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TMI Blog2021 (12) TMI 1085X X X X Extracts X X X X X X X X Extracts X X X X ..... ugned order dated 07.09.2021 and remand the matter back to the Assessing Officer, who may pass a fresh order within four weeks from today. The petitioner is directed to provide whatever relevant information is called for by the Assessing Officer without any delay, so that the order is passed within the time frame fixed by us. In the interim, the petitioner will be entitled to avail of the Nil rate of withholding Tax, as has been the position in the past several years consistently. - W. P. (C) 12002/2021 - - - Dated:- 12-11-2021 - HON'BLE MR. JUSTICE VIPIN SANGHI HON'BLE MR. JUSTICE JASMEET SINGH For the Petitioner : Mr. Sachit Jolly, Mr. Rohit Garg, Ms.Disha Jham and Mr. Sohum Dua, Advocates For the Respondents : Mr. Sunil Agarwal, Mr. Tushar Gupta and Mr. Samarth Chaudhari, Advocates ORDER CM No. 37106/2021 1. Exemption allowed, subject to all just exceptions. 2. The application stands disposed of. W.P.(C) 12002/2021 and CM No. 37105/2021 3. Issue notice Mr. Agarwal appears and accepts notice. On service of advance notice, Mr. Agarwal has also filed his submissions. 4. With the consent of parties, we have proceeded to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and germane. The reasons on which the impugned order is premised and which have been provided to the petitioner, read as follows:- Order u/s 197 of the Income Tax Act, 1961 M/s Celestial Aviation Trading 64 Limited ( CAT 64‟) is a tax resident of Ireland. The assessee is engaged in the business of aircraft leasing. The applicant has entered into Aircraft Specified Lease Agreements dated 21.10.2016 regarding lease of aircraft with Air India Limited ( AIL‟), a company incorporated under the laws of Indian having its registered office in New Delhi. The assessee has filed an application requesting for issue of NIL withholding tax certificate u/s 197 of the I.T. Act, 1961 in respect of payment receivable from Air India Limited on account of payments amounting to ₹ 45,65,90,956/- for Aircraft Specified Lease Agreements. It is to be mentioned that cases u/s 147 of the I.T. Act, 1961 opened in the case of group companies of Celestial Aviation Trading 64 Limited for the A.Y. 2012-13 and 2013-14 and notice u/s 148 of the I.T. Act, 1961 were issued in both the years for the reason to believe that assessee had made payments and not deducted the TDS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eassessment proceedings are pending in group companies involved in the similar kind transactions with similar agreements, the applicant may be authorized to receive the lower deduction certificate u/s 197 of the I.T. Act 1961 @ 10% (excluding education cess, surcharge etc) for the F.Y. 2021-22. The above proceedings and order are only for purpose of issuance of TDS certificate u/s. 197 of the IT Act, 1961. Actual taxability and rate thereof shall be determined during the regular assessment proceedings under the IT Act, 1961. Accordingly, the assessee is hereby granted TDS @ 10% upto an amount of ₹ 45,65,90,956/- (excluding Education Cess/Surcharge as applicable). This order has been passed after seeking prior approval of the Ld. Additional Commissioner of Income Tax, Range 1(2), New Delhi and Commissioner of Income Tax, International Taxation-1, New Delhi vide order sheet dated 13.07.2021 and 02.09.2021. LAXMI BARTHWAL WARD INT TAX 1(2)(1) 10. Mr. Jolly submits that Section 197 itself is made subject to Rule 28AA of the Income Tax Rules. He has referred to the said Rule, and the relevant part thereof reads as follows: 28AA . (1) Where the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... between the petitioner and Air India Limited is a separate and independent transaction with which CAT-9 has no concern, and similarly, the petitioner has no concern with the transaction between CAT-9 and Interglobe. 14. Mr. Jolly submits that the petitioner undertakes to file his return for the Assessment Year in question and also to pay the taxes, and other liabilities towards interest, or penalty, if any, under the Act in accordance with law, as and when determined. 15. On the other hand, Mr. Agarwal has sought to urge that reliance placed by Mr. Jolly on the aforesaid clauses of the Ireland Double Taxation Avoidance Agreement is misplaced. He submits that there are two kinds of transactions. The first is a finance transaction, which is in the nature of hire purchase. In respect of such transactions, the interest element which the foreign company derives, is taxable in India. The other kind of transactions is operating lease which are pure and simple hire agreements. Whereas in the first category, the asset on the completion of the hire purchase tenure, vests with the hiree/ lessee; in the second kind of transaction, the interest in the asset remains with the hirer/ les ..... X X X X Extracts X X X X X X X X Extracts X X X X
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