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TMI Blog2005 (11) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... d. under s. 194C(4) of the Act. The briefly stated facts are that the assessee-company paid charges for conversion of yarn to M/s GTV Spinners Ltd. from 1st July, 2000 to 31st March, 2001 amounting to Rs. 1,38,90,700. These conversion charges were paid without deduction of tax between 1st July, 2000 to 31st March, 2001 only on the ground that the contract party, M/s GTV Spinners Ltd. had obtained a certificate for non-deduction of tax from the concerned AO. However, after going through the certificate, it is gathered that the certificate was issued on 25th April, 2001 and the relevant certificate reads as under: "I hereby authorize you to pay the contract amount to M/s GTV Spinners Ltd., 245E. Pulankinar 642122, Udumalpet after deducting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icate until and unless it is cancelled by the AO under s. 194C(5) of the Act. On the other hand, the learned Departmental Representative relied on the orders of the lower authorities. 4. We have heard both the sides and considered the arguments. We have examined the case record. The above certificate issued by the Jt. CIT, Special Range-II, Chennai, is dt. 25th April, 2001 and this is in favour of the assessee-company. Authorizing not to deduct the tax on the contract amount paid to M/s GTV Spinners Ltd. This certificate was issued vide its application dt. 12th March. 2001 in which the schedule of payment is attached which reads as under: -------------------------------------------------- No. Full name Date of Nature Date by Sums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he certificate dt. 25th April, 2001 will come into force from 1st July, 2002 (2001) to 31st March, 2002. The CIT(A) has relied on the circular issued by the Board bearing No. 774, dt. 17th March, 1999. No doubt that the certificate was issued under s. 197 of the Act. It states that the certificate issued under s. 197(1) of the Act is effective only prospectively and not retrospectively. Whether a certificate issued by the AO to a payee-company, i.e., M/s GTV Spinners Ltd. can have retrospective effect not to deduct the tax at source by the assessee-company. 5. We have to go through the provisions of s. 194C(4) and (5) of the Act which reads as under: "194C(4) : Where the AO is satisfied that the total income of the contractor or the sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax merely on intimation from M/s GTV Spinners Ltd. vide their letter dt. 16th July, 2000 wherein it was stated that it is moving a petition to the AO to obtain a certificate not to deduct tax at source. We have gone through the case law relied on by the learned counsel for the assessee in the case of ITO vs. Jaipur Udyog Ltd. (1996) 134 CTR (SC) 384 : (1996) 217 ITR 190 (SC) and observed that the issue decided by the Hon'ble apex Court is entirely different. The facts in the present case and before the Hon'ble apex Court are distinguishable. The issue before us is as to whether the certificate issued by the ITO, TOO, can be operated with retrospective basis and whether the AO can issue a retrospective certificate which was not the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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