Case Law Details
In our view, once the department recognises the possibility of errors and also makes provisions for making corrections, it would be wholly illogical to limit such corrections on arithmatical working out of only two alphabets or two numerics being found incorrect requiring change. Error in feeding an entry or a number may have multiple origins from typographical error of Data Entry Operation to mechanical failures or through pure oversight referring to one column of PAN instead of another while filling up and uploading the statement. It is not necessary nor possible for us to envisage different situations under which such errors could crop up and it need not necessarily be confined to limited figures on the letters of the PAN being incorrect.
We can well imagine the predicament of the department if individual cases were allowed to be brought before the authority requiring examination of genuineness of the errors and justification for allowing corrections. We are therefore, not suggesting that such cases may be dealt with individually on case to case basis. Nevertheless, we cannot uphold the stand of the department that PAN in- correction can be corrected as long as mismatch is upto two alphabets and two numeric characters. This distinction or drawing of a cutoff line cannot be supported by any logic. We do not even find any conscious decision placed before us which can be stated to be the basis of this policy. Affidavit in reply merely refers to the requirement of limiting the correction of such errors, according to which the online system has been programmed. Programming of the online system is merely a mechanical part of the decision. The decision to limit the correction to limited characters is a policy decision which should be based on logical parameters. Had the department in mind the possible interest claims of the deductors in case of delay in processing the refunds, provisions could easily have been made in law either through statute or through delegated legislation, imposing restriction on time upto which corrections can be made or even allowing conditional corrections. Nevertheless, putting the limitation of permitting corrections of only four characters has no rationale relation to the department’s anxiety of possible interest liability in case of the deductees.
In the result, we hold that the decision of department in not permitting the petitioner to correct PAN of the deductee in the statement of tax deducted at source was impermissible. In the present case, department shall verify the petitioner’s claim of actual deduction of tax at the prescribed rate in case of M/s. Star (India) Pvt. Ltd., verify that the PAN sought to be corrected by the petitioner belongs to the said agency and that the tax was actually deposited in case of such deductor. If these questions are answered in favour of the assessee, the department shall not insist on raising higher demand from the petitioner of failing to deduct tax at source in terms of subsection(1) of section 206AA of the Act.
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
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