1REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 4964 OF 2022 (ARISING OUT OF SLP (C) NO. 9233 OF 2020) NATIONAL PETROLEUM CONSTRUCTION COMPANY ....Appellant (s) versus DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2(2), INTERNATIONAL TAXATION, NEW DELHI & ANR. .…Respondent (s) J U D G M E N T Indira Banerjee, J. Leave granted. 2. This appeal is against the judgment and final order dated 20 th December 2019 passed by High Court of Delhi dismissing the Writ Petition being Writ Petition (C) No.8527 of 2019 filed by the Appellant against the refusal of the Respondent No.1 to modify the Certificate dated 26 th June 2019 issued to the Appellant for the Financial/Previous Year 2019-20, corresponding to the Assessment Year 2020-21, under Section 197 of the Income Tax Act 1961, hereinafter referred to as the 2 “IT Act”, for Tax Deduction at Source (TDS) at the rate of 4% in respect of payments received by the Appellant from Oil and Natural Gas Company Ltd. hereinafter referred to as the “ONGC” towards work done out of India as well as within India. 3. The Appellant, National Petroleum Construction Company, is a company incorporated under the laws of the United Arab Emirates (UAE) and is a tax resident of that country. The provisions of the Agreement for Avoidance of Double Taxation hereinafter referred to as the “AADT” between India and the UAE apply in determining the taxable income of the Appellant under the IT Act. 4. The Appellant is, inter alia , engaged in the fabrication of Petroleum Platforms, Pipelines and other equipment, installation of Petroleum Platforms, Submarine Pipelines, onshore and offshore oil facilities and coating of Pipelines. 5. Pursuant to different tender notices issued by ONGC from time to time, the Appellant submitted tenders, inter alia , for installation of Petroleum Platforms and submarine Pipelines. The tenders submitted by the Appellant were accepted and contracts were executed by and between the Appellant and ONGC. The first contract was executed by and between the Appellant and ONGC in the Financial Year 1996-97, corresponding to the Assessment Year 1997-98. 6. On 28 th August 2005, the Appellant was awarded a contract termed as Contract No. MR/OW/MM/NHBS4WPP for Well Platform Project- 3 II hereinafter referred to as ‘LEWPP Contract’ pursuant to a global tender floated by ONGC in July 2005. This was the third contract between the Appellant and ONGC. Later on 23 rd November 2006, the Appellant entered into another contract termed as Contract No. MR/OW/MM/C-Series/03/2006, hereinafter referred to as ‘C-Series Contract’, for C-Series Project. 7. The scope of work as described in the “General Conditions of Contract” for LEWPP Contract and C-Series Contract included “Surveys (pre-engineering, pre-construction/pre-installation and post-installation), Design, Engineering, Procurement, Fabrication, Anticorrosion & Weight coating (in case of rigid pipeline), Load-out, Tie-down/Sea fastening, Tow-out/Sail-out, Transportation, Installation, Hook-up, Installation of submarine pipelines, Installation and hook-up of submarine cables, Modifications on existing facilities, Testing, Pre-commissioning, Commissioning of entire facilities as described in the bidding document”. 8. The contracts referred to above included various activities. Whilst the activities relating to survey, installation and commissioning were done entirely in India, the platforms were designed, engineered and fabricated overseas - at Abu Dhabi. 9. The Appellant has been filing its Income Tax Returns from the Assessment Year 1997-98. The Appellant’s income has been computed on a presumptive basis by taxing the gross receipts pertaining to the 4 activities in India, less verifiable expenses at the rate of 10% and the receipts pertaining to activities out of India at the rate of 1%. 10. The Appellant adopted the said basis for computing its assessable income and filed its returns for the Assessment Year 1999-2000 onwards. Accordingly the returns filed by the Appellant for the Assessment Years 2004-05, 2005-06 and 2006-07 were processed under Section 143(1) of the IT Act. However, the returns filed by the Appellant for Assessment Years 2007-08 and 2008-09, were not accepted by the Assessing Officer, hereinafter referred to as the ‘AO’. 11. The AO passed a Draft Assessment Order dated 31 st December 2009 for the Assessment Year 2007-08 holding that the Appellant had a Fixed Place Permanent Establishment in India in the form of a Project Office at Mumbai. The AO further held that Arcadia Shipping Ltd. (ASL), agent of the Appellant had a Permanent Establishment in India, which constituted a Dependent Agent Permanent Establishment, hereinafter referred to as “DAPE”, of the Appellant. 12. With regard to the Appellant’s contention that the fabricated material was sold to ONGC outside India, the AO found that the contract was a turnkey and a composite contract and was not divisible as claimed by the Appellant. Accordingly, the AO held that the entire contractual receipts including the payments for activities performed outside India were taxable in India. The consideration received by the Appellant for design and engineering was held to be Fees for Technical 5 Services, hereinafter referred to as the 'FTS'. Since, the Appellant had not maintained separate books pertaining to the contract, the AO estimated the Appellant’s profit at 25% of the consideration received from ONGC. 13. The Appellant did not accept the Draft Assessment Order and filed its objections before the Dispute Resolution Panel hereinafter referred to as the “DRP”. The DRP held that Article 5 of the AADT provided an inclusive definition of ‘Permanent Establishment’ (PE) and that the Appellant’s Project Office constituted a PE of the Appellant in India. The DRP concurred with the AO that ASL was a DAPE of the Assessee. 14. The DRP observed that pre-engineering or pre- design survey, claimed to be done by a sub-contractor employed by the Appellant, was an integral part of the contract and the time spent by the sub- contractor would also constitute the time spent by the Appellant in India in computing residence in India for over nine months during the Assessment Year, in terms of the AADT. 15. The DRP rejected the contention that the contract was a divisible contract and the income of the Appellant for the activities done outside India was not taxable under the IT Act. 16 . The Appellant filed an appeal against the order of the assessment passed by the AO before the Income Tax Appellate Tribunal hereinafter referred to as the “ITAT”. The ITAT concurred with the AO and rejected the Appellant’s contention that it did not have a PE in India. The ITAT 6 also concurred with the AO that the establishment of ASL in India was a DAPE of the Appellant. 17. The ITAT, however, accepted the Appellant’s contention that the contract could be segregated into offshore and onshore activities and the Appellant’s income for the activities carried on out of India could not be attributed to its PE in India. 18. The ITAT rejected the Appellant’s contention that the tax payable should be computed as per the formula adopted in the preceding years, i.e. 10% of the receipts attributable to activities in India, less expenses in India and 1% of the receipts attributable to activities carried on overseas. 19. By a judgment and order dated 29 th January 2016, in the Appeal being ITA No. 143 of 2013, filed by the Appellant and other related Appeals filed by the Revenue, the Division Bench of the High Court of Delhi concurred with the view of the ITAT that consideration for activities carried on overseas could not be attributed to the Appellant’s PE in India. The Court observed that it was not disputed that invoices raised by the Appellant specifically indicated whether the work was done outside India or in India. Thus, even though the contracts might be turnkey contracts, the value of the work done outside India was segregable. 