Assessee-company, engaged in selling travel products through an online portal, had regularly obtained certificates under section 197 permitting deduction of tax at lower rates ranging from 0.10 per cent to 4 per cent, including 0.30 per cent for three immediately preceding years. For the relevant year, the assessee applied for a nil withholding certificate or, alternatively, deduction at 0.30 per cent on the ground that substantial brought forward losses and unabsorbed depreciation were available for set-off and taxable income would be nil. In response to departmental queries, assessee explained that the demand of ₹1.51 crores reflected against PAN was pending rectification/appeal, and TAN demand of ₹11,660 arose due to a technical error in TDS return filing. DCIT (TDS) rejected the application, stating that demand of ₹23.81 crores was pending against the assessee’s TAN and no stay had been granted. On writ, the Court held that in the past, lower withholding certificates had consistently been issued; the order assigned no reason except referring to outstanding demand; and clarifications had earlier been sought only regarding smaller demands; the cumulative demand relied upon in the rejection order was subsequently reduced to ₹14.08 crores by rectification orders. Court held that rejection of the application without examining statutory parameters under Rule 28AA and without assigning reasons was arbitrary and unsustainable. Accordingly, the  order was  set aside, and the matter was remanded to the Assessing Officer for passing a fresh reasoned and speaking order.(AY. 2026-27)