Facts of the Case

The petitioner, Alcatel Lucent International, filed an application dated 30 August 2021 under Section 197 of the Income Tax Act for issuance of a certificate authorizing lower or nil deduction of tax for Assessment Year 2022–23, covering the period from 1 October 2021 to 31 March 2022.

Despite the statutory framework and administrative instructions prescribing timelines, the respondent authority failed to dispose of the application for more than three months. This delay prompted the petitioner to approach the Delhi High Court seeking judicial intervention for timely disposal of its application.

Issues Involved

  1. Whether the inaction of the Income Tax Department in not disposing of a Section 197 application within a reasonable time violates CBDT instructions and administrative guidelines.
  2. Whether the High Court can issue directions for time-bound disposal of such applications.

Petitioner’s Arguments

  • The petitioner contended that the application under Section 197 was duly filed on 30 August 2021.
  • It was argued that CBDT Instruction No. 01/2014 read with the Citizen’s Charter mandates disposal within one month.
  • The respondent’s failure to act within the prescribed time amounted to arbitrary and unreasonable delay.
  • The petitioner emphasized that the application ought to have been disposed of by 30 September 2021.

Respondent’s Arguments

  • The respondent, represented by counsel, accepted notice before the Court.
  • No detailed counter-arguments are recorded in the order, as the matter was disposed of at the admission stage.

Court’s Findings

  • The Court considered the submissions of both parties and acknowledged the delay in disposal of the application.
  • It recognized the necessity for administrative authorities to act within a reasonable time and in accordance with law.
  • Without entering into merits of the application, the Court focused on ensuring procedural compliance and timely adjudication.

Court Order / Directions

The Delhi High Court directed the respondent authority to:

  • Dispose of the petitioner’s application dated 30 August 2021 under Section 197
  • Pass a reasoned order in accordance with law
  • Complete the process within two weeks

Accordingly, the writ petition was disposed of.

Important Clarification

  • The Court did not adjudicate upon the merits of the Section 197 application.
  • The order is limited to ensuring procedural efficiency and adherence to timelines by tax authorities.
  • It reinforces that administrative delays contrary to CBDT instructions may invite judicial intervention.

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2021:DHC:4112-DB/MMH10122021CW140752021_145750.pdf

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