20. Two contracts were concluded by and between the Appellant and ONGC, one dated 30 th September 2016, hereinafter referred to as 7 LEWPP Contract, and the other dated 7 th February 2018, hereinafter referred to as the R-series Contract, which have led to this Appeal. The Appellant received payments for work done under the said two contracts in the Previous/Financial Year 2019-20 corresponding to the Assessment Year 2020-21. 21. By a judgment and order dated 9 th May 2017 in Writ Petition being Writ Petition (C) No. 2117 of 2017, the High Court of Delhi set aside a Certificate dated 31 st January 2017 issued by the Respondent No.1 under Section 197 of the IT Act, requiring deduction of TDS at the rate of 4% on all payments made by ONGC to the Appellant for activities out of India and in India in respect of the contract dated 30 th September 2016. The R-series Contract was executed after the judgment of the High Court dated 9 th May 2017, referred to above. The High Court had no occasion to consider the R-series contract. 22. On or about 8 th May 2019, the Appellant applied for a certificate under Section 197 of the IT Act for deduction of Nil tax on payments received from ONGC for activities carried on outside India, in the Financial Year 2019-20 in relation to the aforesaid contracts. 23. The Respondent, Income Tax Authorities raised queries on its portal, to which the Appellant responded by a letter dated 21 st May 2019 addressed to the Respondent No.1. On further query from the Income Tax Department, the Appellant filed a reply on 13 th June 2019 pointing out that no income from activities outside India could be 8 brought to tax in India. The Appellant also submitted a table showing the similarities between the contracts forming the subject-matter of the decision of the High Court and the contracts in the year under consideration, that is, the Financial Year 2019-20. 24. By the said letter dated 13 th June 2019, the Appellant pointed out that for over two and half months since the start of the Financial Year 2019-20, no certificates had been issued to the Appellant under Section 197 of the IT Act as a result of which the Appellant was suffering undue hardship as its cash flow was being hampered. The Appellant, therefore, requested the Respondent No.1 to issue certificate at the earliest. On 17 th June 2019, the Appellant submitted activity-wise key dates for each platform under the R-Series and LEWPP Contracts to the Respondent No.1. 25. By letter dated 22 nd June 2019, addressed to the Respondent No.1, the Appellant answered further queries. However, in view of the financial crunch faced by the Appellant, the Appellant requested :“The Applicant humbly submits that since it is facing financial hardship as the first quarter of FY 2019-20 has come to an end and it is yet to have the lower withholding tax certificate, the Applicant (without prejudice to its legal position), is willing to offer a concession to have the certificate at the tax rate of 4% plus applicable surcharge and cess for the entire contractual revenues, which is in line with the recently concluded assessment proceedings for AY 2016-17 in Applicant’s own case, where your goodself concluded that the entire contractual revenues were chargeable to tax under Section 44BB of the Act at an effective tax rate of 4% plus applicable surcharge and cess. 9In light of the above, it is our humble request to your goodself to kindly issue the certificate at your earliest convenience.” 26. The Appellant contends that a certificate of Nil TDS, for payments received in respect of activities outside India, should have been issued to the Appellant, in deference to decisions rendered by various Appellate Authorities from the Assessment Years 2007-08 to 2015-16, opining that income in respect of activities out of India was not taxable in India and as also the judgments of the Delhi High Court referred to above. 27. In the Assessment Year 2018-19, the Respondent had followed the same approach as in the Assessment Year 2017-18 and issued a certificate dated 10 th April 2018 under Section 197 of the Act for Nil TDS in respect of payments for activities outside India. This direction was in respect of both LEWPP Contract as well as R-Series Contract. 28. However, in departure from the position taken in the previous years, the Respondent No.1 issued a certificate dated 26 th June 2019 under Section 197(1) of the IT Act for the Financial Year 2019-2020 corresponding to the Assessment Year 2020-2021 directing ONGC to deduct TDS at the rate of 4% on receipts in respect of activities both outside and inside India. 29. The Appellant filed a Writ Petition under Article 226 of the Constitution of India being Writ Petition (C) No.8527 of 2019, inter alia , 10 challenging the said certificate dated 26 th June 2019. The Writ Petition has been dismissed by the judgment and order impugned in this Court. 30. Mr. Ganesh appearing on behalf of the Appellant forcefully argued that the Respondent No.1 had erred in law in not granting Nil rate TDS to the Appellant for the financial year 2019-20 under Section 197 of the IT Act. 31. Mr. Ganesh argued that Appellant was assessed for Assessment Years 2007-08, 2008-09 and 2009-10 in respect of contracts similar to the above noted contracts and was held not to be taxable in India. Even though the Assessing Authority had, from the Assessment Year 2007-08 taken the view that revenue in respect of activities outside India were taxable in India, the ITAT being the Appellate Authority, held to the contrary. The Appellate Authority had all along taken the stand that the Appellant has no Permanent Establishment in India and no such income from activities outside India would be chargeable to tax in India. 32. Mr. Ganesh relied upon the judgment rendered by the High Court in the Appellant’s own case in respect of the Assessment Years 2007-08 and 2008-09 which is reported in (2016) 383 ITR 648. The Delhi High Court analyzed the contract of the Appellant with Respondent ONGC and held that the project office of the Appellant did not constitute a Fixed Base Permanent Establishment under the provisions of the Double Taxation Avoidance Agreement. The question of splitting profits arising from the contract into two categories, that is, profits attributable to 11 India and profits attributable to overseas activities did not arise. The judgment was followed in respect of appeal of the Respondent for the Assessment Year 2009-10. Mr. Ganesh argued that R-Series and LEWPP Contracts relevant to the Assessment Year in question that is Assessment Year 2020-21 corresponding to the Previous Year 2019-20, are identical to the contracts considered by the Appellate Authority in Appellant’s own case in relation to the Assessment Years 2007-08, 2008-09 and 2009-10. 33. The Delhi High Court issued notice to the Revenue Authorities, in response to which a counter affidavit was filed enumerating the grounds and reasons justifying the issuance of the impugned certificate. 34. After hearing the parties at length, the High Court held that an administrative decision was subject to judicial review under Article 226 of the Constitution of India only on grounds of perversity, patent illegality, irrationality, want of power to take the decision and procedural irregularity. Judicial review is directed not against the decision but the decision making process. The High Court did not find any such arbitrariness in the approach of the concerned Respondents in the exercise of their jurisdiction, that called for interference under Article 226 of the Constitution of India. The High Court found that the reasons in the note-sheet could not be said to be so fallacious, unfair or unreasonable that they required intervention of the High Court. 