Delhi HC: IT Software should have been tested prior in time on a sufficiently large sample base of assessees before it is launched for public at large

Last updated: 02 September 2021

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Quick Summary

The Delhi High Court has ruled that IT software used for tax filings must be thoroughly tested on a substantial number of users before being launched to the public. This is to ensure the technology facilitates, rather than complicates, transactions and avoids harassing taxpayers with unnecessary forms or technical issues. The court directed the Directorate of Income Tax (Systems) to modify the software and ensure it is flexible enough to implement court orders.

Court :
Delhi High Court

Brief :
In Krishan Agarwal Vs. PCIT [W.P.(C) 3459/2021 & C.M.No.10489/2021, W.P.(C) 8371/2021& C.M.No.25917/2021, W.P.(C) 5513/2021, W.P.(C) 5583/2021 & CM APPL. 17357/2021 dated August 27, 2021], the Hon'ble Delhi High Court vide Order 3459/ 2021 and 8371/2021 had observed that technology should be used to ease and facilitate transactions and not become a basis for harassing an assessee by asking him to repeatedly file unnecessary and irrelevant forms. It directed the Directorate of Income Tax (Systems) ('DGIT (Systems)') to modify the software of filing returns accordingly.

Citation :
W.P.(C) 3459/2021 & C.M.No.10489/2021, W.P.(C) 8371/2021& C.M.No.25917/2021, W.P.(C) 5513/2021, W.P.(C) 5583/2021 & CM APPL. 17357/2021 dated August 27, 2021

In Krishan Agarwal Vs. PCIT [W.P.(C) 3459/2021 & C.M.No.10489/2021, W.P.(C) 8371/2021& C.M.No.25917/2021, W.P.(C) 5513/2021, W.P.(C) 5583/2021 & CM APPL. 17357/2021 dated August 27, 2021], the Hon'ble Delhi High Court vide Order 3459/ 2021 and 8371/2021 had observed that technology should be used to ease and facilitate transactions and not become a basis for harassing an assessee by asking him to repeatedly file unnecessary and irrelevant forms. It directed the Directorate of Income Tax (Systems) ('DGIT (Systems)') to modify the software of filing returns accordingly.

In pursuance of the above-mentioned orders, DGIT(Systems) joined the proceedings in the current listed order wherein the Hon'ble Delhi High Court heard petitions while taking into account the contention put forth by DGIT (Systems) which pleaded that it is making the best effort to resolve the software issues flagged in the impugned orders. Added that the Assessing Officer ('the AO') books a ticket in the occurrence of issues raised in the computer programme or software which is then either resolved or sent to another vertical.

The Hon'ble Delhi High Court thereby observed that the public at large should only be asked to use the software after it has been 'tested prior in time on a sufficiently large sample base of assessees'. Programme should be made flexible enough to incorporate the implementation of the Court's orders.

FAQ :

The Delhi High Court ruled that IT software, particularly for tax purposes, should be tested on a sufficiently large sample base of assessees before being launched for public use.

The purpose is to ensure the technology eases and facilitates transactions, rather than becoming a basis for harassing assessees by requiring them to file unnecessary or irrelevant forms.

The Directorate of Income Tax (Systems) (DGIT Systems) was directed to modify the software for filing returns.

When issues are raised, the Assessing Officer books a ticket, which is then either resolved or sent to another vertical for resolution.

The software should be flexible enough to incorporate the implementation of the Court's orders.