9911796707
TMI Blog2012 (9) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... , as narrated in the petition may be noticed. The petitioner is a company incorporated under the provisions of the Companies Act, 1956 and is subsidiary of Serco BPO Holdings Private Limited. It is engaged in providing business support services to domestic customers through its Business Processing Outsourcing units in India. Provision of business support services to customers in the domestic Indian market involves aggressive price competition with relatively low margins due to existence of multiple players in the market. The same has resulted in significant losses to the petitioner. According to the petitioner, in view of substantial losses incurred by it during the financial years 2008-09 to 2011-12, the estimated taxable income shall be N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come Tax Rules, 1962 (for brevity, "the Rules"). Further, the petitioner has not availed the statutory remedy of revision under section 264 of the Act. On the above premises, prayer for dismissal of the petition has been made. 4. Learned counsel for the petitioner submitted that under Section 197 read with Rule 28AA of the Rules, the respondent- department can decline issuance of TDC in following two eventualities :- (i) in case the Assessing officer was not satisfied that the recipient had justified the deduction of income tax at any lower rates; or (ii) no deduction of income tax was to be made on the income of the recipient. According to the counsel, any other consideration was legally not permissible and the respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case may be, the Assessing Officer shall, on an application made by the assessee in this behalf, give to him such certificate as may be appropriate. (2) Where any such certificate is given, the person responsible for paying the income shall, until such certificate is cancelled by the Assessing Officer, deduct income-tax at the rates specified in such certificate or deduct no tax, as the case may be. (2A) The Board may, having regard to the convenience of assessees and the interests of revenue, by notification in the Official Gazette, make rules specifying the cases in which, and the circumstances under which, an application may be made for the grant of a certificate under subsection (1) and the conditions subject to which such certificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o deduction of tax from income other than dividends. Rule 28AB provides for certificate of no deduction of tax in case of certain entities whereas Rule 29 relates to certificate of no deduction of tax or deduction at lower rates from dividends. For resolving the present controversy, Rule 28AA is the relevant rule. Rule 28AA of the Rules reads thus:- Rule 28AA. "(1) Where the Assessing Officer, on an application made by a person under sub-rule (1) of rule 28 is satisfied that existing and estimated tax liability of a person justifies the deduction of tax at lower rate or no deduction of tax, as the case may be, the Assessing Officer shall issue a certificate in accordance with the provisions of sub-section (1) of section 197 for deduction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tificate." 10. Under Sub-rule(l) of Rule 28AA of the Rules, on satisfaction of the Assessing officer that the existing and estimated tax liability of a person justifies the deduction of tax at lower rate or no deduction of tax, the Assessing Officer shall issue a certificate in terms of Section 197(1) of the Act. Sub-rule (2) enumerates the manner for determination of existing and estimated liability referred to in Sub-rule (1). The certificate remains operative for the period specified therein until cancelled by the Assessing officer under Sub-rule (3). It remains valid only with regard to the person responsible for deducting the tax and named therein in terms of sub- rule (4). Sub-rule(5) provides that the certificate shall be issued dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction vested in him under the Act. 12. The objection raised by the Revenue with regard to alternative remedy of revision available under Section 264 of the Act as held by the Delhi High Court in Sis Live's case (supra) and also by the Bombay High Court in Larsen & Toubro Ltd.'s case (supra) cannot act as a complete bar to the exercise of writ jurisdiction of this Court. 13. The Apex Court in Ram & Shyam Co. v. State of Haryana AIR 1985 SC 1147 delving into this issue had noticed as under:- "Ordinarily it is true that the Court has imposed a restraint in its own wisdom on its exercise of jurisdiction under Article 226 where the party invoking the jurisdiction has an effective, adequate alternative remedy. More often, it has been expressly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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