Full Judgment Text
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P. (C) 5917/2020 & C.M.No.21397/2020
PANCHMAHAL DISTRICT COOPERATIVE
MILK PRODUCERS UNION LTD. & ORS. ..... Petitioners
Through: Mr.Ramesh P Bhatt, Sr.Advocate
with Mr.Malak Bhatt, Ms.Devanshi
Singh and Ms.Chandni Ghatak,
Advocates.
versus
UNION OF INDIA & ORS. ...... Respondents
Through: Mr.Zoheb Hossain, Sr.Standing
counsel for Income Tax Department
with Mr.Kalrav Mehrotra, Advocate.
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% Date of Decision: 17 September, 2020
CORAM:
HON'BLE MR. JUSTICE MANMOHAN
HON'BLE MR. JUSTICE SANJEEV NARULA
J U D G M E N T
MANMOHAN, J: (Oral)
1. The petition has been heard by way of video conferencing.
2. On the last date of hearing, this Court had passed the following
order:-
“ C.M.Nos.21398-21400/2020
Exemption allowed, subject to all just exceptions.
Accordingly, the applications stand disposed of.
W.P. (C) 5917/2020 Page 1 of 3
W.P.(C) No.5917/2020 & C.M.No.21397/2020
The petition has been listed before this Bench by the
Registry in view of the urgency expressed therein. The same has
been heard by way of video conferencing.
Present writ petition has been filed challenging the
amendment to Section 194N of the Income Tax Act, 1961
(hereinafter referred to as the „Act‟) inserted vide Finance Act,
st
2019 with effect from 01 September, 2019 and substituted by the
Finance Act, 2020, whereby it has been made applicable to
Dairy Co-operative Societies (DCS). In the alternative, the
petitioners pray for a direction to the respondents to issue a
notification exempting the petitioners and similarly situated co-
operative societies from application of Section 194N.
Learned counsel for the respondents raises a preliminary
objection on the ground that this Court has no territorial
jurisdiction to entertain and decide the present writ petition.
Learned counsel for the respondents is directed to obtain
instructions as to whether the respondent-CBDT is willing to
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dispose of the petitioners‟ representation dated 20 July, 2020 by
way of a reasoned order in a time bound manner.
At the request of learned counsel for the respondents,
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adjourned to 17 September, 2020.
The order be uploaded on the website forthwith. Copy of
the order be also forwarded to the learned counsel through e-
mail.”
3. In pursuance to the aforesaid order, the respondent-Central Board of
Direct Taxes (CBDT) has filed a short affidavit. The relevant portion of the
said affidavit reads as under:-
“3. At the outset it is respectfully submitted that under the
provisions of Section 194N of the Income Tax Act, 1961
(“Act”), the Central Government is empowered to notify any
person or class of persons, in consultation with the Reserve
Bank of India (“RBI”), in whose case deduction under
Section 194N is not to be made or to be made at a lower rate.
In the instant petition, the Dairy Cooperative Societies have
W.P. (C) 5917/2020 Page 2 of 3
sought exemption from the deduction of TDS under Section
194N of the Act by way of notification.
4. In this regard, it is respectfully submitted that the CBDT is
willing to dispose of the representation made by the
petitioner on 20.07.2020, within the powers delegated to
CBDT under Section 119 of the Act to provide any
clarification or relief in the said matter within a period of
eight weeks, subject to the furnishing of necessary reply by
the Petitioners, if called for by the CBDT.
5. It is therefore submitted that 8 weeks‟ time be granted for
examining the plea of the Petitioners who have sought
exemption from deduction of tax under Section 194N of the
Act under second and fourth proviso of the said section by
way of notification, after consulting with RBI for the same.”
4. Accordingly, the present writ petition and pending application are
disposed of with a direction to the CBDT to decide the petitioners’
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representation dated 20 July, 2020 after giving an opportunity of hearing to
the petitioners, by way of a reasoned order within eight weeks after
consultation with Reserve Bank of India. Petitioners are directed to file any
clarification/reply/document asked for by the CBDT.
5. The order be uploaded on the website forthwith. Copy of the order be
also forwarded to the learned counsel through e-mail.
MANMOHAN, J
SANJEEV NARULA, J
SEPTEMBER 17, 2020
KA
W.P. (C) 5917/2020 Page 3 of 3