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The Supreme Court on Friday refused to entertain a PIL demanding scrapping of the TDS system of income tax collection under the Income Tax Act, saying it was “very badly drafted”.
A Bench led by Chief Justice of India Sanjiv Khanna said TDS was levied “everywhere”.
The Bench—which also included Justice Sanjay Kumar—however, allowed petitioner Ashwini Kumar Upadhyay, an advocate, to approach the Delhi High Court. Upadhyaya—who had challenged the TDS system of income tax collection on the grounds that it’s "arbitrary and irrational" and violated various fundamental rights—said he would move the Delhi High Court.
Upadhyay contended that the TDS (Tax Deducted at Source) system under the Income Tax Act—which mandated deduction of tax at the time of payment by the payer and its deposit with the IT Department and the deducted amount was adjusted against the payee's tax liability—violated various fundamental rights.
He urged the top court to direct the Centre to "declare the TDS system manifestly arbitrary, irrational and against Articles 14 (right to equality), 19 (right to practise profession) and 21 (right to life and personal liberty) of the Constitution, hence void and inoperative".
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