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2010 (4) TMI 223 - HC - Income TaxDeduction of tax at source- Non-resident- The petitioner is a non-resident company incorporated under the laws of the United States of America. The petitioner operates in India with branches at New Delhi and Mumbai. The petitioner has filed returns in India from the assessment year 1993-94. On January 8, 2010, the petitioner made an application under section 195(3) of the Income-tax Act, 1961, for the assessment year 2011-12 to the Deputy Director of Income-tax, International Taxation 4(1) seeking a nil withholding certificate for payments received for services rendered to clients/ customers, group entities and for interest received on deposits made with banks. Show cause notice issued by rejecting its application for a nil withholding certificate. Held that- the Assessing officer had acknowledged the pendency of the mutual agreement procedure proceedings. The basis on which a certificate u/s 195(3) was declined was exfaice contrary to law and amounted to a patent disregard of the binding provisions of the memorandum of understanding between the Governments of India and the US. The order was not valid and liable to quash.
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