1179. Whether rule 29(2) bars assessee from making an application for a fresh certificate for succeeding period some time before expiry of earlier certificate granted under the section
1. Attention is invited to item 13 of the Minutes of the 3rd Meeting of the Direct Taxes Advisory Committee held on January 10, 1963, at New Delhi, forwarded under the Board’s Letter F. No. 4(130)-62/TPL, dated 30-1-1963.
2. The item under reference relates to the provisions of rule 29(2) of the Income-tax Rules, 1962, inter alia, provides that an application for a fresh certificate may be made if required, after the expiry of the period of validity of the earlier certificate. Regarding this it was pointed out at the 3rd Meeting of the Direct Taxes Advisory Committee that where there was a time-lag between the expiry of a certificate and the issue of a fresh certificate, tax might be deducted from the dividends received during the intervening period, which will cause inconvenience to assessees and, therefore, it was suggested that assessees might be allowed to apply for the issue of a fresh certificate before the expiry of the period of validity of the previous one. It was in this context that it was clarified before the Committee that sub-rule (2) of rule 29 of the Income-tax Rules, 1962 did not bar an assessee from making an application for a fresh certificate for the succeeding period some time before the expiry of the earlier certificate.
3. The Board desires that this clarification should be brought to the notice of the officers in your charge and that it should also be ensured that applications for the issue of fresh certificates are dealt with expeditiously.
Letter : F. No. 1(54)-63/TPL, dated 18-5-1963.
A number of cases have come to the notice of the Board where charitable trusts, whose income is exempt under section 11, are filing applications for refund every year to claim refund in respect of tax deducted at source under section 193 or section 195. The Board desires that in such cases the Income-tax Officers should be instructed to bring to the notice of the trusts the provisions of section 197 under which the trust can ask the Income-tax Officer to issue a certificate in its favour directing that either no tax should be deducted at source or the deduction should be made at a lower rate. These certificates should be promptly issued by the Income-tax Officers so that the trusts can collect their interest and dividend income without deduction of tax at source. The certificates issued by the Income-tax Officers can be reviewed by them once in three years.
Letter : F. No. 20/23/67-IT(A-I), dated 28-7-1967.
1181. Whether certificate issued under section 197(1) will be applicable only in respect of credit or payments, as the case may be, subject to tax deduction at source, made on or after date of such certificate
1. Section 197(1) of the Act envisages that, where tax is deductible at source in terms of sections 192, 193, 194, 194A, 194D, 194-I, 194K and 195 of the Income-tax Act, and the recipient justifies the deduction of tax at any lower rate or no deduction of tax to the satisfaction of the Assessing Officer, the Assessing Officer shall issue an appropriate certificate. It has come to the notice of the Board that in certain charges a practice has developed to issue certificates under section 197(1) of the Income-tax Act even after the credit or payment of amounts subject to tax deduction at source. This is not in accordance with the provisions of law.
2. It is, therefore, clarified that the certificate issued under section 197(1) of the Income-tax Act will be applicable only in respect of credit or payments, as the case may be, subject to tax deduction at source, made on or after the date of such certificate. Therefore, no certificate under section 197(1) of the Income-tax Act should be issued after the amounts subject to tax deduction at source stand credited or paid, whichever is earlier.
3. In other words, henceforth, application requesting for certificate under section 197(1) should not be acted upon if submitted after credit/payment of the amount subject to tax deduction at source. However, assessees having genuine hardship in submitting such applications on time may refer to the Board for condonation of delay in terms of section 119(2)(b) of the Income-tax Act.
Circular : No. 774, dated 17-3-1999.