The Bombay High Court set aside the respondent authority’s order rejecting the application of the petitioner for issuance of a certificate.
The petitioner, Vijaykumar Satramdas Lakhani is a partner in M/s. Lakhani Realty LLP. During the previous year 2019-2020 corresponding to the assessment year 2020-2021 petitioner earned salary income from the limited liability partnership on which there is tax deduction at source (TDS).
The petitioner incurred loss under the head ‘income from house property’. It is stated that the petitioner had earned interest income from M/s. Lakhani Builders Private Limited besides other interest income. It is further stated that the petitioner had also paid interest amounting.
The petitioner filed an application in Form No.13 requesting respondent authority to issue a certificate for non-deduction of tax under section 197 of the Act on interest income received from M/s. Lakhani Builders Private Limited.
In the meanwhile, because of the outbreak of the COVID-19 pandemic, the Government of India declared a lockdown in the country and as per the central government order and the state government notification imposing lockdown, any person found violating lockdown measures was liable to be proceeded against under the Disaster Management Act, 2005 besides various penal provisions of the Indian Penal Code.
The CBDT issued an order under section 119 o as per which in the case of pending applications for lower or nil rate of deduction of TDS under sections 195 and 197 of the Act or applications filed by buyers/licensees/lessees under section 206-C(9) of the Act, the applicant shall intimate through email the concerned assessing officer about the pendency of such application for the financial year 2019-2020 thereafter the assessing officer shall dispose of the application by April 27, 2020 and communicate the decision to the applicant regarding issuance/rejection of certificate vide email.
However, respondent authority contended that in terms of the order passed by the CBDT, the time limit for approving or rejecting such application which was till March 31, 2020, was extended till 27, April 2020. Since the petitioner failed to avail the benefit of the extended period till April 27, 2020, the application of the petitioner became barred by limitation.
The petitioner contended that when the Ordinance had extended all limitations across the board till June 30, 2020, there could not have been any justifiable reason for respondent authority to curtail the extension of the limitation period only till April 27, 2020.
The division bench consisting of Justice Abhay Ahuja and Justice Ujjal Bhuyan set aside the decision of the respondent authority to reject the application of the petitioner and remand the matter back to the respondent authority for taking a fresh decision on the application of the petitioner for issuance of a certificate under subsection (1) of section 197 of the Act for the assessment year 2020-21 on merit and in accordance with law within a period of 6 weeks.