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| The Tax Publishers2019 TaxPub(DT) 7120 (Del-HC) INCOME TAX ACT, 1961
Section 197
Where section 197(1) does not require that AO should have good reasons to issue the certificate under section 197(1) and the said reasons should be communicated to the assessee, therefore, Revenue was directed to provide to assessee, within one week, the reasons recorded for issuance of certificate fixing the rate of deduction of TDS at 4%.
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Tax deduction at source - Discretionary power under section 197 - Certificate for deduction at lower rate -
The grievance of assessee was related to issuance of certificate under section 197(1) whereby the rate of deduction of tax at source was raised from 1% to 4%. Petitioner claims that the sudden rise of the rate at which the TDS was to be deducted was arbitrary and no reasons for the same have been communicated to assessee. Held: Section 197(1) does not require AO to grant personal hearing to assessee prior to the issuance of the certificate. All that was required was that AO should have good reasons to issue the certificate under section 197(1) and the said reasons should be communicated to the assessee. Standard operating procedure was formulated to provide that whenever there was an upward revision of the rate of deduction at source while issuing the certificate under section 197(1), assessee would be communicated the reasons for the same. Revenue was directed to provide to assessee, within one week, the reasons recorded for issuance of certificate fixing the rate of deduction of TDS at 4%.
REFERRED : Jiangdong Fittings Equipment Co. Ltd. v. Dy. CIT & Ors. W.P.(C) 9389/2019 : 2019 TaxPub(DT) 6691 (Del-HC), Bently Nevada LLC v. ITO & Anr. [W.P.(C) No. 7744/2019 decided on 29-7-2019] : 2019 TaxPub(DT) 4928 (Del-HC), Tata Teleservices (Maharashtra) Ltd. v. Dy. CIT (TDS) & Ors. (2018) 402 ITR 384 (Bom) : 2018 TaxPub(DT) 0667 (Bom-HC)
FAVOUR : Directions issued
A.Y. :
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