SRI RAJAGOPALAN VENKATARAMAN vs. THE COMMISSIONER OF INCOME TAX

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WP/17848/2022HC KarnatakaKAHC01041008202229 September 2022Bench: S.R.KRISHNA KUMAR5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the rejection order was non-speaking, cryptic, and passed without application of mind, violating principles of natural justice. Consequently, the order was quashed.

What were the facts?

The petitioner applied for a NIL rate of TDS under Section 197 of the Income Tax Act. This application was rejected by the respondent without providing any reasons or a speaking order.

What were the issues?

Whether the rejection of an application for NIL TDS rate without providing reasons violates principles of natural justice.

Which sections of the Income-tax Act were involved?

Section 197

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF KARNATAKA, BENGALURU

DATED THIS THE 29TH DAY OF SEPTEMBER, 2022

BEFORE

THE HON'BLE MR.JUSTICE S.R.KRISHNA KUMAR

WRIT PETITION No.17848 OF 2022(T-IT)

BETWEEN:

SRI. RAJAGOPALAN VENKATARAMAN, REPRESENTED BY HIS PWER OF ATTORNEY HOLDER, MR. PHALGUNA B.N. S/O SRI. NANJUNDESHWARA B.N., AGED ABOUT 38 YEARS, RESIDING AT #16/1, 1ST FLOOR, BANASHANKRI II STAGE, BENGALURU- 560 070. …PETITIONER (BY SRI. ANNAMALAI.S, ADVOCATE)

AND:

1.

THE COMMISSIONER OF INCOME TAX,

RANGE(INTERNATIONAL TAXATION),

BMTC BUILDING, 80 FEET ROAD,

6TH BLOCK, NEAR KHB GAMES VILLAGE,

KORMANGALA, BENGALURU- 560095.

2.

THE DEPUTY COMMISSIONER OF INCOME TAX,

CIRCLE-1(1) (INTERNATIONAL TAXATION).

BMTC BUILDING, 80 FEET ROAD,

6TH BLOCK, NEAR KHB GAMES VILLAGE,

KORMANGALA, BENGALURU – 560095.

…RESPONDENTS (BY SRI. M.DILIP, ADVOCATE FOR., SRI.K.S. ARAVIND, ADVOCATE)

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER REJECTING THE APPLICATION MADE FOR NIL RATE OF TDS AS PER THE PROVISIONS OF SECTION 197 OF THE ACT REVISED VIDE EMAIL DATED 28.02.2022 ALONG WITH SCREENSHOT OF THE TRACES PORTAL EVIDENCING REJECTION OF APPLICATION, PASSED BY THE R2 FOR THE FINANCIAL YEAR 2021-2022 RELEVANT TO ASSESSMENT YEAR 2022-23 HEREIN MARKED AS ANNEXURE-A AND ETC.

THIS W.P. COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:-

ORDER

In this petition, the petitioner has sought for the following reliefs: a. Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the order rejecting the application made for NIL rate of TDS as per the provisions of section 197 of the Act received vide email dated 28.02.2022 along with screenshot of the TRACES portal evidencing rejection of application, passed by the Respondent No.2 for the Financial Year 2021-22 relevant to Assessment Year 2022-23 herein marked as ANNEXURE-A. b. Issue a writ of mandamus or direction in the nature of a writ of mandamus directing the Respondent No.1 and Respondent No.2 to pass a fresh speaking order in respect of the application made for NIL rate of TDS as per the provisions of Section 197 of the Act vide dated 14.12.2021 for the Financial Year relevant to Assessment year 2022-23. c. Issue a writ of Mandamus or direction in the nature of a writ of Mandamus directing the Respondent No.1 and Respondent No.2 to furnish the reasons for rejection of the application filed for NIL rate of TDS vide Form 13

3 dated 14/12/2021 under Section 197 of the Act for the assessment year 2022-23. d. And pass such other orders as this Hon’ble Court deems fit and proper in the interest of justice and equity.

2.

Heard learned counsel for the petitioner, learned counsel for the respondents and perused the material on record.

3.

The material on record discloses that the application submitted by the petitioner seeking NIL TDS in terms of Section 197 of the Income Tax Act, 1961 (for short “the I.T. Act”) has been rejected by the respondents by addressing a communication in this regard at Annexure-A dated 28.02.2022. It is the grievance of the petitioner that no separate order, much less any speaking order has been passed by the respondents and the attachment to the aforesaid communication only indicates that the claim of the petitioner has been summarily rejected and the same being violative of principles of natural justice, the petitioner is before this Court by way of the present petition.

4.

Per contra, learned counsel for the respondents submits that there is no merit in the petition and the same is liable to be dismissed.

5.

As rightly contended by learned counsel for the petitioner, the material on record discloses that except the impugned communication at Annexure-A dated 28.02.2022 enclosing a copy of the attachment, which discloses that the claim of the petitioner has been summarily and unilaterally rejected by the Assessing Officer without assigning any reasons, the impugned communication and order are clearly non-speaking, cryptic, unreasoned and laconic and passed without application of mind and in violation of principles of natural justice and consequently, the same deserves to be quashed and the matter be remitted back to the concerned respondent for reconsideration afresh in accordance with law.

6.

In the result, I pass the following: ORDER (i) The petition is hereby allowed.

5 (ii) The impugned order dated 28.02.2022 and the impugned communication/e-mail along with the accompanying screen shot dated 28.02.2022 is hereby set aside. (iii) The matter is remitted back to respondent No.2 for reconsideration afresh after providing an opportunity to the petitioner to file additional pleadings documents etc., and shall also provide an opportunity of personal hearing to the petitioner, in accordance with law.

Sd/- JUDGE

Bmc

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