The assessee, a Germany based company engaged in the business of international cargo handling and transportation of cargo through operation of aircraft in international traffic, claimed that its income was not chargeable to tax in India in terms of article 8 of the India-Germany DTAA and applied for a nil withholding tax certificate. The Assessing Officer, however, issued a certificate for withholding tax at 0.10 per cent. The High Court held that the assessee had been regularly filing returns and had been granted nil withholding tax certificates for more than a decade on identical facts, except for one year where ultimately nil certificate was also granted after remand. There was no change in the nature of services rendered and the Revenue had not controverted the assessee’s claim that the receipts were not chargeable to tax in India under article 8 of the DTAA. The Assessing Officer had also not assigned any cogent reason for permitting deduction at 0.10 per cent instead of nil rate. Accordingly, the impugned order could not be sustained. Considering that the financial year was to expire within a few days, the Court, instead of remanding the matter, directed issuance of certificate for nil withholding tax under section 197. However, it was clarified that issuance of such certificate would not preclude the Assessing Officer from examining in regular assessment proceedings whether the income/receipts were chargeable to tax in India, uninfluenced by the order. (AY. 2025-26)