2014 (12) TMI 854 - HC - Income Tax

Issuance of certificate for deduction at lower rate u/s 197 for FY 2014-15 - Held that - Assessee claimed that the rate of tax deducted at source insofar as their receipts are concerned should be Nil, whereas, the AO has directed that TDS be deducted at the rate of 5.5 per cent, which, although is a lower rate than prescribed, is not the Nil rate desired by the assessee revenue seems to have added up the tax liabilities of the previous three years, whereas, in fact, according to the assessee, two out of the three years liability has already been deleted in appeal and in respect of the third year also an appeal is pending on the same ground and is likely to be deleted - since the assessee is entitled to file a revised application u/s 197 within one week Decided in favour of assessee.

Summary

Issues:
1. Issuance of Certificate under Section 197 of the Income-tax Act, 1961 for the financial year 2014-15.

Analysis:
The writ petition in question deals with a dispute regarding the rate of tax deduction at source for the petitioner's receipts. The petitioner sought a Nil rate of TDS, but the Assessing Officer directed a 5.5 per cent deduction. There is a disagreement over the petitioner's existing tax liabilities, with the revenue aggregating liabilities from the past three years. However, the petitioner's counsel argues that two out of the three years' liabilities have been deleted, and an appeal is pending for the third year. The court directed the petitioner to file a revised application under Section 197 within a week, allowing the Assessing Officer to dispose of it within three weeks thereafter.

The judges noted that the issuance of the Certificate under Section 197 has become an annual dispute for the petitioner. They emphasized the need for expeditious disposal of such applications, suggesting a timeline of not later than 6 weeks for TDS Certificates under Section 197. The court highlighted the importance of timely resolution and encouraged the petitioner to submit the application at the beginning of the financial year for prompt processing. Ultimately, the writ petition was disposed of with the mentioned directions for the petitioner to follow.

This judgment underscores the significance of timely processing of applications under Section 197 of the Income-tax Act, aiming to resolve disputes efficiently and ensure clarity regarding tax liabilities and deductions. The court's directive for prompt disposal of such applications within a specified timeframe reflects the commitment to streamline the certification process and address recurring issues effectively.