35. The High Court further observed and held: 12“18. Sub Section (1) of Section 195 of the Act provides that any person responsible for paying to a non-resident, any sum chargeable to tax under the provisions of the Act, shall, at the time of credit of such income to the account of the payee, or at the time of the payment thereof in cash or by the issue of a cheque or draft or any other mode, whichever is earlier, deduct income-tax thereon at the rates enforced. *** 24. … As of now, we are not concerned with a regular assessment proceeding but, with determination of rate of tax deduction. On perusal of reasons, it becomes manifest that during the course of enquiry under Section 197 of the Act, the petitioner was asked to furnish the details regarding the scope and nature of the aforenoted contracts. Revenue contends that for the R-series contracts, the petitioner has made contradictory statement regarding commissioning period and period of as-built documentation etc. Petitioner, in its submission dated 22.06.2019, contends that commissioning work is not undertaken by them for the R-series contracts, and the same is to be performed by ONGC. Without going into the question as to whether the petitioner's stand is contradictory, we may note that the Assessing Officer while exercising its power under Section 197, during the course of the enquiry, cannot undertake an exhaustive exercise to determine this issue conclusively. We find force in the submissions of Mr. Raghvendra Kumar Singh that the question as to whether the petitioner has constituted a PE, cannot possibly be undertaken in the enquiry having regard to the time frame permissible under law for deciding the application under Section 197 of the Act. The reasons shown to us also take note of the fact that in the immediate preceding years i.e., AY- 2016-17 and AY- 2017-18, for which regular assessment has been completed, petitioner has been held to have a Permanent Establishment (PE) in India, and its total income from the contracts with ONGC have been held to be taxable under the IT Act. Section 44BB of the Act is applied, and 10% of the contractual receipts were considered as business profits. The rate of tax being 40%, a certificate was, accordingly, issued @ 4%. For the other assessment years as well, assessment has been completed and appeal is pending before the appellate authorities. The Petitioner, obviously, disputes the finding of the Respondent as erroneous and misplaced, on the ground that for AY- 2015-16, the first appellate authority-following the decision of this Court in petitioner's own case, has held that the petitioner has no PE in India. Be that as it may, for AY-2016-17 and 2017-18, this question has been determined against the petitioner. It is well-settled proposition that in tax jurisprudence, the principle of res judicata is not applicable to income tax proceedings... [Ref: 13New Jehangir Vakil Mills Co. Ltd. v. CIT: [1963] 49 ITR 137 (SC) (Full bench)]. "It is well settled that in matters of taxation there is no question of res judicata because each year's assessment is final only for that year and does not govern later years, because it determines only the tax for a particular period." [Ref: Instalment Supply (P) Ltd. v. Union of India : AIR 1962 SC 53 (Constitution bench)]. *** 27. In the present case, there cannot be any dispute that existence of PE is required to be determined by law for each year separately on the basis of the scope, extent, nature and duration of activities in each year. In this regard, the contracts in question i.e. R-series contracts dated 07.02.2018 and LEWPP series contracts dated 30.09.2016 would have to be taken into consideration. Concededly, this Court in its decision dated 09.05.2017 did not have the occasion to consider the R-series contract dated 07.02.2018. The Court only considered the contract dated 30.09.2016 as noted in para -1 of the said decision. There is thus, a distinguishing feature - the R-series contract has not been considered by this Court in its order dated 09.05.2017. Moreover, in the instant case, the reasons record that the two contracts are indivisible, and the petitioner cannot divide the contractual receipts in two categories viz. inside India and Outside India services. The installation PE will come into existence, if "project or activity continues for a period of more than 9 months" under Indo-UAE DTAA. This question of fact will have to be determined separately for each assessment year, and we are informed that for AY-2016-17 and AY-2017-18, the determination is presently against the petitioner. We cannot accept the petitioner's contention that the assessment proceedings for the AYs 2007-08, 2008-09 and 2009-10 have already determined this question in favour of the petitioner and there is no change in any circumstances. This question would require to be determined and finding of the fact would have to be arrived at, by a careful consideration of terms of contract, determination whereof cannot be undertaken in the proceedings under Section 197 of the Act . *** 29. Further, the petitioner's contention that under each of the contracts, the installation activities were completed in less than 9 months, and that the scope of R-series contracts, did not include commissioning activities, are all factual aspects which cannot be examined while exercising judicial review over the decision of the respondent under Section 197 of the Act. 1430. The petitioner has relied upon the judgments in Ishikawajima- Harima Heavy Industries: [2007] 288 ITR 408 (SC) and Hyundai Heavy Industries: [2007] 291 ITR 482 (SC), which do not appear to be applicable to the facts of the present case. In Ishikawajima (supra), the Supreme Court held that for a non-resident entity to be taxed in India, it should carry on business through a permanent establishment in India, and income taxed is on the basis of extent appropriate to the part played by permanent establishment in those transactions, and that only such part of the income, as is attributable to the operations carried out in India can be taxed in India. In the said case, a clear distinction could be identified between onshore and offshore activities. In the present case, the respondents contend that no such distinction is clearly identifiable from the contracts in question. Further, the said cases (Ishikawajima (supra) and Hyundai heavy Industries (supra)) relate to assessment proceedings, whereas, in the present case, we are concerned with proceedings for grant of certificate under section 197. The scope of enquiry and investigation in both these proceedings is different, especially after the introduction of Explanation 2 to section 195 and at the stage of section 197 proceedings, the question of existence of permanent establishment is not required to be gone into. Therefore, having regard to the aforesaid provision, we cannot direct the Revenue to hold that the petitioner does not have a PE and give the consequent effect of such finding while deciding an application under Section 197 of the Act. Determination of all these questions would have to be undertaken during the course of regular assessment. *** 32. ...However, we cannot ignore the fact that Petitioner took categorical stand and prevailed upon the revenue to accept the declaration made in the said communication. Although the declaration was qualified, yet, since the petitioner requested the respondent to deduct the tax @ 4% + applicable surcharge & cess for the entire contractual revenues, revenue was justified in accepting the same and the petitioner cannot be permitted to resile there from, once the department has accepted petitioner's proposal.” 