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2020 (1) TMI 1154 - HC - Income TaxCertificates u/s 197 at the lower rate of 1.5% - Revenue prescribing withholding tax at the rate of 10 % in respect of the Petitioner’s contract with THDC India Limited - Petitioner was issued withholding tax certificate at rate of 1.5 % of payments made by THDC India Limited in pursuance of the contract which continues to remain in force and is operational in the current year - HELD THAT:- The notification dated 31.12.2018 issued by the Directorate of Income Tax (Systems) of the CBDT by resort to Rule 28 (2) of the Income Tax Rules, 1962 cannot enlarge the scope of the Respondents to consider the assessed, returned or estimated income for a period in excess of the last four previous years. Rule 28 (2) is merely an empowering rule, which empowers the named authorities looking after the “systems” to lay down procedure, format and standards for insuring secured capture and transmission of data, and uploading of documents and for evolving and implementing appropriate security, archival and retrieval policies in relation to furnishing of form No. 13. Respondents have not taken into consideration the tax already paid by the Petitioner in the previous years and the computation tendered in Court proceeds on the assumption that no payment has been made by the Petitioner. On that premise, tax as well as interest under Section 234B and 234C have been added, which cannot be the case. Following the earlier orders of this court in Bently Nevada LLC v. Income Tax Officer, Ward-1(1)(2), International Taxation & Anr. [2019 (7) TMI 1503 - DELHI HIGH COURT] and Lufthansa Cargo AG V. Deputy Commissioner Of Income Tax And Anr. [2019 (11) TMI 759 - DELHI HIGH COURT] we quash the impugned order dated 05.07.2019 issued by the Respondents prescribing withholding tax at the rate of 10 % in respect of the Petitioner’s contract with THDC India Limited. Also direct the Respondents to consider the matter afresh and issue a fresh withholding tax certificates under Section 197 of the Act after taking into account the aspects taken note of hereinabove. Till then, the Petitioner shall continue to remain bound by the withholding tax certificate issued in respect of the immediately preceding year i.e. at the rate of 1.5% qua the payments received by it from THDC India Limited.
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