2022 (7) TMI 1267 - HC - Income Tax

Credit of taxes deposited under the DTVSV Act - the petitioners deposited the taxes, however, the mistake which the petitioners have committed is that they had deposited the taxes under the minor head 200 instead of 400 - HELD THAT - As the petitioners have paid the taxes, they should be given the credit for the challans paid in Form 3 under the said Act. The order/communication dated 7th April, 2022 rejecting credit of taxes deposited under the DTVSV Act on the hyper-technical ground that challans have been deposited under the minor head 200 instead of 400 is unfair, illegal and contrary to the objective of enacting the DTVSV Act, 2020. If the only impediment in the way of granting relief sought by the petitioner is the software, the same ought to be suitably modified to accept the applications of the petitioners. One of us, (Manmohan, J) in Shalu Nigam Anr. Vs. The Regional Passport Officer Anr. 2016 (5) TMI 1587 - DELHIHIGH COURT has held, In any case, technology is intended to ease and facilitate transactions and cannot be the basis for creating and defeating anybody s legal rights . After all, the software has to be tailor-made according to the needs, aspirations and legal rights of the tax payers and not that the tax payers legal rights have to be tailor-made in accordance with the software being used by the Tax Department. This Court directs the respondents to correct the payment heads, record the credit of taxes deposited and to issue revised Forms 3 within four weeks. Thereafter, the petitioner shall file Forms 4 within two weeks.

Summary

Issues:
Rectification of Forms 3 and issuance of Forms 5 under Direct Tax Vivad se Vishwas Act.

Analysis:
The petitioners filed writ petitions seeking directions to rectify Forms 3 issued on 22nd April, 2021, and to issue Forms 5 post filing of Forms 4 under the Direct Tax Vivad se Vishwas Act. They had filed declarations in Forms 1 and 2 electronically, but inadvertently excluded the interest component in the amounts paid by various challans. The Respondent issued Forms 3 on 22nd April, 2021, where credit for taxes deposited was not allowed due to a "mismatched" reason. The petitioners filed representations to rectify Forms 3 by allowing credit for taxes already deposited. However, when attempting to file Forms 4, an error message was displayed, preventing the filing due to the "date of deposit cannot be before the filing date of Forms 1 and 2" issue.

The petitioners had deposited the taxes under the minor head "200" instead of "400." The Court acknowledged that the taxes were paid and opined that the petitioners should be given credit for the challans paid under the Act. The rejection of credit for taxes deposited on the ground of challans being under the minor head "200" instead of "400" was deemed unfair, illegal, and contrary to the Act's objective. The Court emphasized that technology should facilitate transactions and not impede legal rights, citing a previous judgment.

The Court directed the respondents to correct the payment heads, record the credit of taxes deposited, and issue revised Forms 3 within four weeks. Subsequently, the petitioners were instructed to file Forms 4 within two weeks. With these directions, the writ petitions and applications were disposed of.