36. It is well settled that the obligation to deduct TDS is limited to appropriate proportion of income chargeable to tax under the IT Act that forms part of the gross sum of money payable to the non-resident. A person paying any sum to a non-resident is not liable to deduct any tax at source if such sum is not chargeable to tax under the IT Act, as held 15 by this Court in G E India Technology Centre Pvt. Ltd. v. Commissioner of Income Tax and Another 1. 37. The High Court rightly held that the question of whether the Appellant had PE, could not possibly be undertaken in an enquiry for issuance of Certificate under Section 197 of the IT Act, having regard to the time-frame permissible in law for deciding an application, more so, when regular assessment had been completed in respect of the immediate preceding year and the Appellant found to be taxable under the IT Act at 10% of the contractual receipts. The Assessing Authority found that the Appellant had PE in India in the concerned Assessment Years. The appeal of the Appellant is possibly pending disposal. 38. As held by the High Court, it is well settled that the principle that res judicata is not applicable to income tax proceedings because assessment for each year is final only for that year and does not cover later years. 39. Whether the Appellant had PE or not, during the Assessment Year in question, is a disputed factual issue, which has to be determined on the basis of the scope, extent, nature and duration of activities in India. Whether project activity in India continued for a period of more than nine months, for taxability in India in terms of the AADT, is a question of fact, that has to be determined separately for each Assessment Year. 1 (2010) 327 ITR 456 (SC) 16 40. It may be true, that for a non-resident entity to be taxed in India, it should carry on business through a Permanent Establishment in India, as held by this Court in Ishikawajima-Harima Heavy Industries Ltd. v. Director of Income Tax, Mumbai 2 and Commissioner of Income Tax and Anr. v. Hyundai Heavy Industries Co. Ltd. 3. However, the judgments would only be attracted if there were a definite finding that the Appellant did not have any PE in India during the Assessment Year in question, which as stated above, would also depend on the duration and scope of the activities in India. The nature, extent and the duration of work done in India, could vary from year to year. 41. It is reiterated that in the immediately preceding Assessment Year, the Assessing Authority proceeded to assess the Appellant on the basis that it did have a Permanent Establishment (PE) in India. Moreover, as rightly held by the High Court, Ishikawajima-Harima Heavy Industries (supra) and Hyundai Heavy Industries (supra) related to assessment proceedings whereas this case pertains to issuance of certificate under Section 197 of the IT Act. The scope of enquiry and investigation in proceedings for grant of Certificate under Section 197 of the IT Act is different from the scope of assessment proceedings. The High Court rightly declined to direct the Revenue to hold that the Appellant did not have PE in India. 2 (2007) 288 ITR 408 (SC) 3 (2007) 291 ITR 482 (SC) 17 42. By its letter dated 22 nd June 2019, referred to above, the Appellant made a request to the Revenue for issuance of Certificate under Section 197(1) of the IT Act permitting deduction of TDS at the rate of 4% plus applicable surcharge and cess, for all contractual receipts, in line with assessment proceedings for the Assessment Year 2016-2017 without prejudice to its legal position, since the Appellant had been facing financial hardship and urgently required funds. On 26 th June 2019, the Respondent No.1 issued the impugned Certificate directing ONGC to deduct TDS at the rate of 4% for all sums receivable in respect of activities both outside and inside India. 43. The impugned Certificate being as per the request of the Appellant, it is not open to the Appellant to make a volte-face and challenge the impugned Certificate. 44. It may be true that the letter of request dated 22 nd June 2019, of the Appellant, referred to above, for issuance of a Certificate under Section 197 of the IT Act, for TDS at the rate of 4% on all receipts was without prejudice to the rights in law and contentions of the Appellant. Such a request without prejudice to the rights and contentions of the Appellant would not operate as estoppel against the Appellant in any Assessment Proceedings, Appellate proceedings or any other proceedings. However, the impugned Certificate having been issued as per the Appellant’s own request, the Appellant is estopped from questioning the impugned Certificate by initiation of proceedings under 18 Article 226 of the Constitution of India. The Appellant itself made a request for Certificate for TDS at the rate of 4% on all receipts. 45. There is no such infirmity in the reasoning of the High Court which calls for interference of this Court under Article 136 of the Constitution of India. As rightly held by the High Court, since the Appellant requested issuance of Certificate for deduction of TDS at 4% of taxable value it is not for the Appellant to challenge the certificate. Moreover, it appears that in the final assessment for one or two preceding Assessment Years it was found that the Appellant did have PE in India. Appeals are pending. In any event, Tax deducted at source is adjustable against the tax, if any, ultimately assessed as payable by the Assessee and any excess tax deducted is refundable with interest. Interference is not warranted at this stage. 46. Moreover, in course of hearing, Counsel for the Revenue handed us a Draft Assessment Order, issued in respect of the Assessment Year in question, that is 2020-21, holding that the Appellant had PE in India and was liable to tax in India under the IT Act. 47. Needless to mention that any observation made by this Court or by the High Court will not influence the final assessment which has to be made in accordance with law taking into account all relevant facts and circumstances or any appeal therefrom. In the event, it is found that the Appellant is not liable to tax, the Appellant will be entitled to refund of TDS with interest. 19 48. The Appeal is dismissed. …….................................J [ INDIRA BANERJEE ] NEW DELHI; JULY 29, 2022 20 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 4964  OF 2022 (ARISING OUT OF SLP(C) No. 9233 OF 2020 NATIONAL PETROLEUM CONSTRUCTION COMPANY ...APPELLANT Versus DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2(2)(2), INTERNATIONAL TAXATION, NEW DELHI & ANR. ...RESPONDENTS J U D G M E N T J.K. Maheshwari, J . Leave granted. 2.  After  going through the judgment and the opinion formed by esteemed Justice Ms. Indira Banerjee, I respectfully disagree to the conclusions as drawn for the reasons to follow. 3.  On   perusal   of   detailed   facts   as   stated   in   the   order,   it   is clear that appellant­company is incorporated under the laws of United   Arab   Emirates   (in   short   ‘UAE’)   and   is   engaged   in   the business   of   Surveys   (pre­engineering,   pre­construction/pre­ installation   and   post­installation),   Design,   Engineering, 21 Procurement,   Fabrication,   Anticorrosion   &   Weight   coating   (in case   of   rigid   pipeline,   Load­out,   Tie­down/Sea   fastening   Tow­ out/Sail­out, Transportation, Installation, Hook­up, Installation of   submarine   pipeline,   installation   and   hook­up   of   submarine cables,   Modifications   on   existing   facilities,   Testing,   Pre­ commissioning,   Commissioning   of   entire   facilities   as   described in   the   biding   document.   