The decision-making process must adhere to the relevant provisions, and the 'satisfaction' under Rule 28-AA needs to be based on objective factors.

ORDER :

1. The petitioner preferred an application under Section 197 of the Income Tax Act, 1961 for issuance of a Lower Deduction of Tax Certificate. During the course of proceeding, the respondents passed orders Annexure P-5 and P-7, which are subject matter of challenge in this petition.

2. The bone of contention of learned counsel for the petitioner is that the petitioner intended to submit an online document dated 1st April, 2023 (Page-35). Said document was not loaded because message was too large. Faced with this, the petitioner preferred a communication on April 3, 2023 at 12 PM (Page-36) in the Traces Portal. It is submitted that while passing the impugned order, (Annexure P-5), it is mentioned that the applicant has not submitted any explanation regarding queries raised whereas the document dated April 3, 2023 aforesaid was loaded on Traces Portal. Thus, the impugned order Annexure P-5 is passed without application of mind.

3. Criticism of Annexure P-7 is founded upon Rule 28-AA of the Income Tax Rules. Learned counsel for the petitioner submits that the application is rejected by holding that the applicant declared very low net profit ratio, which is not at par with similar transport business. It is argued that the respondent no. 2 was competent only to examine the aspect of TDS and had no authority, jurisdiction and competence to look into the aspect of net profit which is within the province of jurisdictional Assessing Officer. By placing reliance on two Division Bench judgments of Delhi High Court in W.P. (C) No. 11877/2023 Shreyash Retail Private Ltd. vs. Deputy Commissioner of Income Tax TDS Circle and Another in W.P. (C) No. 8041/2021 Cloudtail India Private Limited vs. The Commissioner of Income Tax (TDS) Delhi and Another, it is argued that decision taken by the respondent is in complete ignorance of Rule 28-AA of the Income Tax Rule. The necessary factors mentioned in Rule 28-AA of the said Rule have not been considered.

4. Shri Siddharth Sharma, learned Junior Standing Counsel for the respondents supported the impugned orders. In support of his submission, he also placed reliance on written submissions. It is submitted that as mentioned in Para-3 of the written submissions, it is the satisfaction of the Assessing Officer (A.O.) whether said certificate is to be issued or not. In order to arrive at a satisfaction, one such important factor is veracity of existing and estimated tax liability of an applicant which is net profit ratio. Thus, net profit ratio was rightly taken into account while passing the impugned order Annexure P-7 and, therefore, no fault can be found in the impugned order Annexure P-7.

5. So far document page 35 and 36 aforesaid are concerned, it is submitted that these documents were never received/served through any mode to the department. Thus, the petitioner cannot claim any browny points on the basis of these two documents.

6. Learned counsel for the parties confined their arguments to the extent indicated above.

7. We have heard learned counsel for the parties at length and perused the record.

8. As noticed above, the parties have taken a diametrically opposite stand regarding furnishing/receiving of document dated 01.04.2023 (Page 35) and 3rd April, 2023 (page 36). We have carefully gone through the pleadings of the petition and do not find any categorical pleading about submission of document dated 3rd April, 2023 in the pleadings. Since specific pleading is absent and parties have taken diametrically opposite stand on submission of these documents, it is clear that the same is a disputed question of fact. Since disputed question of fact cannot be gone into in a writ petition, we are unable to give any finding based upon the aforesaid two documents.

9. Before dealing with the remaining contention of the parties, it is apposite to quote Rule 28 AA of the Income Tax Rules. The same reads as under:

“28AA. (1) Where the Assessing Officer, on an application made by a person under sub-rule (1) of