Case Law Details
Sunil Bakht Vs ADIT (Supreme Court of India)
In the case of Sunil Bakht vs ADIT (Supreme Court of India), the petitioner challenged the imposition of an excess surcharge on income tax for the assessment year 2022-2023. The Special Leave Petition (SLP) was filed after the High Court dismissed the petitioner’s writ on 28.02.2024, citing that an alternative remedy was available. Notably, a similar surcharge issue occurred in the assessment year 2021-2022, and the High Court had then ruled in favor of the petitioner, ordering a refund of Rs. 1.33 Crores. For the current case, the Revenue admitted that the excess surcharge was an error, and the amount had already been refunded to the petitioner on 06.06.2024.
However, during the proceedings, another demand notice was issued on 28.05.2024 for the assessment year 2023-2024, demanding an additional Rs. 62.85 lakh as surcharge. The Revenue’s counsel explained that the Central Processing Centre (CPC) had a recurring software issue, which incorrectly calculated and raised excessive demands. The Supreme Court criticized the Revenue and the Central Board of Direct Taxes (CBDT) for allowing such technical errors to continue and demanded immediate action. The Court emphasized that technological shortcomings should not cause harassment to taxpayers, urging the Revenue to upgrade their software to prevent future mistakes.
The Supreme Court disposed of the petition, instructing the Revenue to resolve the issue for the assessment year 2023-2024 within six weeks. Additionally, it ordered the CBDT to rectify the software issues to avoid similar errors in the future, stating that such problems should not be left to the discretion of the Assessing Officer.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1. The Special Leave Petition arises out of the order dated 28.02.2024, passed by the High Court dismissing the writ petition Rs. 1.57 Crores and demanding Rs. 2.01 Crores for the Assessment Year 2022-2023. The reason for the dismissal of the Writ Petition is that the petitioner can avail an alternative remedy.
2. It is important to note that, for the previous Assessment Year 2021-2022, a similar imposition of surcharge was carried in judicial review and the High Court by its order dated 21.03.2023 allowed the Writ Petition in view of the submission of the Revenue agreeing to remit the amount of Rs. 1.33 Crores.
3. The learned counsel appearing for the Revenue submits that even in the present proceedings (Assessment Year 2022-2023), there is rectification of the excess surcharge and the amount was remitted to the petitioner on 06.06.2024 . This statement concludes the lis in the present proceedings.
4. However, the story does not end here.
5. During the pendency of the present proceedings, there is yet another demand notice dated 28.05.2024 raised for the Assessment Year 2023-2024, as per which surcharge computed at 37% and a demand of Rs. 62,85,070/- has been raised. Learned counsel for the Revenue submits that this error is occurring as the Central Processing Centre (CPC) has not adopted the mechanism of deleting excess calculation as it is programmed to so calculate and raise a demand.
6. The technological impediment cannot be a reason for harassing an assessee year after year. Immediate steps must be taken by the Revenue to upgrade the software or take such other steps as may be necessary to ensure that such mistake does not occur in future.
7. Insofar as the order impugned is concerned, the dispute has already been resolved and the amount is said to have been remitted on 06.06.2024. However, for the Assessment Year 2023-2024, the Revenue shall take immediate steps and communicate the order of withdrawal of the excess surcharge amount within six weeks from the date of the receipt of the order. The Central Board for Direct Taxes shall also take necessary steps for rectifying the software as the issue may not be resolved by the Jurisdictional Assessing Officer.
8. With these observations, the Special Leave Petition is disposed of.
9. Pending application(s), if any, shall stand disposed of.
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