Court on its Own Motion vs Commissioner of Income Tax

Learned counsel for the Revenue states that he requires some more time to file the counter affidavit as the issues raised are pending consideration with the authorities. He states that a Counter for receipt of complaints/ applications for rectification has been opened at Laxmi Nagar and more Counters will be opened shortly. However, the Standing Counsel is unable to state how thereafter the applications/letters will be processed and how and when the assessee will be informed about the outcome of their complaints/ applications. Our order dated 04.05.2012 is fairly detailed and refers to various issues and aspects which require consideration. We would like to crystallize some points on which specific response is required: -

(i) Whether it is possible to have a centralized window for receipt of applications in case benefit of TDS certificate is refused or refund due has been adjusted against a demand for a previous year? The application once received should be processed within a specified time frame and the assessee should be informed by post.

(ii) Whether single Window Counter can be set up for assessees to make complaints that the deductor has not correctly uploaded the details as a result of which the assessee is not getting the credit of the TDS?

(iii)(a) Nagesh Kumar Behl, who has moved an application being C.M. No. 7309/2012 has stated that the problem regarding adjustment of refunds where even no tax demand for earlier year was pending has arisen because the Assessing Officers have failed or neglected to upload correct data. The Assessing Officers have uploaded the data on the basis of Section 143(1) intimation without verifying/ referring to the rectification order/ benefit subsequently granted. The assessees are put to inconvenience and expenditure is incurred on visits as incorrect data has been loaded. Thus for the fault of the Assessing Officer in uploading correct and accurate data, the assessees are penalized and suffer harassment.

(b) This is a serious matter. It is alleged that the demands have been uploaded in the server for several assessment years, though no amount/demand is payable. It is stated that the uploading/ demand created, is contrary to the official records and wrong as the Assessing Officers have failed and neglected to correctly upload the data despite instructions of the Board. It will be stated whether this correct and what action has been taken or contemplated by the Board?

(iv) Whether it is possible to upload and mention on the website details of intimation issued u/s 143(1) of the Income Tax Act, 1961 (''Act'', for short) with particulars like amount adjusted, TDS or taxes which have not been credited, when and how the intimation was communicated/ served?

(v) The return itself is treated as an intimation u/s 143(1), unless the Assessing Officer makes adjustments. In case adjustment is made, the Assessing Officer is required to communicate his order u/s 143(1). The general complaint/ grievance is that intimation is not communicated to the assessee even in cases of adjustments. If this is correct, what steps have been taken to remedy the said grievance?

(vi) Whether prior intimation/ information is being sent to the assessees before adjustment of refund as per Section 245?

(vii) Under the Act benefit of TDS can be taken in the year in which the income on which TDS deducted is assessed and shown as assessable. There can be mismatch between the year in which the deductor has deducted the tax and the assessment year in which the assessee had declared the said income. The online form/ details do not take care of such cases.

(viii) There are several cases where the deductors do not fill up the correct details of the deductee. In such cases the option is given to the deductor to rectify but the said process is very cumbersome. The respondents will examine whether their software can be programmed to refuse/ reject uploading of incorrect data, thus compelling the deductor to feed correct information and the deductor can come to know that the particulars filled up are incorrect and require rectification.

(ix) Whether department has informed the deductors about incorrect details and has asked them to rectify the errors within a time period? In case of failure, what action is taken? What happens when a complaint is made by the deductee?

(x) Whether the payment of interest on refund u/s 244A is incorporated in the software itself so that when the refund due is calculated it is inclusive of interest, if payable. It is also pointed out that in many cases there is delay between date of determination of refund and issue of the refund cheque/ transfer but interest for said period is not paid.

(xi) Even otherwise refund due are not paid with interest. Whether, the application/request for interest can be entertained by post or by email and answered within a specified time frame?

(xii) It is pointed out that without password and user name, online returns cannot be filed. It is stated that in many cases password or user name get misplaced or are forgotten. It is very difficult to get a response and reply from the authorities regarding the user name and password. What is the procedure in such cases and whether any time frame is fixed for response to such requests? What is the remedy for the assessee in case there is delay and lapse on the part of the authorities in furnishing password/ user name?

(xiii) The respondents shall examine and state whether on line viewing of Form 26 AS can be made easier and without use of password and the details available made more elaborate and complete.

(xiv) The information and advantage of Rule 37BA of the Income Tax Rules, 1962 must be disseminate and published for the benefit of assessee/ public and deductors so that assessee can claim benefit of tax deducted at source in respect of income which is assessable in his hand.

With reference to C.M. No. 7309/2012 we have heard Mr. Nagesh Kumar Behl, who is present in person and who has given us relevant details which have been incorporated in the order. We do not think that it is necessary for him to become a party to this case. However, liberty is given to him and in case any input is required, he may furnish the same. The application is disposed of.

These aspects will be examined by the respondent and remedial steps required and necessary will have to be taken. Reply affidavit will be filed within six weeks. List on 24.07.2012.