Since   the   year   2007­2008,   the   ONGC was   granting   contract   to   the   appellant   to   carry   out   the   work. For   the   assessment   years   2007­2008   and   2008­2009,   the   C­ Series   and   LEWPP   contracts   were   granted   to   the   appellant   on year   to   year   basis.   After   completion   of   those   contracts   as   per the   record   of   the   case,   the   payment   of   zero   percent   tax   on   the income   outside   India   in   terms   of   the   assessments   were   in question.   The   High   Court   of   Delhi   passed   the   order   on 29.01.2016   for   the   said   assessment   years   i.e.   2007­2008   and 2008­2009   to   the   said   contracts   wherein   it   was   held   that assessee   did   not   have   the   PE   in   India   and   earned   profit attributable   to   that   PE   and   in   fact   the   income   was   from   the activities   carried   out   outside   of   India.   However,   the   orders   of assessment   for   the   years   2007­2008   and   2008­2009 22 respectively   as   well   as   the   corresponding   orders   passed   by   the ITAT   in   the   corresponding   appeals   were   set   aside.   It   has   been brought   to   knowledge   that   Civil   Appeal   No.8761/2016   filed against the said order is pending before this Court.  4. On   perusal   of   the   provisions   of   the   Income   Tax   Act   (for short “IT Act”), it reveals the proceedings of the assessment falls under   Chapter   XIV   of   the   IT   Act,   which   includes   return   of income, permanent account number, scheme for submission of returns   through   tax   return   and   its   preparation,   assessment, rectification   of   mistake   etc.   While   the   present   case   relates   to certificates   for   deduction   at   lower   rate   or   no   deduction   of income   at   source,   which   falls   in   Chapter   XVII   of   the   IT   Act. Therefore, what is the recourse and considerations available to the   assessing   officer   at   the   time   of   issuance   of   the   certificate under   Section   197(1)   of   the   IT   Act   or   he   has   to   rely   upon   the assessment orders of the previous years.  5. While examining the said issue in the facts and context of the   present   case,   some   provisions   are   required   to   be   referred. As   per   Section   6(3)   of   the   IT   Act   for   the   resident   in   India,   the income   inside   the   country   is   taxable.   Under   sub­section   (3),   it 23 is specified that if any Indian company is said to be a resident in   India   in   any   previous   year   or   its   place   for   effective management   in   that   year   was   in   India   the   income   of   such   is taxable. By the explanation, the place of effective management has   been   clarified   whereby   it   is   clear   that   if   any   commercial decision necessary for the conduct of a business of an entity as a whole or in substance is made, it would be called as a place of effective management.  6. As per Section 5(2) of the IT Act, it is clear that subject to the other provisions of the Act, the total income of any previous year of a person who is a non­resident includes all income from whatever   sources   derived   either   is   received   or   is   deemed  to   be received in India in such year by or on behalf of such person; or accrues or arises or is deemed to accrue or arise to him in India during   such   year.   Explanation   (1)   of   it   clarifies   that   income accruing   or   arising   outside   India   shall   not   be   deemed   to   be received in India within the meaning of this section on account of   the   fact   that   it   has   been   taken   into   account   in   the   balance sheet   prepared   in   India.   Explanation   (2)   removes   the   doubts whereby   the   income   which   has   been   included   in   the   total 24 income of a person on the basis that it has accrued or arisen or is deemed to have accrued or  arisen to him shall not again be so   included   on   the   basis   that   it   is   received   or   deemed   to   be received   by   him   in   India.   The   aforesaid   provision   has   been brought   with   an   intent   to   check   the   double   taxation.   Thus, from   above   for   clarity,   it   is   reiterated   that   any   income   outside India to a non­resident would not be taxable in India even if it is specified in the balance sheet prepared in India. 7. By   a   judgment   of   this   Court   in   the   case   of   G.E.   India Technology Centre Pvt. Ltd. (supra)   in the context of Section 195(1),   interpretation   of   the   word   “chargeable”   under   the provisions of IT Act has been made by which it is clarified that a person paying interest or any other sum to a non­resident is not   liable   to   deduct   tax   if   such   sum   is   not   chargeable   to   tax under   the   I.T.   Act.   Further,   the   Court   clarified   where   there   is no   obligation   on   the   part   of   the   payer   and   no   right   to   receive the   sum  by   the   recipient   and   that   the   payment   does   not   arise out   of   any   contract   or   obligation   between   the   payer   and   the recipient   but   is   made   voluntarily,   such   payments   cannot   be regarded as income under the   I.T. Act.     25 8. It is not in dispute in the present case that incorporation of   the   appellant’s   company   is   under   the   laws   of   UAE.   In   the context,   the   treaty/agreement   entered   by   India   with   foreign countries   including   UAE,   are   recognized   under   Chapter   IX starting   from   Section   90   onwards   and   for   avoidance   of   double tax,   the   procedure   has   been   prescribed   in   Chapter   X.   In   the above said agreement/treaty between India and UAE known as Agreement   of   Avoidance   of   Double   Taxation   (in   short   “AADT”) was   executed.   Clause   (1)   and   (6)   of   Article   7   of   the   said agreement   are   relevant   to   the   present   case,   which   are reproduced for ready reference as under:“(1). The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment.” “(6). For the purposes of preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.” 26 Perusal   of   the   aforesaid   makes   it   clear   that   enterprises   of   a contracting   state   shall   be   taxable   in   the   said   state   unless   the business   is   carried   out   in   other   contracting   state   through   a permanent   establishment   situated   there.   It   is   further   clarified that the profit of the enterprises may be taxed in other state to the   extent   of   the   profit   attributable   to   that   PE.   The determination   thereof   shall   be   on   year   to   year   basis   and   the deviation, if any, may be based on good and sufficient reasons to   the   contrary.   Thus,   it   is   clear   that   the   income   earned   in India   may   be   taxable   even   by   an   entity   which   is   not incorporated   in   India   but   the   profit   earned   for   a   contract carried   out   outside   India   by   such   entity   shall   not   be   taxable. The   issue   regarding   establishment   of   PE   at   a   place   where   the work is required to be executed, and profit earned attributable to that PE is a matter of enquiry based on the material brought on record during assessment for the said assessment year.  9. But   for   the   purpose   of   tax   deduction   at   source   at   lower rate   or   no   deduction   during   contractual   period,   the   assessing officer   has   been   empowered   under   Section   197(1)   to   issue   a certificate   to   that   effect   in   the   manner   so   prescribed   as 27 specified   in   Chapter   XVII   of   Income   Tax   Act   which   relates   to collection   and   recovery   of   tax.   