TaxTMI 
TaxTMI 
2026 (3) TMI 961
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....e issued by the respondent no. 2 for three preceding FYs. BRIEF FACTS OF THE CASE 2. The petitioner is a company incorporated in India on April 13, 2000, under the Companies Act, 1956, and is engaged in the business of selling travel products and solutions. The petitioner owns a web-based travel services portal that can be accessed freely through the internet (through URL-www.makemytrip.com) and primarily focuses on promoting air tickets, hotel bookings and tours & packages about tourist destinations. The petitioner is regularly assessed to tax by the Deputy Commissioner of Income Tax, Circle 16(1), Delhi, for more than a decade in respect of its Permanent Account Number (PAN) - AADCM5146R, and by the Assistant Commissioner of Income Tax, Circle-75(1), Delhi-respondent no. 1 in relation to its Tax Deduction and Collection Account Number (TAN) - DELM09144C. 3. The petitioner has been filing applications for NIL Withholding Tax Certificate and the respondent no. 1 has been issuing such certificates for years, directing TDS to be deducted at a lower rate, as under:- Date of Certificate A.Y. Rate of Withholding tax 01.06.2024 2025-26 0.30% 09.06.2023 20....
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....tical circumstances of continuous business losses, the respondent no. 1 had issued certificates for three preceding F.Y.s at the rate of 0.30%. In the absence of any change in the facts and circumstances of the case, the respondents could not have taken a contrary view from that of the three immediately preceding FYs. It is also the case of the petitioner that, in view of the substantial tax losses brought forward from the past AYs available for set-off, the total taxable business income for the year under consideration, i.e., FY 2025-26 shall be 'NIL', which was identical to the financial position of the petitioner in the earlier FYs. 10. It is the case of the petitioner that in the demand appearing on the TAN of the petitioner, a substantial portion aggregating to Rs.23,50,21,249/- pertains to previous 4 AYs and these demands pertain to similar issues and were raised on account of alleged short deduction of tax at source on payments made to; (a) Google India for online advertisement; (b) Khajrana and other parties for Common Area Maintenance Charges; and (c) HP India for Annual Maintenance Charges (only for AYs 2018-19 and 2019-20). Against these dem....
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....ndency of the appeal, the petitioner filed rectification applications under Section 154 of the Act as well as applications seeking stay of recovery of demand, which are pending consideration. 15. He submitted that the said demands are not sustainable, as the basis adopted by respondent no. 1 during the verification proceedings under Section 201 of the Act is fundamentally flawed. The respondent no. 1 has raised these demands by placing reliance on the decision in Google India (P) Ltd. v. Joint Director of Income-tax (International Taxation), (2018) 194 TTJ 385 by the Bangalore Bench of the Tribunal. However, the said decision has been overturned by the Karnataka High Court in the case of Google India (P.) Ltd. v. Commissioner of Income-tax, International Taxation, Bengaluru, (2021) 435 ITR 284 (Karnataka). In support of his submission, Mr. Kapoor has relied upon the following judgments:- i) Sultan Leather Finishers (P.) Ltd. v. Assistant Commissioner of Income-Tax, [1991] 191 ITR 179 (All.); ii) Mathew Scaria v. Deputy Commissioner of State Tax & Ors, [WP(C) No. 33099 Of 2023] (Kerala High Court); iii) Purnima Das v. Union of India, [2010] 329 ITR 278 ....
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....mpugned order) without any reasoning, application of mind or justification for departing from the long-standing consistent view adopted by the respondents. He also submitted that, any deviation from a settled and consistently applied position, without any change in facts, law, or revenue exposure, directly contravenes the mandate of the Supreme Court in Maruti Suzuki (supra) and South Indian Bank (supra). 20. Mr. Kapoor submitted that outstanding demand is not a valid ground for rejecting an application under Section 197 of the Act. He submitted that the Bombay High Court in Tata Teleservices (Maharashtra) Ltd. v. DCIT (TDS), [2018] 402 ITR 384 (Bom), has held that: "Neither Section I97 of the Act nor Rule 28AA provides that no certificate of nil/lower rate of withholding tax can be granted if any demand, howsoever minuscule, is outstanding. The authority is required to determine the existing/estimated liability by considering all aspects, including the estimated tax payable for the relevant year and the existing liability. This necessarily includes taking into account demands likely to be upheld in appellate proceedings." 21. In support of this proposition of law, h....
