2024 (6) TMI 738 - HC - Income Tax

Validity of the certification issued u/s 197 for Financial Year 2023-24 - prayer for the grant of a Nil withholding tax certificate, the respondent has on due consideration provided and prescribed for a withholding tax at the rate of 15% - HELD THAT - FY 2023-24 has already come to an end. In view of the aforesaid and since the writ petitioner would have the right to apply afresh for the grant of a Nil withholding tax certificate, which would necessarily have to be examined independently, we do not find any justification to continue the instant writ petition. We accordingly dispose of the instant writ petition with liberty to the writ petitioner to apply afresh under Section 197 of the Act for FY 2024-25. Any such application that may be made shall be examined and disposed of independently. All rights and contentions of respective parties are kept open. As further provided that in case the petitioner were to succeed in the fresh application, it would undoubtedly be entitled to claim the benefit of the CBDT Circular No.E/257 CPC (TDS) Advisory to deductors making TDS payment through multiple challans in a month dated 12 September 2014. So that the interest of the writ petitioner is not prejudiced, we reserve liberty to it to assail the order impugned here afresh.

Summary

Issues involved: Validity of certification u/s 197 of Income Tax Act for FY 2023-24, Grant of "Nil" withholding tax certificate, Disposal of instant writ petition, Liberty to apply afresh u/s 197 for FY 2024-25, Entitlement to benefit of CBDT Circular No.E/257.

Validity of certification u/s 197 of Income Tax Act for FY 2023-24:
The instant writ petition challenges the certification issued u/s 197 of the Income Tax Act for FY 2023-24. The respondent prescribed a withholding tax rate of 15% instead of granting a "Nil" withholding tax certificate. However, since FY 2023-24 has ended, the court finds no justification to continue the petition. The petitioner is granted liberty to apply afresh u/s 197 for FY 2024-25, which will be examined independently, keeping all rights and contentions open.

Grant of "Nil" withholding tax certificate:
The respondent's decision to prescribe a 15% withholding tax rate instead of granting a "Nil" withholding tax certificate is noted. As FY 2023-24 has concluded, the court disposes of the instant writ petition, allowing the petitioner to apply afresh for FY 2024-25 u/s 197 of the Act. Any new application will be considered independently, and the petitioner retains the right to challenge any adverse orders.

Disposal of instant writ petition:
The court disposes of the instant writ petition concerning the certification u/s 197 for FY 2023-24. The petitioner is granted liberty to apply afresh for FY 2024-25 under Section 197 of the Act. If successful, the petitioner can claim the benefit of CBDT Circular No.E/257 dated 12 September 2014. The petitioner is also reserved the right to challenge the impugned order and any subsequent adverse decisions.

Liberty to apply afresh u/s 197 for FY 2024-25:
The instant writ petition is disposed of, allowing the petitioner to apply afresh u/s 197 for FY 2024-25. Any new application will be reviewed independently, safeguarding the interests of the petitioner. The petitioner is entitled to claim the benefit of CBDT Circular No.E/257 if successful and retains the right to challenge any adverse orders.

Entitlement to benefit of CBDT Circular No.E/257:
In case of success in the fresh application u/s 197 for FY 2024-25, the petitioner can claim the benefit of CBDT Circular No.E/257 dated 12 September 2014. To protect the petitioner's interests, the court reserves the liberty to challenge the impugned order and subsequent adverse decisions.