Supreme Court Rejects PIL To Abolish TDS System, Suggests High Court Approach

The Supreme Court has rejected a Public Interest Litigation (PIL) seeking the abolition of the Tax Deducted at Source (TDS) system, allowing the petitioner to pursue the matter in the Delhi High Court.

The bench, led by Chief Justice of India (CJI) Sanjeev Khanna, expressed dissatisfaction with the quality of the petition.

During the hearing, CJI Khanna remarked that the petition had been “prepared very poorly”. He also highlighted that several High Court decisions have already upheld the provisions of the TDS system.

Details Of Petition

The PIL, filed by advocate Ashwini Kumar Upadhyay through lawyer Ashwini Dubey, challenged the TDS system on the grounds of being “arbitrary, irrational, and against constitutional provisions.” The petition named the Central Government, Ministry of Law and Justice, Law Commission, and NITI Aayog as respondents.

The petitioner argued that the TDS system violated Article 14 (right to equality), Article 19 (right to profession), and Article 21 (right to life and personal liberty) of the Constitution. According to Upadhyay, the TDS framework burdens taxpayers with significant administrative costs.

Supreme Court Petitioner’s Demands

The petition sought directions to NITI Aayog to review the concerns raised and suggest necessary changes to the TDS system. It also urged the Law Commission to examine the legality of the TDS provisions and prepare a report within three months.

Under the Income Tax Act, the TDS system mandates that the payer deduct tax at the time of making payments. The deducted tax is then deposited with the Income Tax Department and adjusted against the payer’s liability.

The Supreme Court rejected the PIL and advised the petitioner to approach the Delhi High Court. The ongoing legal discussions may pave the way for further scrutiny of the provisions in the future.

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