| Case ID |
2c78ac4f-27ea-4acf-9ac7-92594af1ad7a |
| Body |
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| Case Number |
IT REFERENCE No. 70 OF 1976 |
| Decision Date |
May 23, 1984 |
| Hearing Date |
|
| Decision |
The Tribunal held that the Income Tax Officer (ITO) lacked jurisdiction to pass an order under section 195(2) as the application for tax clearance was not made under the relevant provision, rendering the order null and void. The case involved a dispute over payments made by the assessee-company to a foreign company for technical know-how and whether tax was deductible at the source. The court ruled that the ITO could not grant a tax clearance certificate and that the application made by the assessee was treated as one under section 195(2) despite the lack of a formal application. The decision emphasized the need for clarity in applications made under tax law and the jurisdictional limits of the ITO. |
| Summary |
In the case of Commissioner of Income Tax v. Jay Engg. Works Ltd., the Delhi High Court addressed the complexities surrounding tax deductions on payments made to non-residents under the Income-tax Act, 1961. The central issue revolved around an agreement between Jay Engg. Works Ltd. and an Italian company for the provision of technical know-how. The assessee sought a tax clearance certificate from the Income Tax Officer, arguing that no tax was deductible from the payments. However, the ITO determined that a portion of the payments was taxable, leading to appeals and a reference to the High Court. The court's ruling clarified the jurisdictional authority of the ITO regarding applications under section 195(2), highlighting the necessity for proper applications when dealing with non-resident payments. This case is significant for its implications on international taxation and the procedural requirements for tax clearance in India. |
| Court |
Delhi High Court
|
| Entities Involved |
Jay Engg. Works Ltd.,
Italian Company
|
| Judges |
D.K. Kapur,
D.P. Wadhwa
|
| Lawyers |
K.K. Wadhera,
P.M. Misra,
G.C. Sharma,
Anoop Sharma
|
| Petitioners |
Commissioner of Income Tax
|
| Respondents |
Jay Engg. Works Ltd.
|
| Citations |
1984 SLD 739 = (1984) 149 ITR 425
|
| Other Citations |
Czechoslovak Ocean Shipping International Joint Stock Co. v. ITO [1971] 81 ITR 162 (Cal.)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
195(2)
|