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.... neither final nor crystallised. In such circumstances, there exists no confirmed or enforceable liability that could constitute a legitimate basis to deny the petitioner's equitable relief under Section 197 of the Act. On the contrary, the petitioner has already filed detailed rectification and stay applications in respect of the purported demands. He also submitted that the petitioner has undertaken a comprehensive reconciliation of its outstanding demand and refund is due as on 07.10.2025. This reconciliation demonstrates that, after giving effect to the above rectification orders, the total outstanding demand now appearing in the system of the Revenue aggregates to Rs.14,08,03,300/-, most of which has been incorrectly appearing against the petitioner and relates to AYs, which are pending rectification, appeal, or in stay proceedings. 27. He submitted that, without prejudice, the petitioner has voluntarily offered that, if so directed, the Revenue may adjust 20% of the reduced disputed demand against the pending refunds of Rs. 84.10 crores, which are due to the petitioner and continued to remain pending for release. These refunds arise pursuant to various assessment and recti....
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....nt Commissioner of Income Tax, Circle 75(1), Delhi. The respondent no. 1 has been consistently exercising jurisdiction over the petitioner for several years and even after filing of the present petition, respondent no. 1 is exercising the authority for all relevant purposes, including issuance of lower deduction certificates and the rectification orders, for the preceding AYs. 32. He submitted that, for several years, the petitioner has filed multiple tax and non-tax writ petitions before this Court, all of which have been entertained and adjudicated without jurisdictional objection, including M/s Make My Trip India Pvt. Ltd. v. Deputy Commissioner of Income-tax, Circle 16-1 & Anr., W.P.(C) 5168/2021. In addition, income tax appeals filed by the Revenue itself in respect of the petitioner have been adjudicated by this Court in Pr. CIT-6 v. Make My Trip India Pvt. Ltd. (2019) (Del HC) - ITA 136/2019. He submitted that the respondents cannot now selectively dispute the jurisdiction of this Court while having repeatedly invoked and accepted the same forum in earlier proceedings. 33. He submitted that the argument of the Revenue would lead to an untenable and jurisdictionally fra....
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.... relied upon the following judgments:- i) SFDC Ireland Ltd. v. CIT, [2024] 465 /TR 471 (Del.); ii) Serco BPO (P.) Ltd. v. ACIT, [2012] 25 taxmann.com 4 (P&H) 37. On the issue of the Revenue's reliance on the judgment of this Court in National Petroleum Construction Co. v. DCIT, (421 ITR 24), Mr. Kapoor submitted that the said judgment was in the context of 'Permanent Establishment' (PE) determination, where this Court found that the assessee had taken inconsistent positions in earlier proceedings and before arbitration tribunals, resulting in highly fact-specific observations that turned exclusively upon the assessee's contradictory stand. When carried in an appeal (Civil Appeal no. 4964 of 2022), the Supreme Court delivered two separate and conflicting opinions and the Supreme Court expressly directed that the matter to be placed before a larger Bench. Moreover, in that case, the High Court was confronted with questions relating to- (i) PE attribution, (ii) characterization of income, (iii) inconsistent stand by the assessee, and (iv) re-appreciation of treaty provisions, all of which required a fact intensive evalua....
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....ts claim, no documentary evidence was provided by the petitioner. The petitioner simply uploaded the response against the demand on e-filing portal wherein it had disagreed with outstanding demands. 44. He submitted that, as per Annexure 12 submitted by the petitioner, the demand of Rs. 71,58,029/-for AY 2018 -19 and Rs. 3,71,098/- for AY 2019-20 were correct and collectible in nature. Against the demand of Rs. 56,33,776/- for AY 2021-22, the petitioner submitted that the demand was raised against the penalty order under Section 271 G of the Act dated 23.04.2024 for AY 2021-22, which is pending before the CIT(A) for adjudication and no stay has been granted by the Appellate Authority. Therefore, as per Section 226 of the Act, the said demand is collective in nature. Apart from the said demand, there is an outstanding demand of Rs.5,91,27,449/- against the PAN, which is collectible in nature, on response submitted by the AO. As substantial outstanding demands exist against the petitioner's PAN and associated TANs, which have been duly verified by the Jurisdictional Assessing Officer, it is found to be correct and collectible. 45. He clarified that, on 22.08.2025, rectification....