On   perusal   of   the   scope   of   the said   Chapter,   it   is   clear   that   the   assessment   in   respect   of   the income is required to be made later in relevant assessment year but   the   tax   on   such   income   may   be   payable   by   deduction   at source   by   way   of   advance   payment   or   as   specified   in   Sub­ Section   1A   of   Section   92   of   IT   Act   as   the   case   may   be.   As   the present case relates to quashment of the TDS certificate dated 26.06.2019   and   seeking   relief   to   issue   the   fresh   certificate under   Section   197,   therefore,   for   ready   reference,   it   is   hereby reproduced as thus:197. Certificate for deduction at lower rate. (1) Subject to rules made under sub-section (2A), where, in the case of any income of any person or sum payable to any person, income-tax is required to be deducted at the time of credit or, as the case may be, at the time of payment at the rates in force under the provisions of sections 192, 193, 194, 194A, 194C, 194D, 194G, 194H, 194-I, 194J, 194K, 194LA, 194LBB, 194LBC, 194M, 49[194-O] and 195, the Assessing Officer is satisfied that the total income of the recipient justifies the deduction of income-tax at any lower rates or no deduction of income-tax, as the case may be, the Assessing Officer shall, on an application made by the assessee in this behalf, give to him such certificate as may be appropriate. 28(2) Where any such certificate is given, the person responsible for paying the income shall, until such certificate is cancelled by the Assessing Officer, deduct income-tax at the rates specified in such certificate or deduct no tax, as the case may be. (2A) The Board may, having regard to the convenience of assessees and the interests of revenue, by notification in the Official Gazette, make rules specifying the cases in which, and the circumstances under which, an application may be made for the grant of a certificate under sub- section (1) and the conditions subject to which such certificate may be granted and providing for all other matters connected therewith . Bare reading of it makes clear that in the case of any income of the person, income tax is required to be deducted at the time of credit or as the case may be at the time of payment at the rates in force as per various sections specified, including Section 195 subject to the rules made under Sub­Section 2A. The rules have been   framed   to   carry   out   the   purpose   of   the   act   which   are known as Income Tax Rules, 1962. The present case relates to Section 195 of the IT Act which pertains to the payment of tax deducted   at   source   by   non­residents.   As   per   the   provision   of Section   197,   if   the   assessing   officer   is   satisfied   that   the   total 29 income of the recipient justifies any lower rate or no deduction of income tax as the case may be, he shall issue a certificate to the   assessee   on   an   application   submitted   by   him.   The   said certificate   shall   be   valid   until   it   is   cancelled   by   the   assessing officer.   Section   2A   was   introduced   conferring   powers   to   the Board having regard to the convenience of the assessee and the interest of revenue, and the rule is made to submit application and   the   conditions   for   issuance   of   certificate,   notifying   it   in Official   Gazette.   Pursuant   thereto,   a   notification   dated 29.03.2011 was published in the Official Gazette specifying the cases   and  the   circumstances   under   which   the   application   may be   made   for   grant   of   certificate   and,   the   conditions   for satisfaction of assessing officer who may grant certificate. 10. By   way   of   the   said   notification   dated   29.03.2011, amendment in the Income Tax Rules, 1962 was made and these Rules   are   known   as   Income   Tax   (Second   Amendment)   Rules, 2011 by  which Rule  28  AA has  been  added. The said rule was further   amended   by   notification   dated   25.10.2018.   The   said amended   rules   are   relevant   for   this   case,   however,   reproduced as thus: 30 “Certificate for deduction at lower rates or no deduction of tax from income other than dividends . 28AA . (1) Where the Assessing Officer, on an application made by a person under sub-rule (1) of rule 28 is satisfied that existing and estimated tax liability of a person justifies the deduction of tax at lower rate or no deduction of tax, as the case may be, the Assessing Officer shall issue a certificate in accordance with the provisions of sub-section (1) of section 197 for deduction of tax at such lower rate or no deduction of tax. (2) The existing and estimated liability referred to in sub-rule (1) shall be determined by the Assessing Officer after taking into consideration the following:— (i) tax payable on estimated income of the previous year relevant to the assessment year; (ii) tax payable on the assessed or returned 2[or estimated income, as the case may be, of last four] previous years; (iii) existing liability under the Income-tax Act, 1961 and Wealth-tax Act, 1957; (iv) advance tax payment 3[tax deducted at source and tax collected at source for the assessment year relevant to the previous year till the date of making application under sub-rule (1) of rule 28]; (v) omitted on 25.10.2018 (vi) omitted on 25.10.2018 (3) The certificate shall be valid for such period of the previous year as may be specified in the certificate, unless it is cancelled by the Assessing Officer at any time before the expiry of the specified period. ['(4) The certificate for deduction of tax at any lower rates or no deduction of tax, as the case may be, shall be issued direct to the person 31responsible for deducting the tax under advice to the person who made an application for issue of such certificate: Provided that where the number of persons responsible for deducting the tax is likely to exceed one hundred and the details of such persons are not available at the time of making application with the person making such application, the certificate for deduction of tax at lower rate may be issued to the person who made an application for issue of such certificate, authorising him to receive income or sum after deduction of tax at lower rate. (5) The certificates referred to in sub-rule (4) shall be valid only with regard to the person responsible for deducting the tax and named therein and certificate referred to in proviso to the sub-rule (4) shall be valid with regard to the person who made an application for issue of such certificate. (6) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall lay down procedures, formats and standards for issuance of certificates under sub-rule (4) and proviso thereto and the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to the issuance of said certificate.” 11.  From   the   above,   it   is   clear   for   issuance   of   a   certificate under Section 197 of the IT Act, an application shall be made to assessing   officer   under   sub­rule   (1)   of   Rule   28.   