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2019 (12) TMI 1212 - DELHI HIGH COURTCertificate u/s 197 (1) - application of the petitioner to grant a certificate for ‘NIL’ deduction of tax at source, on the payments made to it, by Oil and Natural Gas Corporation Ltd. (ONGC-Deductor) - writ of mandamus directing the Assessing Officer to grant a certificate authorizing the aforesaid deductor to make payments to the petitioner without deducting tax at source - HELD THAT:- In absence of a certificate of deduction of tax at source at a lower rate or nil rate, a payer-whose liability it is to deduct tax at source under Section 195 of the Act, is likely to incur a risk of being declared a defaulter. However, if a certificate under Section 197 of the Act is in operation, such a consequence would not arise. At the same time, the certificate under Section 197 of the Act for deduction of tax at lower rate or nil rate, also benefits the Assessee, who would be entitled to receive full payment from the payer without deduction. It is well settled that in matters of taxation there is no question of res judicata because each year’s assessment is final only for that year and does not govern later years, because it determines only the tax for a particular period.” [Ref: Instalment Supply (P) Ltd. v. Union of India [1961 (5) TMI 53 - SUPREME COURT] ]. We cannot direct the Revenue to hold that the petitioner does not have a PE and give the consequent effect of such finding while deciding an application under Section 197 of the Act. Determination of all these questions would have to be undertaken during the course of regular assessment. The manner of determination of issues relating to the tax deduction and regular assessment are inherently and fundamentally different. While there may be certain circumstances where the finding with respect to the previous year can be taken into consideration, however, in the instant case, we cannot find any reason to hold the approach of Respondents to be patently illegal or erroneous on the face of it. The question of existence of permanent establishment, which requires a detailed enquiry, is not envisaged at the stage of deciding the application for issuance of certificate under Section 197 of the Act. The full fledged investigation can be done by the Assessing Officer during the course of assessment. Petitioner contends that the aforesaid concession was made “without prejudice to its legal position”, and cannot deprive the petitioner to contest the legal position. However, we cannot ignore the fact that Petitioner took categorical stand and prevailed upon the revenue to accept the declaration made in the said communication. Although the declaration was qualified, yet, since the petitioner requested the respondent to deduct the tax @ 4%+applicable surcharge & cess for the entire contractual revenues, revenue was justified in accepting the same and the petitioner cannot be permitted to resile there from, once the department has accepted petitioner’s proposal. Writ petition is dismissed
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