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2013 (8) TMI 370 - HC - Income TaxTDS Credit - Revenue missed out giving credit of the TDS - Rectification of mistake u/s 154 of the Income Tax Act, 1961 When assesse 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 Held that - Respondent no. 2 has failed to perform its duty as provided under section 154 of the Act. 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 - Respondents are 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 Assessee Petitioner is also being permitted to make additional claim of refund, which shall be considered by the respondents in accordance with law and permit him more refund; if he is entitled to. The exercise of granting refund to the petitioner must be completed within four weeks from the date of receipt of this order Decided in favor of Assessee.
Issues Involved:
1. Refund of TDS amount. 2. Rectification under Section 154 of the Income Tax Act. 3. Jurisdictional authority and inter-departmental coordination. 4. Compliance with Section 143(1) of the Income Tax Act. 5. Computerization and efficiency of the Income Tax Department. Detailed Analysis: 1. Refund of TDS Amount: The petitioner, an assessee, filed his income tax return electronically for the Assessment Year 2010-11, declaring a total income of Rs. 8,61,077 and claimed a refund of Rs. 2,11,415 after adjusting TDS of Rs. 3,78,608. The respondent failed to give credit for the TDS amount, resulting in a tax payable determination of Rs. 1,93,429. The petitioner applied for rectification, which was not properly addressed, leading to the filing of this writ petition seeking the refund along with interest. 2. Rectification under Section 154 of the Income Tax Act: The petitioner pointed out the mistake in the TDS credit through communications dated 8th July 2011 and 12th September 2011. Despite these efforts, the rectification was not granted, and the respondent no.1 did not respond to the rectification application adequately. The court noted that the respondent no.2 admitted the processing of the return but failed to furnish necessary details, leading to the non-adjustment of TDS. 3. Jurisdictional Authority and Inter-Departmental Coordination: The respondent no.2 argued that he could not act without the transfer of details from CPC Bangalore. The court criticized the lack of coordination between the departments, which resulted in the non-grant of the refund. The court emphasized that the system should be more responsive and taxpayer-friendly, especially in the era of computerization. 4. Compliance with Section 143(1) of the Income Tax Act: The court examined Section 143(1) of the Act, which mandates the processing of returns and adjustment of TDS. The court found that the respondent failed to comply with these provisions by not accounting for the TDS amount in the final computation. The court noted that the details of TDS were available online and should have been considered in the final computation. 5. Computerization and Efficiency of the Income Tax Department: The court highlighted the extensive computerization in the Income Tax Department, aimed at improving efficiency and making the system more taxpayer-friendly. The court criticized the department's failure to rectify the mistake and provide the refund despite the available online details. The court emphasized the need for a more responsive and coordinated approach to avoid such issues in the future. Judgment: The court directed the respondents to consider the total TDS amount reflected in Form 26AS and issue the refund of Rs. 2,11,415 to the petitioner within four weeks. The court allowed the petitioner to make an additional claim for the remaining TDS amount of Rs. 4,00,064.36 if entitled. The court did not impose costs as the petitioner's advocate did not insist on it. Rule made absolute accordingly.
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