The   assessing officer   after   recording   satisfaction   that   existing   and   estimated 32 tax   liability   justifies   the   deduction   of   tax   at   lower   rate   or   no deduction   of   tax   as   the   case   may   be   shall   issue   certificate. While exercising  the power  to  issue a certificate, the  assessing officer   is   required   to   follow   the   procedure   as   per   sub­rule   (2). The assessing  officer  shall consider  the existing  and  estimated liability   that   what   may   be   tax   payable   on   estimated   income   of the   previous   year;   tax   payable   on   the   assessed   or   returned income   of   the   last   four   years   from   previous   year;   existing liability   under   the   IT   Act;   advance   tax   payment   i.e.   tax deducted   and   collected   at   source   for   the   assessment   year relevant to the previous year till the date of making application under   sub­rule   (1)   of   Rule   28.   Thus,   for   the   purpose   of issuance of certificate under Chapter XVII of Section 197 of the IT Act, the procedure for determination has been prescribed to the assessing  officer on which satisfaction may be recorded by him.  12. It   is   further   required   to   say   that   for   assessment   under Section   143,   the   assessment   of   total   income   or   loss   may   be computed   by   the   assessing   officer   in   a   return   filed   by   the assessee for the said assessment year after making adjustment 33 and   disallowing   exemptions   wrongly   claimed.   Thereafter,   the recovery   can   be   made   by   an   order   of   the   competent   officer   as per  Second Schedule of the IT Act read with Sections 222 and 276   alongwith   Sections   220   &   221   with   interest   and   penalty. Thus,   in   my   considered   view   the   issuance   of   the   certificate under Section 197(1) is based on the existing and estimated tax liability   after   recording   satisfaction   by   assessing   officer following   the   procedure   so   prescribed,   in   rules,   but   the procedure for assessment as specified in Chapter XIV of the IT Act is different.  13. The   High   Court   in   the   impugned   order   relied   upon   the proceedings   of   the   Revenue   Department,   which   has   been referred   in   para   10   of   the   judgment.   As   per   the   proceedings referred,   the   department   has   acknowledged   the   High   Court order   dated   29.01.2016   and   said   that   for   assessment   years 2007­2008   to   2010­2011   there   was   no   PE   in   India,   but   the department   filed   the   appeal   C.A.   No.8761/2016   is   pending before this Court. In para 10(7), the High Court further referred the decision of Delhi High dated 09.05.2017 passed in W.P.(C) No.2117/2017   and   CM   No.9268/2017.   The   said   judgment   is 34 solely   on   the   issue   of  issuance   of  the   certificate   under   Section 197 relates to the financial year 2016­2017. As per the ratio of the  said  judgment, it  is clear  that  the  certificate issued by  the respondent no.1 regarding deductions of the TDS at the rate of 4%   on   the   entire   payment   made   by   the   ONGC   was   set   aside. Following   the   said   decision,   the   department   issued   the certificate   for   financial   year   2016­2017   at   the   rate   of   4% excluding   surcharge   and   cess   for   inside   India   revenue   and   at the   rate   of   0%   for   outside   India   revenue.   Further   for   financial years   2017­2018   and   2018­2019   certificates   were   issued following the said decision of Delhi High Court for both type of contracts i.e. LEWPP and  R­Series. Thereafter, it was recorded that   assessments   for   assessment   years   2015­2016   and   2016­ 2017   have   been   completed   with   a   finding   that   activities   of   the appellant were covered under Section 44BB of the IT Act. It was further   recorded   that   the   assessment   for   assessment   year 2017­2018   was   selected   under   CASS   which   is   still   pending. Thereafter, noting  was  made  that  it is  difficult  to bifurcate the revenue generated by onshore and offshore activities. However, the   rate   of   deduction   proposed   was   at   the   rate   of   4%.   The 35 relevant excerpt of note sheets further  reflect that the demand of   existing   liability   was   Rs.35.88   crores   for   the   year   2015­16 and   2016­17  but  later  it   was  reduced   to   Rs.2.67   crores  out   of which   Rs.2.63   crores   pertained   to   assessment   year   2017­18 which   was   still   under   scrutiny   for   assessment,   thus   there appear   no   existing   demand.   The   said   note   sheets   of   the Revenue   do   not   reflect   that   clause   (i),   (ii),   (iii)   and   (iv)   of   Rule 28AA(2)   of   Rules   regarding   estimated   and   assessed   liability   of last   four   previous   years;   existing   liability   and   advance   tax payment   i.e.   deducted   and   collected   at   source   till   the   date   of submitting application have been considered for determination, and the assessing officer had applied its mind prior to issuance of desired certificate.  14. On   perusal   of   the   findings   recorded   in   the   impugned order,   it   reveals   that   Delhi   High   Court   made   unreasonable attempt to distinguish previous order dated 09.05.2017 relying the note sheets of the revenue and tried to distinct LEWPP and R­Series   contracts.   In   my   considered   view   on   admitting   the certificates @ 0% tax deductions for  both LEWPP and R­Series contracts for the preceding financial years, the High Court was 36 not justified to make distinction between two types of contracts. In   fact   the   Court   must   see   the   satisfaction   recorded   by   the assessing   officer   after   determination   of   the   issues   specified   in Rule 28AA(2). The appellant reiterated that the terms of LEWPP contract and R­Series contract were identical while department without   disputing   the   said   fact   relied   upon   the   orders   of assessment   passed   in   previous   years   without   bringing   on record   the   fact   of   estimated   liability.   In   my   view,   distinction drawn,   accepting   the   contention   of   the   revenue   by   the   High Court ignoring admission of issuing certificate for both types of contracts is completely misplaced. In fact, the certificate under Section 197(1) is issued during a financial year and on closing of   the   said   financial   year,   assessment   may   be   made   after submission   of   the   return   of   income   and   documents   with respect to the income from the contract of that particular year. The   department   may   enquire   about   establishment   of   PE   and income   attributable   to   that   PE   in   assessment   proceeding   but while dealing  the issue of issuance of certificate under  Section 197(1)   relying   upon   said   issues   by   the   High   Court   is   not justified.   During   course   of   hearing,   the   counsel   for   the 37 appellant handed over  two  orders dated 08.09.2021 passed by Commissioner   of   Income   Tax   (Appeals)   for   assessment   year 2016­2017   and   2017­2018   allowing   the   appeals   filed   by   the appellant   challenging   the   assessment   order   for   respective assessment   year.   While   allowing   the   appeal,   Commissioner   of Income   Tax   held   that   the   appellant   did   not   have   PE   during relevant   financial   year   and   accordingly   in   absence   of   PE contract receipts were not taxable in India.     