Income Tax Dept Mandated to Issue Form 5 Under Vivad Se Vishwas Scheme Upon Rectification of Portal Error in Clubbing Payments Across Assessment Years: Calcutta HC [Read Order]
The Court held that the department cannot take advantage of its own technical error to deny the benefit of the scheme to an eligible declarant, directing the immediate rectification of the portal error and issuance of the completion certificate
The Calcutta High Court ordered the Income Tax Department to issue Form 5 under the Direct Tax Vivad Se Vishwas Scheme, 2020, stating that revenue authorities cannot deny the benefits of the scheme to an assessee due to a technical glitch on the official portal which caused erroneous clubbing of payments across different assessment years. The Court held that Form 5 is a legislative requirement, not a discretionary function, when the conditions of the plan are fulfilled.
The petitioner-assessee, Sonu Marketing Private Limited, filed the present writ suit before the High Court against the alleged inaction of the designated body in releasing Form 5 for the Assessment Year 2015-16. The petitioner had selected for Vivad Se Vishwas Scheme for two evaluation years 2014-15 and 2015-16. The declarations state that the authorised authority provided Form 3 indicating the amount payable for each year individually. The petitioner did so by making the full payment for both assessment years within the prescribed period.
But, even after the payments, Form 5, the direction to the declarant to pay the disagreement, was issued solely for the Assessment Year 2014-15. The petitioner submitted that the payment made particularly for Assessment Year 2015-16 had been wrongly reported against Assessment Year 2014-15 due to technical fault on Income Tax Business Application Portal. This wrongful clubbing essentially caused a halt in the granting of completion certificate for the ensuing year and so resulted in severe prejudice to the petitioner.
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It was submitted by the petitioner that the non-issuance of Form 5 was arbitrary and contrary to the statutory system in view of the discharge of financial obligation.
The Standing Counsel appearing for the respondents said that the mismatch was a technological fault on the portal. The petitioner had admittedly made the appropriate contributions as indicated in Form 3 for both the years and was otherwise entitled to the issue of Form 5. The Department had no objection in correcting the mistake and issuing the required form after verification of the payment challans.
Justice Smita Das De observed that there was no controversy with respect to filing of declarations and payments made as per Form-3. The only drawback was the technological misuse of the funds of the portal. The Court also strongly observed that the department cannot take advantage of its own technical shortcomings to deny the benefit of the plan to a compliant declarant.
The High Court urged the respondents to correct the error and delink the payment of Assessment Year 2015-16 from 2014-15 within a fortnight. Also, the designated body was directed to issue Form 5 to the petitioner for Assessment Year 2015-16 within four weeks of the judgement.
The Court clarified that on issuing of Form 5, all procedures for the relevant assessment year shall stand ended under Section 5(3) of the Scheme, save and except any future recovery proceedings for tax, interest or penalty.
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