To,
All Chief Commissioners & Directors Generals of Income Tax,
All Commissioners of Income Tax (TDS),
Director of Income Tax (TDS).
Certificate of lower deduction or non-deduction of tax at
source under Section 197 of Income-tax Act — matter reg.
I am directed to bring to your notice on the subject of
issue of certificates under Section 197. Instruction No. 8/2006, dated
13-10-2006, was issued stating that certificates for lower deduction or nil
deduction of TDS u/s.197 are not to be issued indiscriminately and for issue
of each certificate, approval of the JCI/Addl. CIT concerned need to be taken
by the Assessing Officer (AO). Further, a letter of even number dated
16-10-2008 was issued stating that power of issue of certificates under
Section 197 would ordinarily be exercised by the officers manning TDS
Administration. However, instances are being brought to the notice of Board
that the AOs are issuing certificates for lower or non-deduction of tax at
source u/s.197 indiscriminately, in contravention of relevant Income-tax Rules
and Instructions.
I am, therefore, directed to communicate to you that
further to the contents of Instruction No. 8/2006, prior administrative
approval of the Commissioner of Income-tax (TDS) shall be taken (where the
cumulative amount of tax foregone by non-deduction/lesser rate of deduction of
tax arising out of certificate under Section 197 during a financial year for a
particular assessee exceeds Rs.50 lakh in Delhi, Mumbai, Chennai, Kolkata,
Bangalore, Hyderabad, Ahmedabad and Pune stations and Rs.10 lakh for other
stations. Once the CIT (TDS) gives administrative approval of the above, a
copy of it has to be endorsed invariably to the jurisdictional CIT also.
The content of the above instruction may be brought to the
notice of all officers working in your charge for strict compliance.
Sd/-
(Ansuman Pattnaik)
Director (Budget)
