The Tax Publishers2020 TaxPub(DT) 5587 (Bom-HC) : (2021) 430 ITR 0273 : (2021) 277 TAXMAN 0119

INCOME TAX ACT, 1961

Section 197 Rule 28AA

Since respondent was required to pass an order under section 197 either rejecting application for such certificate or allowing such application resulting in issuance of certificates which might be at rates higher than nil rate sought for by assessee, such an order must be supported by reasons. Not only that, copy of such an order has to be furnished to concerned assessee who could challenge the same under section 264 if he felt aggrieved. Not passing an order to that effect or keeping such an order in file without communication vitiated the certificates. Therefore, impugned certificates were quashed and matter was remanded back to respondent for passing fresh order and issuing consequential certificates under section 197 by complying with the requirements of rule 28AA and after giving due opportunity of hearing to assessee.

Tax deduction at source - Certificate under section 197 - Issuance of lower rates certificate instead of nil rate certificate sought for, however, without assigning any reason -

Assessee filed application seeking issuance of nil rate tax withholding certificates under section 197. However, Dy.CIT issued lower rate tax certificates to assessee under section 197. Assessee by way of writ petition challenged this contending that no reasons were furnished by the respondents as to why, instead of nil tax withholding certificates under section 197, certificates at higher rates were issued to assessee. Held: Since respondent was required to pass an order under section 197 either rejecting application for such certificate or allowing such application resulting in issuance of certificates which might be at rates higher than nil rate sought for by assessee, such an order must be supported by reasons. Not only that, copy of such an order has to be furnished to concerned assessee who could challenge the same under section 264 if he felt aggrieved. Not passing an order to that effect or keeping such an order in file without communication vitiated the certificates. Therefore, impugned certificates were quashed and matter was remanded back to respondent for passing fresh order and issuing consequential certificates under section 197 by complying with the requirements of rule 28AA and after giving due opportunity of hearing to assessee.

Relied:Tata Teleservices (Maharashtra) Ltd. v. Dy. CIT & Ors. Writ Petition No. 2701 of 2017 : 2018 TaxPub(DT) 667 (Bom-HC) and Larsen and Toubro Ltd. v. Asstt. CIT (2010) 326 ITR 514 (Bom) : 2010 TaxPub(DT) 1880 (Bom-HC).

REFERRED :

FAVOUR : Matter remanded.

A.Y. :



IN THE BOMBAY HIGH COURT

SUBSCRIBE TaxPublishers.inSUBSCRIBE FOR FULL CONTENT

TaxPublishers.in

'Kedarnath', 7, Avadh Vihar, Near Nirali Dhani,

Chopasni Road

Jodhpur - 342 008 (Rajasthan) INDIA

Phones : 9785602619 (11 am - 5 pm)

E-Mail : mail@taxpublishers.in / mail.taxpublishers@gmail.com