2021 (8) TMI 1239 - HC - Income Tax

Glitches and shortcomings in the computer programme and software - petitioner challenging the subsequent Form-3 issued by the respondent/revenue after a full and final settlement of disputed taxes in Form-5 - modification of the software the DGIT (Systems) is directed to join the proceedings - Petitioner contending that the designated authority was rendered functus officio after initial Form-5 had been issued on 28 th December 2020 - HELD THAT - During the hearing learned counsel for the respondent/revenue admits that the new Form-5 to be issued to the petitioner would be a photocopy of the Form-5 which had been issued to the petitioner on 28th December 2020. Consequently this Court is of the view that the petitioner should not be asked to furnish Form-4 and the original Form-5 dated 28th December 2020 should be restored without any further ado But learned counsel for the respondent/revenue states that it is imperative that the petitioner should once again complete the process by filing Form-4 as the portal does not permit restoration of the previous Form-5 dated 28 th December 2020. This Court is of the opinion that technology is intended to ease and facilitate transactions and cannot be used as a basis for harassing an assessee by asking him to repeatedly file unnecessary and irrelevant forms. This Court is also of the view that the software and the computerised systems should abide by lawful directions and it cannot be that the computer lays down an agenda contrary to law according to which the Court and assessees have to function. If the only impediment in the way of granting the relief sought by the petitioners is the software then the same should be suitably modified. To consider modification of the software the DGIT (Systems) is directed to join the proceedings by way of online audio-video link on the next date of hearing.

Summary

Issues:
Challenge to subsequent Form-3 issued by revenue after full settlement in Form-5
Validity of subsequent Form-3 treating case as a search case
Petitioner's challenge to subsequent Form-3 treating case as a non-search case
Requirement of filing Form-4 for restoration of original Form-5
Technology hindering restoration of original Form-5

Analysis:
The petitioner filed a writ petition challenging a subsequent Form-3 issued by the revenue after a full settlement in Form-5. The subsequent Form-3 dated 21st January, 2021 was issued on the basis that the petitioner's case was a search case. The Court had earlier stayed this subsequent Form-3. Subsequently, the revenue issued a new Form-3 treating the case once again as a search case, followed by a re-revised Form-3 treating it as a non-search case. The petitioner filed a second writ petition challenging these subsequent Form-3s, arguing that the authority was functus officio after the initial Form-5 had been issued on 28th December, 2020. The re-revised Form-3 dated 12th April, 2021 was found to be identical to the initial Form-3 dated 23rd December, 2020, putting the petitioner in the same position as in December 2020.

During the hearing, the counsel for the revenue insisted that the petitioner should file Form-4 again for the issuance of a fresh certificate in Form-5. However, it was acknowledged that the new Form-5 would be a photocopy of the original Form-5 issued in December 2020. The Court opined that the petitioner should not be asked to furnish Form-4 again and that the original Form-5 should be restored without delay. The revenue's counsel argued that the portal did not allow the restoration of the previous Form-5 without filing Form-4 again.

The Court expressed that technology should not be a tool for harassing assesses with unnecessary filings. It emphasized that software and computerized systems should comply with lawful directions and not create additional burdens for taxpayers. The Court directed the DGIT (Systems) to participate in the proceedings through online audio-video link to discuss modifying the software for resolving the issue. The next hearing was scheduled for 27th August, 2021, with instructions to upload the order on the website and forward copies to the counsel via email.