The Tax Publishers2020 TaxPub(DT) 0663 (Del-HC)

INCOME TAX ACT, 1961

Section 197

Where Revenue had not taken into consideration the tax already paid by assessee in the previous years and computation tendered in Court proceeds on the assumption that no payment was made by assessee, therefore, Revenue was directed to consider the matter afresh and issue a fresh withholding tax certificates under section 197 till then, assessee should continue to remain bound by withholding tax certificate issued at the rate of 1.5%.

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

Assessee assailed the order passed by Revenue under section 197 directing deduction/withholding of tax at the rate of 10% on payments made to assessee by THDC. Assessee also sought a direction to Revenue to issue order/certificates under section 197 at a nil rate in respect of THDC in pursuance of assessee's application. Alternatively, assessee sought a direction to Revenue to issue order/certificates under section 197 at the lower rate of 1.5% to THDC. Assessee was issued withholding tax certificate at rate of 1.5 % of payments made by THDC in pursuance of the contract which continues to remain in force and was operational in current year. Held: Revenue had not taken into consideration the tax already paid by assessee in previous years and computation tendered in Court proceeds on assumption that no payment was made by assessee. Following the earlier order of the court in Bently Nevada LLC v. ITO, (International Taxation) & Anr. [W.P.(C) 7744/2019 dated 29-7-2019 : 2019 TaxPub(DT) 4928 (Del-HC)], the order issued by Revenue prescribing withholding tax at the rate of 10% in respect of assessee's contract with THDC was quashed. Revenue was also directed to consider the matter afresh and issue a fresh withholding tax certificates under section till then, assessee should continue to remain bound by withholding tax certificate issued at the rate of 1.5%.

REFERRED : Mohinder Singh Gill & Anr. v. Chiief Election Commissioner & Ors. AIR 1978 SC 851 Lufthansa Cargo AG v. DCIT & Anr. W.P.(C) 9136/2019 dated 06-11-2019 : 2019 TaxPub(DT) 7551 (Del-HC) Bently Nevada LLC v. ITO & Anr. W.P.(C) 7744/2019 dated 29-7-2019 : 2019 TaxPub(DT) 4928 (Del-HC)

FAVOUR : In assessee's favour

A.Y. :



IN THE DELHI HIGH COURT

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