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2021 (8) TMI 184 - HC - Income TaxWithholding of the tax deducted at source (TDS) - petitioner prays for a direction to the respondent nos.1 and 2 for issuing a fresh certificate u/s 197 directing withholding of NIL TDS in terms of Article 8 of the Double Taxation Avoidance Agreement entered between India and the United Kingdom (‘DTAA’) - HELD THAT:- The Impugned ‘speaking order’ has been reproduced hereinabove. Apart from stating that the petitioner may have other sources of income, the Impugned Order does not reflect compliance with Rule 28AA of the Income Tax Rules, 1962. None of the considerations mentioned in Rule 28AA appear to have been considered by the respondent in passing the impugned ‘speaking order’. This Court in Manpowergroup Services India Pvt. Ltd. [2020 (12) TMI 934 - DELHI HIGH COURT] as held that the Assessing Officer cannot ignore the mandate of Rule 28AA of the Rules and proceed on any other basis, as the Government is bound to follow the rules and standards they themselves have set on the pain of their action being invalidated. In absence of following the said mandate, the Impugned Order passed is liable to be quashed. In the present case as well, it is not evident from the Impugned Order whether the Assessing Officer has followed the mandate of Rule 28AA of the Rules. In fact, on a specific query in this regard, the learned counsel for the respondents could not deny this position of non-compliance. Therefore, the Impugned Order and the certificate issued are liable to be quashed on this ground. We may also take note of the judgment of this Court in Lufthansa Cargo AG [2019 (11) TMI 759 - DELHI HIGH COURT] wherein under similar circumstances, this Court had held that where an order discloses non-application of mind to germane and relevant considerations including the previous assessment orders and the certificates issued under Section 197 of the Act, the order passed shall be arbitrary and liable to be set aside. Impugned ‘speaking order’ and the Certificate dated 02.06.2021 are quashed. The respondents are directed to pass a fresh order in accordance with law. In the meantime, until a fresh certificate is issued by the respondents, the petitioner’s receipts of payment shall abide by the withholding tax certificates for the preceding period at the rate of 0.01%.
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