The Delhi High Court directed the authority to issue Certificate for deduction at lower rates to British Airways.
The Petitioner, British Airways PLC is a foreign company, incorporated under the laws of the United Kingdom and resident of U.K. under the India-U.K. DTAA.
The petitioner sought the direction for issuance of a lower withholding certificate under Section 197(1) of the Income Tax Act, 1961, effective from 1st April, 2019 for Financial Year 2019-20.
The application made by the Petitioner remained pending till 3 June, 2019, on which date the AO issued certificates for 3 parties whose names were provided in the designated fields in the Form. Realizing that no certificate was issued for the remainder parties mentioned in the uploaded documents.
The counsel for the Petitioner, Mr. Vishal Kalra contended that Because of the delay in issuance of the certificates, Petitioner was suffering grave hardship and accordingly pursued the Respondents to issue a clarification that no TDS is required to be deducted from payments received for the period of 1st April, 2019 to 12th June, 2019.
The Petitioner has also asserted that it could not make an application for more than 3 TANs initially, and thereafter, when the system allowed for applying for 50 TANs, multiple applications could not be made.
The division bench consisting of Justice Manmohan and Justice Sanjeev Narula noted that the Petitioner was incapacitated from making applications as per the online format for all the parties for whom it wanted to have the withholding tax certificates issued.
The court while allowing the relief held that the only plausible reason the names could not be added in the designated fields, was the technical inadequacy of the system. That said, concededly, for the TANs in the said list, the Revenue subsequently has indeed issued certificates.
“Accordingly, it is declared that the withholding tax certificates issued by the respondents which are the subject matter of the present writ petition shall be effective from 1st April, 2019 for FY 2019-20. The interim orders are made absolute,” the court said.
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