2020 (10) TMI 256 - HC - Income Tax

Rejection of application u/s 197 - Petitioner challenging impugned TDS Certificate - seeking directions to the respondents to pass an order in the revision application filed by the petitioner - petitioner prays for directions to the respondent authorities to issue a fresh Certificate of Tax Deduction at Source at lower rate - HELD THAT - A perusal of the file reveals that the petitioner has preferred a revision application dated 14th July, 2020 under Section 264 of the Act, which is still pending. Accordingly, the present writ petition and pending applications are disposed of with a direction to respondent no.1 to decide the petitioner s revision application within four weeks, after giving an opportunity of hearing to the petitioner, by way of a reasoned order in accordance with law. All the rights and contentions of the parties are left open. This Court clarifies, at the cost of repetition, that in view of the pendency of the revision application of the petitioner, it has not dealt with the specific prayer for quashing of the order dated 01st July, 2020.

Summary

Issues:
Challenge to impugned TDS Certificate and directions for revision application and fresh Certificate of Tax Deduction at Source at a lower rate.

Analysis:

Issue 1: Challenge to TDS Certificate
The petitioner filed a writ petition challenging the TDS Certificate issued for the Financial Year 2020-21 at a rate of 1.5%, despite a previous court order directing issuance at a lower rate of 1%. The petitioner argued that the assessing officer must provide reasons for allowing or disallowing an application under Section 197 of the Act, emphasizing that rejection does not rest solely on the discretion of the authority.

Issue 2: Revision Application
The petitioner had also filed a revision application under Section 264 of the Act, dated 14th July, 2020, which was pending. The court disposed of the present writ petition and other applications, directing respondent no.1 to decide on the petitioner's revision application within four weeks. The court stressed the importance of providing the petitioner with an opportunity for a hearing and issuing a reasoned order in accordance with the law. The court clarified that it did not address the specific prayer to quash the order dated 01st July, 2020, due to the pending revision application.

Conclusion
The High Court directed the respondent to decide on the petitioner's revision application within a specified timeframe, ensuring a fair hearing and a reasoned order. The court emphasized the importance of following due process and left all rights and contentions of the parties open. The judgment highlighted the significance of providing reasons for decisions under Section 197 of the Act and the need for a fair and lawful process in addressing such matters.