The assessee, a UK company, provided routine management and administrative support services to its Indian subsidiary on a pure cost-to-cost basis and applied for a Nil Withholding Certificate under sections 197 and 195. The AO rejected the application and directed a tax deduction at 15% to safeguard revenue interests. The Court held that while deciding an application under section 197, the AO must consider the factors prescribed under Rule 28AA, including estimated tax liability, past tax records, existing liabilities, and advance tax payments. Since the order did not demonstrate consideration of these mandatory factors, it was invalid and was quashed. The matter was remanded to the AO for fresh consideration in accordance with Rule 28AA.<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 197: Deduction at source-Certificate for lower rate-Payment to Non-resident-Withholding Certificate-Rejection of a Nil Withholding Certificate is unsustainable where the AO fails to consider the statutory factors under section 197 before determining the withholding tax liability-Matter remanded-DTAA-India-UK.[S. 195, Rule 28AA, Art. 13, Art. 226] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[21],"tags":[],"class_list":["post-64446","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-gLs","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/64446","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=64446"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/64446\/revisions"}],"predecessor-version":[{"id":64447,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/64446\/revisions\/64447"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=64446"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=64446"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=64446"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}