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2018 (10) TMI 611 - HC - Income TaxCertificate of exemption from TDS u/s 197 - AO allowed TDS @1% at concessional rate as against 10% - Assessee incurs huge loss and sought full exemption - Department has allowed for lower deduction of tax for last two years - Held that:- Under subsection (1) of Section 197 it is an Assessing Officer who can entertain and decide an application of an assessee for either total exemption or permission for reduced tax deduction at source. The statute has used the language that if the Assessing Officer is satisfied that the total income of the recipient justifies the deduction of incometax at any low rates or no deduction of incometax, as the case may be, the Assessing Officer shall on application made by the assessee in this behalf give to him such certificate as may be appropriate. Necessarily, therefore, the satisfaction of the Assessing Officer at that stage about the total income of the recipient justifying reduced collection of tax at source would be prima facie in nature. Two things emerge from the said provisions; firstly, that such consideration cannot be devoid of exercise of sound discretionary powers and based on mere ipse dixit of the Assessing Officer. Secondly, that the power vests with the Assessing Officer. No provision or rule is brought to our notice which would enable the higher authority to govern such discretion of the Assessing Officer statutorily vested in him under subsection (1) of Section 197 of the Act. We do not accept the contention of the petitioner that the notes put up by the Assessing Officer suggesting collection of tax at reduced rate of 1% was expression of his final decision. The Assessing Officer, therefore, not having expressed his final decision his opinion would not be binding to the Department. Petition dismissed - Decided against the assessee.
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