The Assessing Officer must verify and rectify TDS credit discrepancies proactively to ensure taxpayers receive appropriate credits, as errors caused by deductors should not burden the taxpayer.

JUDGMENT

Manmohan, J. (Oral)

1. The petitions have been heard by way of video conferencing.

2. Present writ petitions have been filed seeking direction to the respondents to allow the TDS credit on the basis of the TDS certificates issued by the tenants in the name of the Petitioners for the Assessment Year 2009-10. Petitioners also seek cancellation of demand arising from order u/s 143(1)(a) and penalty notice u/s 221 of the Income Tax Act, 1961 [the Act] and a refund of Rs.2,50,000/- each along with interest.

3. Learned counsel for the petitioners state that the petitioners are cousin brothers as well as Non-Resident Indians and are deriving income from house property and bank interest. They state that the petitioners filed their returns of income tax claiming refund of Rs.2,50,000/- each that became due as the petitioners paid the full tax without considering the advance tax payment of the same amount.

4. They further state that the refund was not granted to the petitioners under the assessment orders dated 18th November, 2011 issued by the Assessing Officer [for short `AO'] under Section 143(3) of the Act.

5. Learned counsel for the petitioners state that the petitioners moved rectification applications dated 22nd April, 2013 under Section 154 of the Act giving details of the TDS amounts that had also not been considered as prepaid taxes. They state that no order under Section 154 of the Act has been passed by the AO and a demand was raised upon the petitioner in W.P.(C) 7971/2021 and the petitioner in W.P.(C) 7972/2021 vide notices dated 7th August, 2018 and 14th August, 2018 respectively under Section 221(1) of the Act. They state that the petitioners sent letters dated 17th August, 2018 to the AO however no action was taken on the same and notices dated 18th February, 2019 under Section 221(1) of the Act were sent to the petitioners.

6. Learned counsel for the petitioners state that no steps have been taken by the respondents to rectify the assessment orders despite many letters and requests of the petitioners.

7. Issue notice. Mr.Sunil Agarwal, learned senior standing counsel accepts notice on behalf of respondents. He states that he has no objection if the present Writ Petitions are disposed of with a direction to the AO to decide the rectification applications filed by the petitioners within a strict time frame. Mr. Agarwal fairly brings to the notice of this Court the direction given by learned predecessor Division Bench in similar circumstances in Court On its Own Motion vs. Commissioner of Income Tax, 2013 SCC OnLine Del 1060: [2013] 352 ITR 273 (Del) wherein it is held as under:

"48. The Finance Minister in his recent speech while inaugurating the new Central Processing Cell for Tax Deducted at Source at Aayakar Bhawan in Ghaziabad, U.P. had emphasised the need for `technology driven tax administration' and had stated as under:

"This system will serve two people. As a deductee, I know how much the taxpayer suffers if the TDS is not credited to his or her account."

49. The statement reflects the true and correct position of a pique assessee as a deductee, who has suffered tax deduction at source, but is not given due credit in spite of the fact that the deductor has paid the said tax. The respondents have received their due or money but credit is not given to the person from whose income tax has been deducted. Denying benefit of TDS to a taxpayer because of the fault of the deductor, which is not attributable to the deductee, causes unwarranted harassment and inconvenience. The deductee feels cheated. The Revenue cannot be a silence spectator, wash their hands and pretend helplessness. The problems highlighted here are normally faced by small or middle class taxpayers, includin