2020 (7) TMI 223 - HC - Income Tax

Unable to claim refund of the unclaimed excess TDS amount as the online TRACES portal - seeking a direction to the respondents to remove technical glitches and enable the TRACES portal so that petitioner can file its refund application for the excess Tax Deduction at Source (TDS) deposited by it - HELD THAT - On the last date of hearing, learned counsel for respondents had stated that in cases like the present, scrutiny and verification of the TDS amount utilised has to be manually done according to the established procedure. Along with the status report, learned counsel for respondents has now placed on record the established procedure. Consequently, petitioner is directed to follow the aforesaid procedure forthwith. At this stage, learned counsel for the petitioner states that the petitioner would follow the aforesaid procedure within two days. In the event, the petitioner follows the aforesaid procedure within two days, the respondents are directed to decide the petitioner s request within four weeks thereafter. With the aforesaid directions and observations, present writ petition and application stand disposed of.

Issues:
1. Petitioner seeks direction to remove technical glitches on TRACES portal for TDS refund application.
2. Petitioner requests manual processing of refund application due to online portal limitations.
3. Non-refund of excess TDS amount allegedly violates Income Tax Act and CBDT Circular.

Analysis:
1. The petitioner filed a writ petition to direct the respondents to rectify technical issues on the TRACES portal hindering the filing of a refund application for excess TDS deposited. The petitioner highlighted that despite depositing a substantial amount towards TDS, the online portal showed 'Maximum Refund Allowed' as 'Nil,' leaving a significant unclaimed excess amount. The petitioner argued that this discrepancy was a barrier to claiming the refund.

2. The petitioner, unable to resolve the issue through the online portal, sought manual processing of the refund application as an alternative solution. The petitioner's counsel emphasized that the excess TDS amount remained unclaimed, contrary to the provisions of Section 200A of the Income Tax Act, 1961, Rule 31A(3A) of the Income Tax Rules, and CBDT Circular No. 2/2011 dated 27th April, 2011. The petitioner's contention was that the non-refund of the excess TDS amount was in violation of the relevant legal provisions.

3. In response, the respondents presented an established procedure for cases requiring manual scrutiny and verification of TDS amounts utilized. The procedure outlined steps for deductors to address grievances with the jurisdictional TDS Assessing Officer, who would then forward the grievance to CPC-TDS for resolution. The procedure detailed a temporary arrangement for deductors to place refund requests with zero amounts to avoid system rejection, emphasizing the need for supporting documents and approval from competent authorities.

4. The Court directed the petitioner to adhere to the established procedure provided by the respondents for resolving the issue promptly. The petitioner agreed to follow the procedure within two days, upon which the respondents were instructed to decide on the refund request within four weeks. The Court disposed of the writ petition and application with these directions, emphasizing the importance of compliance with the outlined procedure for efficient resolution of the refund claim.

5. The Court ordered the immediate uploading of the order on the website and the forwarding of a copy to the petitioner's counsel via email for their records and compliance. The judgment highlighted the need for timely adherence to the prescribed procedure to facilitate the processing of the petitioner's refund request effectively and in accordance with the legal framework governing TDS refunds.

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