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TMI Blog2020 (10) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 from the limited liability partnership on which there is tax deduction at source (TDS). Petitioner incurred loss under the head 'income from house property' amounting to Rs. 59,666.00. It is stated that petitioner had earned interest income from M/s. Lakhani Builders Private Limited amounting to Rs. 4,82,80,790.00 besides other interest income of Rs. 4,39,357.00. It is further stated that petitioner had also paid interest amounting to Rs. 4,86,55,285.00. Thus, after adjustment the interest income is Rs. 64,862.00. 4. On 26.02.2020, petitioner filed an application in Form No.13 requesting respondent No.2 to issue a certificate for non-deduction of tax under section 197 of the Act on interest income received from M/s. Lakhani Builders Private Limited. Be it stated that respondent No.2 is the competent authority under the Act to verify the application of the petitioner for non-deduction of TDS and grant of certificate under section 197 of the Act. 4.1. In connection with the application, petitioner filed various details before respondent No.2 on 04.03.2020. Additional details were called for by respondent No.2, which were submitted by the petitioner on 18.03.2020. 5. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 10.04.2020 calling upon the petitioner to submit certain additional details. It is stated that petitioner could not reply to the said notice as the second phase of lockdown was in place and his movements were restricted. This was also because the details sought for were kept in the office of the petitioner which is separate from his residence. 9.2. When the petitioner logged in to the TDS Reconciliation Analysis and Correction Enabling System (TRACES) on 30.07.2020, he found that the status of his application was shown as 'rejected'. 10. Aggrieved, present writ petition has been filed seeking the reliefs as indicated above. 11. Contention of the petitioner is that issuance of the order dated 03.04.2020 by respondent No.1 was not justified in view of all pervasiveness of the lockdown. That apart, the said order has disregarded the ordinance dated 31.03.2020. Rejection of the application of the petitioner is without furnishing any reasons and without granting proper and adequate opportunity of hearing to the petitioner. 12. Respondent No.2 has filed reply affidavit. As narrated by respondent No.2, the assessee i.e., the petitioner had made an online application on 27.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearly stipulates that action contemplated under section 3 would not include payment of any amount as referred to in sub-section (2) of section 3. Therefore, it is contended that the Ordinance does not extend the due date of deduction or payment of TDS. 13. Contention of respondent No.2 is that in terms of the order passed by the CBDT, the time limit for approving or rejecting such application which was till 31.03.2020 was extended till 27.04.2020. Since petitioner failed to avail the benefit of the extended period till 27.04.2020, application of the petitioner became barred by limitation. 14. Petitioner has filed rejoinder affidavit wherein it is contended that petitioner has questioned rejection of his application for lower / no TDS because there was no adjudication on the application; rejection was without considering the materials on record; and finally, before rejecting the application, no opportunity of hearing was given to the petitioner. 14.1. Regarding the contention of respondent No.1, it is stated that petitioner could not furnish relevant documents in terms of the questionnaire of respondent No.2 because the details were voluminous which were available only in his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be penalised for non-compliance because of lockdown. She therefore submits that such decision may be interfered with and respondent No.2 may be directed to consider afresh the application of the petitioner for issuance of a certificate under section 197 of the Act on the basis of materials on record and after hearing the petitioner. 17. Per contra, Mr. Suresh Kumar submits that petitioner had initially made the application before the income tax authorities at Thane though respondent No.2 is the jurisdictional assessing officer. Ultimately, the application was received in the office of respondent No.2 on 13.03.2020. Though petitioner had replied to the initial queries of respondent No.2, the same was found to be not satisfactory by respondent No.2. When the limitation had expired on 31.03.2020, application of the petitioner was pending. In the meanwhile, lockdown was imposed in the entire country. To mitigate the genuine hardship of tax payers desirous of obtaining a certificate under section 197, CBDT had stepped in and by the order dated 03.04.2020 had extended the limitation till 27.04.2020 for taking a decision on such application, the only requirement being that the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons the factors which are required to be taken into consideration while determining existing and estimated liability by the assessing officer. 21. Having noted the broad statutory framework regarding issuance of a certificate for TDS either at lower rate or at nil rate, we may advert to the facts of the present case, though admittedly, there is no dispute as such on facts. Petitioner's application for a certificate under section 197(1) was pending as on 31.03.2020. In the meanwhile, lockdown was declared through out the country. To mitigate the hardship of the tax payers, CBDT came up with the order dated 03.04.2020 extending the time limit for taking a decision on such applications till 27.04.2020, the only requirement being that the concerned applicant should inform the jurisdictional assessing officer about pendency of any application. Though respondent No.2 had issued notice to the petitioner on 10.04.2020, petitioner did not or could not respond to the same. The extended time-limit having expired on 27.04.2020, petitioner's application was rejected as having been rendered infructuous. Decision to that effect could be recorded only on 08.06.2020 when the offices reopen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or before 30.06.2020 or any later date notified by the central government, the rate of interest payable for the period of delay shall not exceed three-fourth percent for every month or part thereof and no penalty and prosecution shall be sanctioned for the delay in payment. 23. Before dilating on the provisions contained in section 3 of the Ordinance, it needs to be mentioned that the Ordinance has been promulgated in exercise of the powers conferred by clause (1) of Article 123 of the Constitution of India. Clause (1) says that if at any time except when both Houses of Parliament are in session, the President is satisfied that circumstances exist which render it necessary for him to take immediate action, he may promulgate such ordinances as the circumstances appear to him to require. Clause (2) is relevant and it says that an ordinance promulgated under Article 123 shall have the same force and effect as an Act of Parliament. However, the procedure is laid down for placing such ordinance before both Houses of Parliament. 24. It is well settled that an ordinance made by the President is not an executive act. Power to promulgate ordinance is legislative in nature. An ordinance i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act for the financial year relevant to the assessment year 2020-21. 26. We may now refer to the order dated 03.04.2020 passed by respondent No.1 under section 119 of the Act. It says that due to outbreak of pandemic there is severe disruption in the normal functioning of all sectors of the economy including functioning of the Income Tax Department. In such a scenario, non-disposal of applications filed under sections 195, 197 and 206-C(9) of the Act in a timely manner may cause genuine hardship to the applicants. In the absence of the certificates, payments may not be received. That apart, the field officers were also having constraints in dealing with such applications in view of the lockdown. Therefore, to mitigate the hardship of the assessees and buyers / licensees / lessees, directions were issued under section 119 of the Act. As per paragraph 3 of the order, in those cases where assessees had timely filed applications and such applications were pending for disposal as on 03.04.2020, the applicant should intimate vide email the concerned assessing officer about pendency of such application furnishing evidence of filing of application. As per paragraph 4, assessing officer sha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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