Equity in Taxation

The Delhi High Court’s ruling in Venkatachalam Thangavelu v. ITO, Ward 70(1), Delhi is a pointed reaffirmation that tax administration cannot sacrifice equity at the altar of procedural rigidity. Addressing the long-standing problem of denial of TDS credit due to a deductor’s default, the Court draws a clear constitutional boundary between modes of tax collection and substantive tax liability. The judgment recognises that an assessee, having suffered tax deduction, cannot be compelled to bear the consequences of failures entirely beyond his control. By invoking the doctrine of reading down, the Court harmonises the statutory scheme with Article 14, ensuring that efficiency in tax collection does not degenerate into arbitrariness or double taxation.