Tax payment Software Has To Be Tailor-Made According To The Legal Rights Of The Taxpayers: Delhi High Court



The Delhi High Court has held that the tax payment software has to be tailor-made according to the needs, aspirations, and legal rights of the taxpayers and not that the taxpayers’ legal rights have to be tailor-made in accordance with the software being used by the Tax Department.

The division bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora has held that as the petitioners have paid the taxes, they should be given credit for the challans paid on Form 3 under the Direct Tax Vivad se Vishwas Act (DTVSV Act). The order/communication rejecting credit of taxes deposited under the DTVSV 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.

The petitioners/assessee have sought directions to the respondent to rectify Forms 3 and 4 issued on April 22, 2021, and to issue Forms 5 post the filing of Forms 4 under the DTVSV Act.

The petitioner stated that on March 26, 2021, the petitioners filed declarations on Forms 1 and 2 electronically but inadvertently declared the amounts paid by various challans, excluding the interest component.

The petitioners submitted that the respondent, after accepting Forms 1 and 2 in all the cases, issued Forms 3 in which credit for the taxes deposited was not allowed for the reason “mismatched” and no reasons were assigned for not allowing credit for the taxes paid. The petitioners filed representations to rectify Forms 3 by allowing credit for taxes already deposited and subsequently attempted to file Forms 4. However, it was not accepted, showing an error message that “the date of deposit cannot be before the filing date of Forms 1 and 2”.

The petitioner contended that the petitioners again filed representations before the respondent, which were declined. The respondent declined credit of challans paid on the ground that taxes had been deposited under the minor head “200 instead of 400”.

The court noted that, in any case, technology is intended to ease and facilitate transactions and cannot be the basis for creating and defeating anybody’s legal rights.

The court directed the respondents to correct the payment heads, record the credit of taxes deposited, and issue revised Forms 3 within four weeks. The petitioner shall file Form 4 within two weeks.

Case Title: Celerity Infrastructure Pvt. Ltd. Versus Dy Commissioner Of Income Tax Circle 73-1

Citation: 2022 LiveLaw (Del) 706

Case No: W.P.(C) 8590/2022

Dated: 19.07.2022

Counsel For Petitioner: Advocate Yogesh Jagia,

Counsel For Respondent: Sr.Standing Counsel Puneet Rai

Click Here To Read/Download Judgment