Infrastructure Development Authority Vs ACIT (Patna High Court)
In the case of Infrastructure Development Authority Vs ACIT, the Patna High Court addressed the rejection of applications filed for Income Tax deduction at lower rate under Section 197 of the Income Tax Act, 1961. The petitioner sought a NIL TDS deduction on interest income, arguing that their total income justified this benefit. The Assessing Officer (AO) rejected the applications based on an outstanding tax demand for the Assessment Year 2018-19, which was stayed by the Principal Commissioner until the First Appeal was resolved. The High Court found that the AO’s power under Section 197 should be focused on the total income of the applicant for the specific assessment year, not on pending demands or extraneous factors. The court ruled that the rejection of the applications based on these considerations was incorrect and set aside the orders. The case was remanded for reconsideration in line with the court’s interpretation, clarifying that an AO cannot summarily reject such applications solely due to pending tax demands.
FULL TEXT OF THE JUDGMENT/ORDER OF PATNA HIGH COURT
The writ petition is filed against Annexures-P/1 and P/2 orders, which resulted in rejection of applications filed under Section 197 of the Income Tax Act, 1961. The orders are dated 14.05.2023 and 30.01.2024 respectively and relate to the same issue.
