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Informist, Thursday, Dec. 26, 2024

 

NEW DELHI – A public interest litigation filed in the Supreme Court on Thursday sought abolition of tax deducted at source system, for being "arbitrary, irrational, and against Article 14, 19 and 21 of the Indian Constitution". The petitioner, Ashwini Kumar Upadhyay, also sought a direction to National Institute for Transforming India to consider the grounds raised in the petition and suggest necessary changes in the tax deducted at source system.

 

Article 14, 19, and 21 are the fundamental rights given in the Indian Constitution. Article 14 talks about equality before the law and equal protection of the laws. Article 19 guarantees citizens the right to freedom of speech and expression. While Article 21 guarantees the right to life and personal liberty.

 

The petitioner also sought the Law Commission of India to examine the legality of the tax deducted at source system and prepare a report within three months. Upadhyay, a lawyer, said that while tax deducted at source ensures steady revenue inflow for the government, it imposes substantial administrative and financial obligations on the tax assessees.

 

The regulatory and procedural framework surrounding tax deducted at source is excessively technical, often requiring specialised legal and financial expertise, which most tax assessees lack, said the petitioner. The result is an unjust shifting of sovereign responsibilities from the government to private citizens without adequate compensation, resources or legal safeguards, said the petitioner.

 

The tax deducted at source system disproportionally burdens the assessees with significant administrative expense, said the petitioner. Additionally, non-compliance, even if unintentional, invites heavy penalties, interest and prosecution under the Income Tax Act, 1961.

 

Illiterate or economically weaker assessees, who lack the capacity to navigate the technical framework, suffer undue hardship and harassment, undermining the constitutional guarantee of equality before the law, said the petitioner. The imposition of tax collection duties on tax deducted at source assessees constitutes forced labour under the Indian Constitution, he added.

 

Upadhyay said that the government can achieve efficient tax collection without imposing undue hardship on citizens. Shifting to a monthly advance tax system, instead of the quarterly schedule, would ensure regular revenue flow while reducing the compliance burden on tax deducted at source assessees, said the petitioner. Enhancing automated systems and direct tax recovery mechanisms, leveraging technology and data analytics can improve compliance with regulations, he added.  End

 

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury

 

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