TMI Blog2021 (8) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent no.2 under Section 197 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) for the Assessment Year 2022-23, directing withholding of the tax deducted at source (TDS) at the rate of 1% for the petitioner. The petitioner further prays for a direction to the respondent nos.1 and 2 for issuing a fresh certificate under Section 197 of the Act, directing withholding of NIL TDS in terms of Article 8 of the Double Taxation Avoidance Agreement entered between India and the United Kingdom (hereinafter referred to as DTAA ). 2. The petitioner is a foreign company incorporated in the United Kingdom under the laws of United Kingdom and is registered in India under Section 592 of the Companies Act, 1956, as a branch office of a fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ware of the Income Tax Department did not accept NIL rate of tax, therefore, certificate under Section 197 of the Act was issued applying a nominal rate of TDS at 0.01%. The petitioner claims to have not challenged the same because the amount was insignificant. 7. On 30.03.2021, the petitioner again applied for the issuance of certificate under Section 197 of the Act at NIL rate of tax, however, instead was issued the Impugned Certificate dated 02.06.2021, increasing the TDS withholding amount to 1%. The respondent no.2 also uploaded the Impugned speaking order on its website, observing as under: Sir/Madam, Sub: Speaking order In view of submissions filed by the applicant and similar to earlier withholding tax order, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the respondents submits that the petitioner has an alternate efficacious remedy in form of a Revision Petition under Section 264 of the Act. He further submits that the Assessing Officer had duly noted the response received from the petitioner to the queries raised by the Assessing Officer and as the petitioner failed to supply the necessary documents to substantiate its claim of earnings being non-taxable, the Assessing Officer was of the opinion that though the profit derived from the main business of the petitioner being the operation of aircraft in international traffic was not taxable in India by virtue of Article 8 of DTAA, yet the petitioner might be engaged in incidental businesses. Therefore, with a view to safeguard the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LLOW THE RULES AND STANDARDS THEY THEMSELVES HAD SET ON PAIN OF THEIR ACTION BEING INVALIDATED. CONSEQUENTLY, THE IMPUGNED ORDER IS QUASHED ON THE GROUND THAT THE DECISION MAKING PROCESS IN THE PRESENT CASE IS CONTRARY TO LAW. 25. However, this Court is in agreement with the submission of learned standing counsel for the respondent that it is the decision making process and not the decision that can be impugned in a writ petition. To appreciate the decision making process, it is necessary to outline the provision under which the TDS rates have to be determined under Section 197 of the Act. Rule 28AA of the Income Tax Rules prescribes the procedure to be followed by the assessing officer in determining the existing and estimated liabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to follow the rules and standards they themselves had set on pain of their action being invalidated [See: Amarjit Singh Ahluwalia v. State of Punjab Ors., (1975) 3 SCC 503 : (1975) 3 SCR 82 and Ramana Dayaram Shetty v. International Airport Authority of India Ors.; (1979) 3 SCC 489]. Consequently, the assessing officer cannot ignore the mandate of Rule 28AA and proceed on any other basis. 28. However, in the present case, the assessing officer has not followed the aforesaid rule as there is no reference in the impugned reason to any computation carried out under Rule 28AA. 29. In fact, this Court vide order dated 8th December, 2020 had granted time to the respondent to place on record the computation of TDS rates under Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X
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