The Tax Publishers2020 TaxPub(DT) 0352 (Del-HC)

INCOME TAX ACT, 1961

Section 197

Where assessee placed on record the lower withholding tax certificate issued in respect of the financial year 2018-19 and since assessee was being subjected to higher deduction of tax at source by parties which are transacting in business, while its claim is for lower withholding tax, therefore, Revenue was directed that the said certificates issued to assessee would be effective for the entire financial year of 2019-20.

Tax deduction at source - Discretionary power under section 197 - Certificate for deduction at lower rate -

On the last date, Revenue had sought time to take instructions on the limited grievance raised by assessee that withholding tax certificate issued to assessee was made effective from the date of issue, and not from the beginning of the financial year, i.e., 1-4-2019. The case of assessee was that on and from 1-4-2019, Revenue introduced the system of making the application for reduced withholding tax under section 197 electronically. However, initially the system of revenue did not permit applicant to include the particulars of more than three parties. Held: Assessee placed on record the lower withholding tax certificate issued in respect of the financial year 2018-19. In present case, time is of essence since assessee was being subjected to higher deduction of tax at source by parties which are transacting in business, while its claim is for lower withholding tax. Though, lower withholding tax certificates have been issued in respect of all the parties, dispute remained with regard to the date from which certificates should take effect since assessee claimed that it had made the application on 18-3-2019 for the financial year 2019-20. In respect of all parties, Revenue was directed that the said certificates issued to assessee would be effective for the entire financial year of 2019-20.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :



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