| The Tax Publishers2020 TaxPub(DT) 5426 (Del-HC) INCOME TAX ACT, 1961
Section 197
Where assessee, engaged in the business of operating aircraft in international traffic and its revenue/income in relation to its international air traffic to and from India, derived from ticket sales and cargo traffic, etc., it filed writ petition seeking direction for issuance of a lower withholding certificate under section 197(1), considering that assessee was incapacitated from making applications as per the online format for all the parties for whom it wanted to have the withholding tax certificates issued, as there was technical inadequacy of the system, it was declared that the withholding tax certificates issued by Revenue shall be effective from 1-4-2019 for financial year 2019-20.
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Tax deduction at source - Issuance of withholding certificate - Plea of assessee that due to technical inadequacy of system, it was incapacitated from making applications as per the online format for all the parties for whom it wanted to have the withholding tax certificates issued -
Assessee was a foreign company, incorporated under the laws of the United Kingdom and resident of U.K. under the India-U.K. DTAA. It was engaged in the business of operating aircraft in international traffic and its revenue/income in relation to its international air traffic to and from India was derived from ticket sales and cargo traffic. It filed writ petition, seeking direction for issuance of a lower withholding certificate under section 197(1). 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 assessee to include the particulars of more than three parties. Held: Considering the fact that the parties to whom the withholding tax certificates were issued for the financial year 2018-19 were the same, there was no reason to doubt that assessee was incapacitated from making applications as per the online format for all the parties for whom it wanted to have the withholding tax certificates issued. Assessee also asserted that it could not make an application for more than 3 TANs initially, and thereafter, when the system allowed for applying for 50 TANs, multiple applications could not be made. The only plausible reason the names could not be added in the designated fields, was the technical inadequacy of the system. There was no reason to deny the relief sought for and it was declared that the withholding tax certificates issued by Revenue shall be effective from 1-4-2019 for financial year 2019-20.
REFERRED : British Airways Plc v. ITO & Ors. 2020 TaxPub(DT) 352 (Del-HC) and British Airways Plc v. ITO & Ors. [W.P.(C) 13496/2019, dt. 20-12-2019].
FAVOUR : In assessee's favour.
A.Y. : 2020-21
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