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2021 (10) TMI 974 - HC - Income TaxGlitches and shortcomings in the computer programme and software - Direct Tax Vivad se Vishwas Act, 2020 - petitioner challenging the subsequent Form-3 issued by the respondent/revenue after a full and final settlement of disputed taxes in Form-5 - modification of the software, the DGIT (Systems) is directed to join the proceedings - revenue issued a rerevised Form-3 treating the petitioner s case as a non-search case - Revenue insists that the petitioner should once again file Form-4 on the basis of which they would issue a fresh certificate in Form-5 - revenue states that it is imperative that the petitioner should once again complete the process by filing Form-4 as the portal does not permit restoration of the previous Form-5 - as per revenue system functionality, as of now, does not permit the Assessing Officer to access the TDS and prepaid taxes data for the assessment year 2016-17 - HELD THAT - Since digitisation is being implemented at a rapid pace in the arena of Direct Taxes and a policy decision has been taken to reduce human interface, this Court is of the view that public at large should be asked to use the new software and programme only after the said programme/software has been tested prior in time on a sufficiently large sample base of assesses. The computer programme/software should be flexible enough to incorporate the implementation of Court s orders. For this purpose, if any policy initiative is required, the DGIT (Systems) should take up the issue with CBDT.5. During the hearing, this Court also gave practical instances of glitches and shortcomings in the computer programme and software. DGIT (Systems) states that in the event any Assessing Officer has an issue with the operation of the computer programme or software, the said officer raises a ticket which is then resolved by the concerned vertical in her department, and in the event, the issue cannot be resolved by the concerned vertical, the officer can raise a ticket with another vertical. The Court has suggested to the DGIT (Systems) that in the event the ticket cannot be resolved by any of the verticals due to constraints/limitations in the system or software, then a mechanism should be put in place whereby the said issue can be flagged for a policy decision before her. Ms.Pragya, DGIT (Systems) assures this Court that her direct orate would take steps to improve on both the fronts, namely, co-ordination and feedback. She states that wherever necessary, improvements in the process shall be carried out. She also states that she is confident that their directorate will be able to resolve the glitches in the system and shall revert back with solutions, if possible, within a fortnight. Keeping in view the aforesaid, the personal appearance of DGIT (Systems) and her officers are dispensed with.
Issues:
1. Challenge to subsequent Form-3 issued by revenue after full and final settlement. 2. Petitioner's case treated as search case leading to multiple Form-3 issuances. 3. Dispute over restoration of original Form-5 without filing unnecessary Form-4. 4. System functionality issue hindering access to TDS and prepaid taxes data. 5. Refund set off against wrong tax payee due to technical flaw in ITBA portal. 6. Delay in refund payment for over 10 years. 7. Implementation of digitization in Direct Taxes and reduction of human interface. 8. Flexibility and testing of new software before public use. 9. Feedback mechanism for resolving issues in computer programs. 10. Assurance of improvements in coordination and resolution of system glitches. Analysis: 1. Challenge to subsequent Form-3: The petitioner challenged subsequent Form-3 issued by the revenue after a full and final settlement in a previous Form-5. The court noted the repeated issuances of Form-3 treating the case as a search case, leading to confusion. The petitioner sought restoration of the original Form-5 without filing an unnecessary Form-4, which the court agreed with, criticizing the system's requirement for redundant filings. 2. System functionality issue: In another case, the court addressed a system functionality issue hindering access to TDS and prepaid taxes data for a specific assessment year. The court directed the DGIT (Systems) to resolve the issue and granted more time for compliance, emphasizing the importance of system efficiency in tax assessments. 3. Refund set off and delay: A separate issue involved a refund set off against the wrong tax payee due to a technical flaw in the ITBA portal. The court acknowledged the delay in refund payment for over 10 years and directed the respondents to address the issue promptly, highlighting the importance of accurate processing and timely refunds. 4. Digitization and reduction of human interface: The court emphasized the ongoing digitization in Direct Taxes and the policy decision to reduce human interface. It stressed the need for thorough testing of new software before public use to ensure flexibility and compliance with court orders, urging the DGIT (Systems) to coordinate with CBDT for necessary policy initiatives. 5. Feedback mechanism and improvements: To address glitches in computer programs, the court proposed a feedback mechanism for resolving issues efficiently. The DGIT (Systems) assured the court of improvements in coordination, feedback, and system processes, committing to resolving system glitches and providing solutions within a specified timeframe. This detailed analysis covers the various issues addressed in the judgment, highlighting the court's concerns regarding system functionality, refund processing, digitization, and the need for improvements in coordination and software testing.
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