TaxTMI 
TaxTMI 
2012 (10) TMI 797
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....n deleting the demand raised by the A.O. u/s 201/201(1A) rws 194-I of the IT Act, holding that the certificate u/s 197 of the IT Act was valid for the F.Y. 2002-03 though the certificate was issued on 23.4.2002. 2. On the facts and in the circumstances of the case as well as in law, the Ld. CIT (A) -XVII, New Delhi has erred in not appreciating the fact that as per the provisions of section 194-I of the IT Act, tax is deductible at the time of credit of rental income or at the time of payment of rental income whichever is earlier and at that time no certificate u/s 197 of IT Act has been granted. 3. On the facts and in the circumstances of the case as well as in law, the Ld. CIT (A) -XVII, New Delhi h....
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....d. CIT (A) has further erred in failing to appreciate that as per the provisions of Section 194-I of the Act, tax is deductible either at the time of credit of the rental income, or at the time of payment thereof, whichever is earlier; the Ld. CIT (A) erred in not taking into consideration the fact that at that relevant time, the certificate u/s 197 of the Act had not been granted; that the Ld. CIT (A) has further erred in not taking into consideration the provisions of Section 197 (2) of the Act, as per which, the person responsible for paying the income shall deduct tax at the rates specified at the time of payment, or the rate specified in the certificate issued u/s 197 of the Act; and that therefore, the order passed by the Ld. CIT (A) ....
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....under consideration, since the tax stood duly paid by the deductee and the assessee company remained under no further obligation to pay tax as demanded; and that therefore, there being nothing wrong with the order passed by the Ld. CIT (A), the same is entitled to be confirmed on dismissal of the appeal filed by the department. 7. We have heard the parties and have perused the material on record. The assessee has also placed before us a calendar of events, which it would be appropriate to reproduce hereunder:- 01.04.2002 Application submitted by the payee M/s Nesco Ltd. u/s 197 of the IT Act to the ITO 01.04.2002 Date of payment of advance rent by the assessee to the payee M/s Nesco Ltd. of Rs.15 lacs (PB2) 23.04.2002 Grant of certif....
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.... "I hereby authorize M/s Indian Printing Packaging and Allied Machinery Manufacturers Association Plot no.54, Sector-62, Institutional Area, Noida-201307 to deduct tax at source @ 2% s.c. u/s 194-I of the Income Tax Act, 1961 from the license & maintenance fees/rent compensation payable by you to M/s Nesco Limited upto 31st March, 2003. This certificate shall remain in force until 31st March, 2003 unless it is cancelled by me under intimation to you before that date." 9. From the above contents of the certificate, it is quite clear that it was to remain in force till 31.03.2003, unless cancelled by the ITO prior to the said date. 10. It was in accordance with the authorization contained in the aforesaid cer....