PrCIT directed to resolve deposit of TDS into wrong TAN

PrCIT directed to resolve deposit of TDS into wrong TAN along with Principal Secretary. Income Tax Department directed to release the attached bank account

ABCAUS Case Law Citation:
ABCAUS 2268 (2018) (04) HC

A Government Department (The Petitioner) had filed the instant writ petition against the action of the Income Tax Department in attaching their bank account for non deposit of tax deducted at source.

Admittedly, the tax was deducted and deposited by the petitioner but in a wrong TAN number, as a result the computer system which handles the deposit did not reflect the deposit against the TAN of the petitioner.

The said mistake was pointed out by the petitioner to the Income Tax Department (ITD/Revenue) but according to the ITD, in view of the technical nature of working of the CPC System at Banglore, defects could not be cured and it was the petitioner who should take certain action in the matter.

The Hon’ble High Court opined that even if the petitioner did not take any action in the matter, the Income Tax Department should not have attached the bank account of the petitioner, instead should have taken up the issue before the higher authority of the Department and tried to find out ways to resolve the same, instead of taking the extreme coercive action of attaching the bank account of the Government Department.

The Hon’ble High Court expressed anguish over the manner in which both the Departments had functioned. The petitioner department instead of approaching High Court should have taken up the issue through their Departmental Head with the Income Tax Department and thereafter tried to resolve the issue. The Income Tax Department also, in case it found that the Rural Works Department, namely the petitioner, has not deposited the tax in the correct form, should have taken up the issue with the higher authorities of the Rural Works Department or the State Government and tried to resolve the issue. Instead of doing so, the Income Tax Department took the most extreme coercive steps.

The Hon’ble High Court opined that it was a case where the Principal Chief Commissioner of the Income Tax Department and the Principal Secretary of the Department should be directed to sit and resolve the issue in question and till then the bank account of the petitioner should be released.

Accordingly, the Income Tax Department was directed to release the bank account of the petitioner forthwith within a period of 24 hours. It was also directed that the Principal Chief Commissioner of the Income Tax Department and the Principal Secretary of the Govt. Department shall resolve the issue and submit a report to the Registrar General of the Court.