Central Board of Direct Taxes to Review Practice of Issuing Certificates

The court emphasized the need for the Central Board of Direct Taxes to review the practice of issuing certificates under section 197(1) after interest is credited, and to provide appropriate guidelines for future cases. The petitioner's counsel acknowledged that interim relief had been granted, rendering the petition moot. As a result, the petition was disposed of, and the rule was discharged with no order as to costs.

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Issues:
Interim relief regarding the issuance of certificates under section 197(1) for non-deduction of tax at source.

Analysis:
The court heard arguments from both sides regarding the grievance of the petitioner, who highlighted the absence of a time-limit for applying for a certificate under section 197 and the issuance of such certificates even after the interest was credited. The Department contended that certificates were erroneously granted after the interest was credited, contrary to the provisions of the law. The Central Board of Direct Taxes clarified in a letter that certificates cannot be issued when applied for after the interest is credited, but the court noted that such responses were individual-specific and not a general guideline. The court emphasized the need for the Central Board of Direct Taxes to review the situation, determine the permissibility of the practice, and issue appropriate guidelines for future cases, considering the expectations of individuals who applied for certificates after the interest was credited, based on past practices.

The petitioner's counsel acknowledged that interim orders granted benefits to the petitioner, rendering the petition moot. Consequently, the petition was disposed of, and the rule was discharged with no order as to costs.

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