Delhi High Court Quashes 15% TDS Order, Directs Nil Certificate for UK Firm

The Delhi High Court quashed an order under Section 197 of the Income Tax Act directing 15% tax deduction instead of issuing a nil TDS certificate to a UK-based company.

The Court held that the Income Tax Officer wrongly relied on an assessment order that had already been set aside by the ITAT.

It observed that once the Tribunal had ruled on identical facts that the distribution fees did not constitute royalty, the officer could not take a contrary view without fresh material.

Calling the approach revenue-driven and contrary to judicial discipline, the Court directed issuance of a nil TDS certificate within 15 days.

[Financial & Risk Organisation Ltd v. The Income Tax Officer Circle Int. Tax 1(3)(1) New Delhi]