Celestial Aviation Trading 64 Ltd v. ITO (IT) (2022) 285 Taxman 43/ 209 DTR 377/ 324 CTR 567 (Delhi) (HC)

S. 197 : Deduction at source-Certificate for lower rate-Shipping, inland waterways transport and air transport-Nil rate of with holding tax certificate-DTAA-India-Ireland. [S. 9(1)(i), Art. 8]

Assessee made application under section 197 for ‘Nil’ rate of withholding tax certificate on premise that under article 8 of India-Ireland Double Taxation Avoidance Agreement, it was liable to pay tax only in Ireland.ITO held that  in case of another group company, which was engaged in similar transaction, there was evasion of tax, and, consequently, he denied ‘Nil’ rate of tax deduction certificate to assessee. On writ  the Court held that aspects which Assessing Officer was obliged to took into consideration, while considering an application under section 197 had not at all been adverted to. Matter was to be remanded back to Assessing Officer. (AY.  2019-20)

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