More Stories

Informist, Friday, Jan. 24, 2025

 

--SC dismisses plea seeking abolition of TDS, asks petitioner to move HC

 

NEW DELHI – The Supreme Court on Friday dismissed a public interest litigation seeking abolition of the tax deducted at source system and asked the petitioner, lawyer Ashwini Kumar Upadhyay, to move a high court. The bench, led by Chief Justice of India Sanjiv Khanna, said that it was a badly drafted petition. 

 

"Go to the high court, it is not a properly drafted petition. You may have a point, but this is not the way to draft the petition," said Chief Justice Khanna. The top court said that it would not entertain the petition, adding that it would neither comment nor give an opinion on the merits of the plea.

 

Upadhyay had sought abolition of the tax deducted at source system for being "arbitrary, irrational, and against Article 14, 19 and 21 of the Indian Constitution". Upadhyay also sought a direction to the National Institute for Transforming India to consider the grounds raised in the petition and suggest necessary changes in the tax deducted at source system. Articles 14, 19, and 21 are fundamental rights in the Indian Constitution. Article 14 pertains to 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 asked the Law Commission of India to examine the legality of the tax deducted at source system and prepare a report within three months. Upadhyay 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, the petitioner said. The result is an unjust shifting of sovereign responsibilities from the government to private citizens without adequate compensation, resources or legal safeguards, the petitioner added.

 

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

 

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, the petitioner said. 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 Namrata Rao

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.