On writ the Court held that no adequate alternate remedy against rejection of application for nil deduction of tax deduction of tax at source. Writ petition is maintainable. Tax cannot be deducted at source under the Income-tax Act, 1961 if the payment does not constitute income and the power of the Revenue to direct deduction of tax under section 197 can be exercised only if there is an income chargeable to tax. Cost of acquisition of stock options cannot be determined Capital receipt not chargeable under section 45 hence not chargeable under any other head Charging section and computation section constituted an integrated code. Order rejecting the application was quashed and set aside. (AY.2024-25)
Manjeet Singh Chawla v. Dy. CIT (2025) 479 ITR 1 (Karn)(HC)
S. 197 : Deduction at source-Certificate for lower rate-Capital or revenue-Employee stock option-One-time compensation received for surrendering of stocks received under stock option scheme of employer-Stock option not perquisite-Order rejecting application quashed and set aside-Cost of acquisition of stock options cannot be determined Capital receipt not chargeable under section 45-Not chargeable under any other head Charging section and computation section constituted an integrated code-Application for nil deduction rejected by Principal Chief Commissioner-No adequate alternate remedy of appeal-Writ petition maintainable-Order rejecting the application was quashed and set aside. [S. 4, 5, 17(2),45, 48, Art.226]
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