2015 (4) TMI 875 - HC - Income Tax

Return of Income not being accepted by system in view of non deposit of tax deducted at source by Respondent No.5. - Held that - Today, Mr. Pinto, learned Counsel appearing for respondent on instructions states that the Respondent No.5 viz. M/s Vardhaman Developers Ltd. have already paid the tax deducted at source into the Government Treasury together with interest and the petitioners would now be able to upload their returns of income for the Assessment Year 201415. Mr. Pinto on instructions further states that once return of income has been uploaded, the RespondentRevenue could be in a position to make a statement that no penal or financial consequence would be visited upon the petitioners on account of delay in uploading the return of income for the failure of Respondent No.5 to pay the tax deducted into the treasury. Respondent No.5 states that the amount of tax deducted at source alongwith interest has already been deposited in Government Treasury and no sooner they receive Form 16A which is generated online, the same would be handed over to the petitioners. Hearing of petition to enable the petitioners to uploaded its Return of Income and enable Mr. Pinto to take instructions that no penal and/or financial consequence would visit the petitioners only on account of delay in uploading their Returns of Income of Assessment Year 2014-15 for no fault of theirs.

Issues:
1. Amendment of petition to add party respondent and amend prayer clause.
2. Acceptance of petitioner's Return of Income for Assessment Year 2014-15.
3. Non-deposit of tax deducted at source by Respondent No.5.
4. Failure of RespondentRevenue to take action against non-deposit.
5. Prejudice caused to petitioners due to non-deposit.
6. Respondent No.5's payment of tax deducted at source and interest.
7. Handing over Form 16A to petitioners.
8. Adjournment of hearing to enable petitioners to upload Return of Income.

1. Amendment of Petition:
The petitioner sought to amend the petition to add the Commissioner of Income Tax-17 as a party respondent and modify the prayer clause. The revenue's counsel had no objection, leading to the grant of liberty to carry out the amendment by a specified date.

2. Acceptance of Return of Income:
The petition was filed to direct the respondent-assessee to accept the petitioner's Return of Income for the Assessment Year 2014-15, which was not being accepted due to non-deposit of tax deducted at source by Respondent No.5. The petitioners, Non-Resident Indians, sold property to Respondent No.5, who deducted a significant sum as TDS but failed to deposit it with the revenue, causing the petitioners' inability to upload their return of income.

3. Non-Deposit of TDS:
Despite deducting TDS and paying the balance consideration to the petitioners, M/s. Vardhaman Developers Ltd. did not deposit the TDS into the Government Treasury within the stipulated time frame. This non-deposit led to the petitioners' inability to file/upload their returns for the relevant assessment year.

4. Failure of RespondentRevenue:
The petitioners repeatedly requested action against M/s. Vardhaman Developers Ltd. for non-deposit of TDS, highlighting the prejudice caused by their inability to upload the return of income. However, the RespondentRevenue did not take any action, leading to the petitioners filing the present petition due to the indifferent attitude and apparent dishonesty of the respondents.

5. Prejudice to Petitioners:
The Court expressed shock at the RespondentRevenue's attitude and the conduct of Respondent No.5, leading to unnecessary harassment of the petitioners. Eventually, Respondent No.5 paid the TDS with interest, enabling the petitioners to upload their returns without facing penal or financial consequences for the delay caused by Respondent No.5.

6. Payment of TDS by Respondent No.5:
Respondent No.5 confirmed the deposit of TDS along with interest in the Government Treasury and assured the petitioners of receiving Form 16A once generated online.

7. Handing over Form 16A:
The hearing was adjourned to allow the petitioners to upload their Return of Income, with instructions sought to ensure no penal or financial consequences for the delay in uploading the returns due to the fault of Respondent No.5.

In conclusion, the judgment addressed the issues of amendment of the petition, acceptance of the Return of Income, non-deposit of TDS, failure of the RespondentRevenue to act, prejudice to the petitioners, payment of TDS by Respondent No.5, and the subsequent handing over of Form 16A, ensuring a fair resolution for the petitioners.

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