INCOME TAX ACT, 1961

Section 197

Tax deduction at source - Issuance of certificate for non-deduction of tax under section 197 - Reply against SCN could not be filed due to lockdown -

Petitioner was a partner in L. He earned salary and interest income. He filed application before competent authority in Form No.13 requesting to issue a certificate for non-deduction of tax under section 197 on interest income received. Application was rejected since reply against the SCN could not be filed due to lockdown. Held: Provision of section 197(2) cannot be invoked to justify rejection of the application of the petitioner for issuance of a certificate under sub- section (1) of section 197 on the ground of being barred by limitation. On the contrary, sub-section (1) of section 3 also provides for extension of limitation to 30.06.2020 or even beyond in case of furnishing of any reply, application, report, document, return, statement or such other record under the provisions of the Act which would cover the case of the petitioner. To make it more explicit, in that portion of sub-section (1) of section 3 preceding the first proviso, it is clarified that such extension of limitation up to 30-6-2020 or even beyond would be notwithstanding anything contained in the Specified Acts, in this case the IT Act. Extension of limitation period as provided by the Ordinance would have an overriding effect over the limitation provision contained in the Income Tax Act for the financial year relevant to the assessment year 2020-21. Having regard to extra-ordinary situation faced by the country in view of the pandemic and the lockdown for which the Ordinance had to be promulgated, simplicitor rejection of the application of the petitioner as having been rendered infructuous either on 31-3-2020 or on 27-4-2020 cannot be justified and was wholly unsustainable in law as well as on facts.

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2020-21

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