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....e of the Jurisdictional Assessing Officer as such and the petition ought to be dismissed at the threshold on grounds of maintainability for want of territorial jurisdiction. 50. Mr. Sinha places reliance on the decision of this Court in SIS Live v. ITO, (2011) 333 ITR 13, to contend that the submission of the petitioner that the jurisdiction rests with this Court by relying upon the judgment of Manpowergroup Services India Pvt. Ltd (supra), is erroneous as the said judgment is based on a different set of facts. Therein, this Court was dealing with the grant of certificate under Section 197 of the Act, at a rate higher than the rate requested by the assessee. Since, the revenue foregone was more than the rate permissible by the Range Head, the approval was taken from the Commissioner as per the CBDT Instruction no. 08/2018. Further, this Court observed that the Commissioner of Income Tax can entertain a revision petition under Section 264 of the Act only when the order, which is the subject matter of revision, is passed by an authority subordinate to him. In the present case, there is an upfront rejection of the application. In such a scenario, it is apparent that there was no re....
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....ryana)[20-07-2023], OPJ Trading (P.) Ltd. v. Income-tax Officer, TDS-2, [2018] 98 taxmann.com 117 (Gujarat) [11-09-2018] and CIT v. Chhabil Dass Agarwal, (2014) 1 SCC 603. 54. He submitted that, it is a settled principle that Section 197 of the Act does not determine assessable income or final tax liability. Such a determination is statutorily reserved for regular assessment proceedings, followed by appellate remedies and drawn towards the provisions of Section 190 of the Act. It is a settled principle of law that, Section 197 of the Act certification is purely interim and provisional in nature, based on current demand and revenue sensitivity considerations, and does not create a vested or enforceable right in favour of the Assessee, nor does past issuance of nil or lower deduction certificates bind the Revenue for subsequent years. The proceedings under Section 197 of the Act are interim and summary in nature; as such the petitioner's reliance on earlier years is misconceived, misleading and untenable. 55. Mr. Sinha submitted that, Section 197 of the Act read with Rule 28AA of the Rules, expressly requires that, while considering an application for a lower or nil deducti....
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....w as under: "I am directed to bring to your notice on the subject of issue of certificates under section 197. Instruction no. 8/2006, dated 13-10-2006, was issued stating that 197 certificates for lower deduction or nil deduction of TDS under section 197 are not to be issued indiscriminately and for issue of each certificate, approval of the JCI/Addl. CIT concerned need to be taken by the Assessing Officer (AO). Further, a letter of even number dated 6-10-2008 was issued stating that power of issue of certificates under section 197 would ordinarily be exercised by the officers manning TDS Administration. However, instances are being brought to the notice of Board that the Assessing Officers are issuing certificates for lower or non-deduction of tax at source under section 197 indiscriminately, in contravention of relevant Income-tax Rules and Instructions. I am, therefore, directed to communicate to you that further to the contents of Instruction no. 8/2006, prior administrative approval of the Commissioner of Income-tax (TDS) shall be taken (where the cumulative amount of tax foregone by non-deduction/lesser rate of deduction of tax arising out of certificate und....
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....tutory interest. 61. He submitted that doctrine of res judicata does not strictly apply to interim / provisional certificate issued under Section 197 of the Act, as held by the Bombay High Court in Messrs H.A. Shah & Co. v. Commr. of Income-Tax and Excess Profits Tax, Bombay City, (1956) 30 ITR 618. He also stated that, a similar view was taken by the Constitution Bench of the Supreme Court in Instalment Supply (P) Ltd. v. Union of India, 1961 SCC OnLine SC 185. Therefore, the general rule is that this doctrine is inapplicable for tax matters as the findings/opinions recorded by either an assessing or adjudicating authority have no binding effect on the same issue in subsequent years 62. In support of his submission on the non-applicability of doctrine of res-judicate and estoppel, he has relied upon Amalgamated Coalfields Ltd. v. Janapada Sabha, 1962 SCC OnLine SC 72 and Distributors (Baroda) (P) Ltd. v. Union of India, (1986) 1 SCC 43. 63. He seeks dismissal of the present petition with exemplary costs. ANALYSIS AND CONCLUSION 64. Having heard the learned counsel for the parties and perused the record, at the outset, we intend to deal with the submission of Mr. Sin....
