Delhi High Court
Manpowergroup Services India ... vs Commissioner Of Income Tax ... on 24 July, 2020
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P. (C) 4511/2020 & CM APPL.16244/2020
MANPOWERGROUP SERVICES INDIA PVT. LTD. ..... Petitioner
Through: Mr. Piyush Kaushik, Advocate
versus
COMMISSIONER OF INCOME TAX (TDS)-1
NEW DELHI & ANR. ...... Respondents
Through: Ms. Lakshmi Gurung and Mr. Talha
Abdul Rahman, Advocates
% Date of Decision: 24th July, 2020
CORAM:
HON'BLE MR. JUSTICE MANMOHAN
HON'BLE MR. JUSTICE SANJEEV NARULA
JUDGMENT
MANMOHAN, J: (Oral)
1. The petition has been listed before this Bench by the Registry in view
of the urgency expressed therein. The same has been heard by way of video
conferencing.
2. Present writ petition has been filed challenging the order dated 29 th
June, 2020 passed by respondent No.2 under Section 197 of the Income Tax
Act refusing to grant a certificate of deduction of tax at source at NIL rate,
on payments to the petitioner company by its customers.
3. Learned counsel for petitioner contends that the impugned order is
contrary to the rule of consistency as the 1.50% rate with respect to payment
under Section 194J and 194I of the Income Tax Act, 1961, specified in the
impugned order is three times higher than the 0.50% rate of tax deduction at
source determined in the immediately preceding year by the respondent
itself.
4. He submits that the impugned order is a non-speaking and non-
reasoned order passed without dealing with the justifications and workings
submitted by the petitioner. He states that the petitioner company has been
operating on a low profit margin ranging from 0.26% to 1.78% over the past
six years and the tax payable on assessed income of the preceding four years
itself comes at a very low figure of 0.18%. He further states that the ratio of
tax withholding to profits has been as high as 1758% in the recent past.
5. Issue notice.
6. Ms. Lakshmi Gurung, learned counsel accepts notice on behalf of the
respondents. She states that the respondents while issuing the impugned
certificate has placed detailed reasons on record. She further states that the
petitioner had in its own application for grant of certificate of deduction of
tax at source at NIL rate under Section 197 of the Income Tax Act, 1961 had
mentioned the applicable rates as 2% and/or 10% during Financial Year
2020-21. She also states that the projected gross receipts during this
Financial Year 2020-21 is projected to be 78% more than the preceding year
according to the petitioner itself.
7. Since detailed reasons are stated to be available on record, the present
writ petition and the pending application are disposed of with a direction to
the respondents to furnish a copy of the reasons to the petitioner within a
week.
8. In the event the petitioner is aggrieved by the said reasoned order, it
shall be open to the petitioner to file appropriate legal proceedings in
accordance with law. It is clarified that all the rights and contentions of the
parties are left open.
9. The order be uploaded on the website forthwith. Copy of the order be
also forwarded to the learned counsel through e-mail.
MANMOHAN, J
SANJEEV NARULA, J
JULY 24, 2020
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