2022 (3) TMI 388 - HC - Income Tax

Issuance of 'Lower / Nil Deduction Certificate' u/s 197 - due to some technical issues on TRACES Portal, approval could not be uploaded on the Portal - HELD THAT - Respondents further states on instruction that approval is likely to be uploaded on TRACES Portal today itself, latest by Friday. Appellant submits that in view of categorical statement made by the Respondents in the counter affidavit and submission by learned counsel for the Respondent on instructions, grievances of the petitioner appear to have been redressed. Let the e-mail containing instruction be taken on record. Having regard to the specific stand of the Respondent relating to issuance of 'Lower Deduction Certificate' u/s 197 of Income Tax Act, 1961, it appears that the grievances of the petitioner have been satisfied. Writ petition is accordingly disposed of.

Summary

Issues:
1. Rejection of application for No deduction of Income Tax Certificate u/s 197 of the Income Tax Act, 1961.
2. Delay in issuance of the certificate and subsequent rejection.
3. Liability to make payment and recovery of demands by the Income Tax Department.
4. Consideration of new application for 'Nil Deduction Certificate' under section 197 of the Income Tax Act, 1961.

Analysis:

1. The petitioner filed a writ petition seeking the setting aside of the ex-parte rejection order dated Nil passed by the Respondent Income Tax Department. The rejection was based on outstanding TDS/TCS demand and the non-acceptance of estimated profit projection due to post-COVID business conditions. The petitioner requested the immediate issuance of the No deduction of Income Tax Certificate u/s 197, emphasizing the delay of more than nine months and lack of consideration of submitted documents. The court was urged to declare the petitioner not liable for demands from 2008-09 to 2017-18, citing relevant judgments and approvals under the Insolvency and Bankruptcy Code, 2016.

2. The Respondent CIT (TDS), Patna, informed the court that approval for a 'Lower / Nil Deduction Certificate' under section 197 had been granted but faced technical issues in uploading the approval on the TRACES Portal. The Deputy Commissioner of Income Tax, TDS Circle, Ranchi, recommended a 'Nil' deduction certificate for the petitioner based on financial details and previous year's demands. The Respondents assured that the approval would be uploaded promptly, addressing the petitioner's concerns.

3. Considering the Respondent's commitment to issuing the 'Lower Deduction Certificate' and the technical delay in uploading the approval, the court acknowledged that the petitioner's grievances seemed resolved. The court disposed of the writ petition in light of the Respondent's actions and the satisfaction of the petitioner's concerns regarding the issuance of the certificate under section 197 of the Income Tax Act, 1961.

This detailed analysis highlights the issues raised in the judgment, the arguments presented by both parties, and the court's decision based on the resolution of the petitioner's grievances regarding the No deduction of Income Tax Certificate application.