2016 (10) TMI 591 - HC - Income Tax

TDS on rent - remittance of TDS amount to the government - Held that - The counter affidavits have been sworn to by the first respondent, without even noticing the mistake in his submissions i.e., the word petitioners should be read as second respondent and the remittance of TDS is said to have been made on 28.09.2012. Conveniently, the date on which the tax was deducted and the date within which it has to be remitted to the Government s Account have not been disclosed. Ultimately, a vague submission has been made in paragraph No.10. Therefore, the counter affidavits filed by the first respondent stand rejected. In the light of the above fact, thorough enquiry into the matter is required to be done and the manner in which the Assistant Commissioner has proceeded with the matter, that too, after the Writ Petitions were filed, notices were ordered and the cases were adjourned from time to time, do not inspire confidence in the mind of the Court, that proper procedure has been followed. For the foregoing reasons, there will be a direction to the first respondent to issue notice to the petitioners and to the respondents 2 to 4 to produce all the records, make a thorough verification and pass appropriate orders strictly in accordance with law, as per the provisions of the Income Tax Act, 1961. The above direction shall be complied with by the first respondent, within a period of three weeks from the date of receipt of a copy of this order, making it clear that the petitioners and the respondents 2 & 3 shall extend their full co-operation in the enquiry to be conducted.

Summary

Issues involved:
Seeking direction to reflect deducted rent amount, treating the second respondent as a defaulter, recovery of dues under Income Tax Act, 1961.

Analysis:
The petitioners in the Writ Petitions requested a direction for the first respondent to reflect the deducted rent amount by the second respondent and treat them as a defaulter for non-remittance of tax to the Government's Account under the Income Tax Act, 1961. The petitioners alleged that the tax deducted by the second respondent was not remitted to the Government's Account as it did not reflect in the official website related to the petitioners' assessments.

The Court noted that the matter had been adjourned multiple times for the first respondent to file counter affidavits. Finally, counter affidavits were filed by the first respondent, but the Court found them to be vague and lacking crucial details. The Court highlighted that the counter affidavits did not specify important information such as the date of deduction, remittance to the Government's Account, and the inspection details conducted by the Assistant Commissioner of Income Tax.

Due to the deficiencies in the counter affidavits and the lack of clarity in the Assistant Commissioner's actions, the Court ordered a thorough inquiry into the matter. The Court expressed dissatisfaction with the handling of the case and emphasized the need for proper procedure to be followed. As a result, the Court directed the first respondent to issue notices to all parties involved, conduct a comprehensive verification, and make decisions in accordance with the law under the Income Tax Act, 1961. The first respondent was given a deadline of three weeks to comply with the Court's directive, with a requirement for full cooperation from all parties during the investigation.

In conclusion, the Writ Petitions were disposed of with no costs imposed, and connected Miscellaneous Petitions were closed. The judgment emphasized the importance of conducting a thorough inquiry, following proper procedures, and ensuring compliance with the provisions of the Income Tax Act, 1961 in such matters.