2023 (8) TMI 1471 - HC - Income Tax

Application for tax deduction certificate u/s 197 - petitioner s application seeking issuance of a certificate for deduction of tax at source at nil rate - Assessee received monetary compensation against 33, 482 Employee Stock Options (ESOPs) from a group company of its previous employer a company incorporated in Singapore - HELD THAT - We notice albeit upon perusal of the impugned order that initially the ESOPs granted to the petitioner numbered 1, 27, 552; this position obtained as on 01.11.2014. It appears that because of disinvestment carried out in FPS the value of the stock options held by the petitioner on the record date tumbled to 33, 482 and therefore the aforementioned amount was paid according to the petitioner as compensation. We would like the petitioner to place on record the details as to how the stock options fell from the initial number i.e. from 1, 27552 to 33, 482. Learned counsel for the petitioner says that he will file an additional affidavit to explain the exact position. The affidavit will be filed within the next 10 days; a copy of which will be furnished to Mr Prashant Meharchandani learned senior standing counsel who appears on behalf of the respondents/revenue. List the matter on 06.10.2023.

Summary

Issues involved: Challenge to order regarding application for tax deduction certificate u/s 197 of the Income Tax Act, 1961.

Summary:
The writ petition challenges an order by the revenue authorities regarding the petitioner's application for a tax deduction certificate at a "nil" rate u/s 197 of the Income Tax Act, 1961. The petitioner received monetary compensation for 33,482 Employee Stock Options (ESOPs) from a group company of their previous employer, Flipkart Private Limited (FPS). Initially, the petitioner had 1,27,552 ESOPs, which decreased due to disinvestment in FPS. The petitioner is required to provide details on how the stock options reduced from 1,27,552 to 33,482. The petitioner has undertaken to file an additional affidavit within 10 days to clarify this matter, with the next hearing scheduled for 06.10.2023.