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....ffice of TDS circle 75(1), Delhi - Aayakar Bhawan, District Centre, Laxmi Nagar, Delhi - 110092. 68. Having said that the submission of Mr. Kapoor is primarily that for several years the petitioner has filed multiple tax and non-tax writ petitions before this Court, all of which have been entertained and adjudicated without jurisdictional objection including Make My Trip (India) Pvt. Ltd. (supra). That apart, we find that the orders under Sections 154/201(1)/201(1A) for the AYs 2018-19 and 2019-20 dated 22.08.2025 have been passed from the aforesaid Circle 75(1), Laxmi Nagar, New Delhi, to which a reference has been made by the respondents in support of their submission that recovery that has to be effected by the Revenue from the petitioner. 69. Suffice to state, except the impugned order which also is addressed to the office of the petitioner in Delhi, the orders issuing the certificates under Section 197 of the Act and the order dated 22.08.2025 under Section 154/201(l)/201(1A) of the Act, were issued by Circle 75(1), Laxmi Nagar, New Delhi. So, in view of the aforesaid position, in the peculiar facts of this case, we are not inclined to reject the petition on this ground ....
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....3 6,96,53,092 Pursuant to order dated March 31, 2024. u/s 143(3). Rectification filed for loss set off. Pending with AO. 2021-22 10,96,58,323 Pursuant to order (dated February 6, 2024) u/s 143(3). Partial refund received. Letters filed for balance refund, pending with AO. 2020-21 1,77,19,913 Pursuant to order (dated January 17, 2023) u/s 154. Interest u/s 244A short granted. Rectification pending with AO for disposal. 2018-19 6,75,53,521 Pursuant to order (dated May 26, 2021), u/s 143(3). Interest u/s 244A short granted. Rectification pending for disposal till date. 2016-17 56,91,101 Pursuant to order dated December 26, 2019, u/s 143(3). Interest u/s 244A short granted. Refund of Rs. 3,57,72,632 received. Part refund of Rs. 56,91,101, yet to be received. 84,10,73,810 AS PER THE REVENUE (in terms of the table given by the petitioner) AY Demand raised against Original outstanding demand Demand outstanding as of the date 2018-19 PAN 71,57,049 71,57,049 2019-20 PAN 3,71,098 3,71,098 2021-22 PAN 56,33,776 46,69,960 vide rectification order dated May 22, 2024) 2013-14 ....
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....ed to 14,08,03,300/- which aspect has not been considered by the AO. It is necessary to state here that a reference to Rs. 5,91,27,449/-, has been made by the respondents but the quantification and the basis of the said amount has not been given. 77. Suffice to state that, in the past, withholding certificates were issued at rates between 0.10% to 4% and the rejection of application has the effect of deducting normal rate of tax at source, which is clearly untenable, particularly when no reasons have been given in the impugned order for rejecting the application for NIL withholding certificate, moreso, when an alternative prayer in the application for deduction of tax at the rate as granted by the Revenue in the preceding year, i.e. FY 2024-25 vide the certificate dated 01.06.2024 i.e., at 0.30% was sought. 78. This Court in Virgin Atlantic Airways Ltd. v. PCIT, W.P.(C) 5978/2021 dated 29.07.2021, has observed that:- "11. We have considered the submissions made by the learned counsel for the parties. The impugned "speaking order" has been reproduced hereinabove. Apart from stating that the petitioner may have other sources of income, the impugned order does not refle....
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....tion. In the said case it was not pleaded by the petitioner that there was violation of principles of natural justice while passing the impugned order or there was a lack of jurisdiction or procedure required for the decision. In the case in hand, the impugned order is a non-speaking order and it is the case of the petitioner that such an order violates its principles of natural justice. iii. In Areva T&D, SA (supra), the issue was with regard to non-filing of return. The Court held that on a conjoint reading of Sections 195 and 197 it is clear that any opinion expressed at the time of grant of certificate, is tentative or provisional or interim in nature and the same would not debar the Assessing Officer from initiating proceedings under Section 147 on the ground that there has been a change of opinion. Therefore, the contentions of the assessee were to be rejected. The said case is distinguishable on facts. iv. In Ansaldo Engergia SpA (supra), the certificate under Section 197 read with Section 44BBB of the Act was cancelled. The Court held that even if a certificate for deduction at source at a lower rate was withdrawn, the consequence of such a withdr....