15. The record of the case indicates that for the financial year 2017­18 two certificates each dated 08.06.2017 (Annexures P­6 &   P­7)   were   issued   for   zero   TDS   which   is   related   to   the assessment year 2018­19. Similarly, for financial year 2018­19 (assessment   year   2019­20)   two   certificates   dated   10.04.2018 and 08.05.2019 (Annexures P­8 & P­9 respectively) were issued for zero TDS. Therefore, after the order of the High Court dated 09.05.2017,   it   may   be   a   relevant   consideration   to   assessing officer to record satisfaction, which has not been considered by the   High   Court.   The   reply   of   the   appellant   dated   22.06.2019 has   been   referred   in   the   impugned   order   stating   that   the appellant   reserve   its   right   subject   to   legal   objections   and 38 requested   for   issuance   of   certificate   at   the   rate   of   4%   plus applicable   surcharges   and   cess   because   of   financial   hardship. In   my   opinion,   the   said   letter   cannot   influence   the   wisdom   of the   Court,   where   the   prescribed   procedure   under   Rule   28AA has not been followed by the assessing officer. However, on the basis   of   letter   dated   22.06.2019   no   lineage   contrary   to prescribed procedure can influence the Court.  16. As   per   discussion   made   above,   in   my   view,   since   there was   no   change   in   circumstances   and   the   situation   of   the appellant   in   the   financial   years   2017­2018   and   2018­2019 (assessment   years   2018­19   and   2019­20)   respectively   and   at the financial year 2019­20 in question (assessment year 2020­ 21),   are   the  same,  however,  the   principle   of  consistency   ought to   be   followed   while   considering   the   application   under   Section 197   of   the   IT   Act.   This   Court   in   the   case   of   M/s   Radhasoami Satsang, Saomi Bagh, Agra  v.  Commissioner of Income Tax , (1992)   1   SCC   659   has   categorically   upheld   the   principle   of consistency in following words:“16. We are aware of the fact that strictly speaking res judicata does not apply to income 39tax proceedings. Again, each assessment year being a unit, what is decided in one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year. 17. On these reasonings in the absence of any material change justifying the Revenue to take a different view of the matter — and if there was no change it was in support of the assessee — we do not think the question should have been reopened and contrary to what had been decided by the Commissioner of Income Tax in the earlier proceedings, a different and contradictory stand should have been taken. We are, therefore, of the view that these appeals should be allowed and the question should be answered in the affirmative, namely, that the Tribunal was justified in holding that the income derived by the Radhasoami Satsang was entitled to exemption under Sections 11 and 12 of the Income Tax Act of 1961. 18. Counsel for the Revenue had told us that the facts of this case being very special nothing should be said in a manner which would have general application. To are inclined to accept this submission and would like to state in clear terms that the decision is confined to the facts of the case and may not be treated as an authority on aspects which have been decided for general application” 40 17. Further, upholding the dictum laid down in  Radhasoami   (supra), in case of  Bharat Sanchar Nigam Limited and Anr.  v.  Union of India and Ors. , (2006) 3 SCC 1, this Court has held  that if facts and law in a subsequent assessment year are the  same, no authority whether quasi­judicial or judicial can  generally be permitted to take a different view in following  words:“20. The decisions cited have uniformly held that res judicata does not apply in matters pertaining to tax for different assessment years because res judicata applies to debar courts from entertaining issues on the same cause of action whereas the cause of action for each assessment year is distinct. The courts will generally adopt an earlier pronouncement of the law or a conclusion of fact unless there is a new ground urged or a material change in the factual position. The reason why the courts have held parties to the opinion expressed in a decision in one assessment year to the same opinion in a subsequent year is not because of any principle of res judicata but because of the theory of precedent or the precedential value of the earlier pronouncement. Where facts and law in a subsequent assessment year are the same, no authority whether quasi- judicial or judicial can generally be permitted to take a different view. This mandate is subject only to the usual gateways of distinguishing the earlier decision or where the earlier decision is per incuriam. However, these are fetters only on a coordinate Bench which, failing the possibility of availing of either of these gateways, may yet differ with the view expressed and refer the 41matter to a Bench of superior strength or in some cases to a Bench of superior jurisdiction.” 18. In   view   of   the   foregoing   discussion,   in   my   considered opinion   the   order   passed   by   the   High   Court   is   without considering   the   perspective   and   scope   of   issuance   of   the certificate for deduction of tax at lower rate or no deduction at tax   and   also   without   following   the   prescribed   procedure.   The High   Court   has   wrongly   distinguished   the   previous   judgement dated   09.05.2017   on   the   premises   which   is   not   tenable,   and relied   upon   undertaking   dated   22.06.2019   of   appellant submitted   perforce.   After   due   consideration   in   my   view   High Court   has   committed   error   in   dismissing   the   writ   petition; therefore,   I   am   unable   to   concur   the   opinion   of   the   esteemed sister Judge.  19. During   hearing,   it   is   said   that   against   the   previous judgment   of   Delhi   High   Court   dated   29.01.2016   C.A. No.8761/2016   is   pending,   which   relates   to   assessment   orders pertaining   to   financial   years   2007­2008   to   2009­2010,   but   it cannot   be   connected   to   the   issue   of   certificate   under   Section 197(1) of the IT Act for the year 2019­2020. The other judgment 42 of   Delhi   High   Court   dated   09.05.2017   directly   deals   the issuance   of   the   certificate   under   Section   197(1)   of   the   IT   Act. For the reasons mentioned in detail I endorse the view taken by Delhi   High   Court   as   correct   and   plausible   view.   Thus,   it   is made clear here that the TDS certificate granted under Section 197   (1)   shall   be   provisional   subject   to   the   assessment   of   the returned income.  20.   In view of the foregoing, the appeal filed by the appellant is hereby allowed setting aside the order of the High Court with a   direction   to   the   respondent   to   reconsider   the   application   of the   appellant   and   issue   certificate   following   the   prescribed procedure. 21. Resultantly,   this   appeal   is   hereby   allowed   to   the   extent indicated hereinabove.  ……………………………J.  [J.K. MAHESHWARI ] NEW DELHI; July 29, 2022 43 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 4964 OF 2022 (Arising out of SLP (C) No. 9233 of 2020) NATIONAL PETROLEUM CONSTRUCTION COMPANY … Appellant(s) VERSUS DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 2(2) INTERNATIONAL TAXATION NEW DELHI & ANR. … Respondent(s) O R D E R Leave granted. In view of the difference of opinion between us, the Registry is directed to place the matter before Hon’ble the Chief Justice of India so that an appropriate Bench could be constituted to hear the matter. ………………………………………………………,J. (Indira Banerjee) ………………………………………………………,J. (J.K. Maheshwari) New Delhi; July 29, 2022