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2020 (12) TMI 831 - HC - Income TaxWithholding certificates u/s 197 issued at lower rate tax - Certificate for deduction at lower rates or no deduction of tax from income other than dividends - revision u/s 264 - whether respondents were justified in issuing lower rate tax certificates to the petitioner under section 197 of the Act for the assessment year 2021-22 corresponding to the financial year 2020-21 as against the request for such certificate at nil rate? - HELD THAT:- Before issuance of certificates u/s 197 the same must be preceded by an order. That order must disclose reasons and is an order passed in exercise of quasi-judicial powers. Such an order can be assailed in revision under section 264 - Therefore, an order under section 197 must not only contain reasons but the same has also to be provided to the assessee who seeks a certificate under section 197. Otherwise, how will such an assessee assail the order in revision under section 264? In the course of hearing, learned standing counsel submitted that respondent No.1 might have recorded reasons for issuance of certificates not at nil rate but learned counsel for the petitioner submits that petitioner has not been served with copy of any such order. The same has also not been annexed to the reply affidavit filed on behalf of the respondents. Respondents are required to pass an order u/s 197 either rejecting the application for such certificate or allowing such application resulting in issuance of certificates which may be at rates higher than nil rate sought for by the assessee, such an order must be supported by reasons. In the instant case, we do not know the reasons for not granting nil rate certificates to the petitioner under section 197 of the Act. The contemporaneous order required to be passed under section 197 of the Act is also not available. Referring to law laid down by this Court in Larsen & Toubro [2010 (4) TMI 414 - BOMBAY HIGH COURT] as well as in Tata Teleservices (Maharashtra) Limited [2018 (2) TMI 192 - BOMBAY HIGH COURT] we have no other alternative but to set aside and quash the impugned certificates dated 07.08.2020. Matter is remanded back to respondent No.1 for passing fresh order and issuing consequential certificates under section 197 of the Act by complying with the requirements of Rule 28AA of the Rules and after giving due opportunity of hearing to the petitioner.
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