was made u/s 154 pointing out the mistake. However, since no reply / communication was received and no rectification was made, assessee went in writ.
Revenue contended that since the assessee failed to furnish all the relevant information as was required u/s 139(1) adjustment of TDS was not allowed. Further it was contended that since the records were not transferred from the CPU, the assessing officer was not authorized to accede to any request of assessee. Revenue contended that the rectification application was attended by CPU in which it was observed that tax payments had not matched as proper details like BSR Code, Date of Deposit, Challan sequence number, Exact amount paid in case of multiple payments, Details of each payments to be furnished had not been furnished by the assessee.
Assessee contended that all relevant details for claiming the TDS amount were submitted including Form 16A and revenue was aware that TDS credit was required to be given and yet, for the reasons best known to them, the said mistake had not been corrected till the date. Moreover, the system was online and all details of TDS were available on the net. Tax had been deducted by the public limited companies/government companies and the complete details, which match with the payments; with BSR code; deposit challans, etc. had been furnished. Revenue did not controvert the facts as mentioned by assessee. It was further contended that despite extensive computerization in the Incometax Department, no fruitful benefits were available to the assessee.
After hearing both the parties, the High Court held that,
++ the return has been filed electronically, wherein, the petitioner has made a claim for deduction of TDS as per Form 26AS u/s 203AA. This is also visible from the website of the Department. Form 26AS, available on the net, clearly reflects different dates on which payment had been credited and total tax deducted at source by various companies viz., Messrs. Indian Oil Corporation Limited; GAIL India Limited; Futura Travels Limited; Hindustan Petroleum Corporation Limited, etc. While passing the final order, there is a complete absence of taking into account the said amount of TDS in the computation as has been accepted by the Department as well;
++ revenue have not succeeded in bringing anything on the record to indicate any default on the part of the petitioner to furnish any of the documents that have been directed. When the only claim which appears to have been missed out in computation is the TDS amount deducted by various government companies, while detailing with the petitioner and when such details are available online in Form 26AS, and when these details to the Court have been provided, there is no reason why there should be absence of such amount in the final computation of the e-return of the petitioner;
++ one glaring aspect that needs to be noted is that the revenue has reflected rejection of rectification application by way of reproducing a part of the order. Revenue has blissfully chosen not to respond to the notice of this Court, nor order on rectification application is brought on the record. We are not convinced from such reproduction as to in which manner assessee failed in furnishing necessary details which would have entitled the Department to discard the total amount of TDS, while computing the return of the petitioner, when all the details of TDS are available with the Department. What all it needs to do is to compute, as required u/s 143 (1). Instead of that, the revenue has adamantly continued to take a stand of this being a failure on the part of the petitioner to comply with the directions. Computerization in every Department is objected with a view to facilitate easy access to the assessee and make the system more viable and transparent. In the event of any shortcoming of software programme or any genuine mistake, the Department is expected to respond to such inadvertence spontaneously by rectifying the mistake and give corresponding relief to the assessee. Instead of that, even when it is being brought to the notice of the Department by the assessee, by a rectification application and subsequent communication, not only it has chosen not to rectify the mistake, but, the lack of inter departmental coordination has driven the assessee to this Court for getting his legitimate due. This attitude for sure does not find favour with the Court. Tax payers friendly regime is promised in this electronic age. For want of necessary coordination between the two departments, the assessee cannot be expected to be sent from pillar to the post. When a glaring mistake was pointed out to the authority, it ought to have amended the order of assessment by exercising powers under section 154 of the Act, which in the present case, the authority failed to exercise and consequently, the petitioner was compelled to approach this Court by way of the present petition;
++ If the Centralized Processing Center meant for return processing, accounts, refund, storage of data etc. adds to the difficulties of the Tax payers, due to lack of distribution of work between back office and front office, and that too, after having been pointed out the actual error, a serious relook is expected;
++ revenue is directed to take into account the total sum of TDS as is reflected in Form 26AS and after computing such TDS amount, issue refund in the name of the petitioner. The exercise of granting refund to the petitioner must be completed within four weeks from the date of receipt of this order. Rule made absolute accordingly.
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