Since you edited your question, I shall edit my answer to suit.
Instead of using $t$ and $t'$ I'll use $t_A$ and $t_B$ for clarity.
So in some birds eye frame of reference, you have $A$ who is stationary, and $B$ who is moving with velocity $v$ away from $A$.
Lets say they agree to measure the time difference after $\tau$ seconds has elapsed on their individual clocks.
In their individual reference frames:
$A$:
A sees B moving with velocity $v$, away from B and $A$ measures the time between $t_1$ and $t_2$ as $\Delta t_A$.
$B$:
$B$ in their reference frame sees $A$ moving away at velocity $-v$ and like $A$, measures the time after $t$ second has elapsed on his clock $\Delta t_B$
You'll notice that each observer measures the same time elapsed between $t_1$ and $t_2$, in their own frame of reference which is $\tau$.
The amount of time that has elapsed on $A$'s clock in comparison to $B$'s clock, according to $B$, is
$$
\Delta t_A = \frac{1}{\sqrt{1-\frac{v^2}{c^2}}}\Delta t_B \tag{1}
$$
Because $B$ was moving faster, $A$'s clock sped up according to $B$.
The amount of time elapsed for $B$'s clock, according to $A$ is
$$
\Delta t_B = {\sqrt{1-\frac{v^2}{c^2}}} \Delta t_A \tag{2}
$$
The dilation formula just compares the two according to the other in a specific reference frame. You cannot switch them around like that as you've done in your contradiction as they're unique to the reference frame.
So basically, $A$ being stationary, $A$'s clock runs faster than $B$ according to $B$ and $B$'s clock moving, runs slower according to $A$.