What To Do If The A.O Does Not Respond To Your Application For Lower Deduction Certificate?

The deliberate inaction by the A.O on an application made by the assessee for certificate u/s 197 is very unfortunate . The provision under section 197 does not give any discretion to sit on the application because the provison uses the word "shall " . Read the provision u/s 197

197. (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 194J194K 194LAand 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.

Therefore, inaction in not giving any order is an illegal act. You should write to the A.O that in case he does not dispose off the application with in seven days from the receipt of reminder, you will be constrained to apply before Add.Commissioner/JtCIT concerned. If even ADCIT/JCIT does not give you relief after seven days , write to Commissioner of the charge.

After failing even from that level ,following remedy lies for you
1. File an application with the grievance cell ,stating the full facts. The grievance cell is a mechanism whose data goes to CBDT and even chief commissioner of income tax are accountable for its disposal.

2. A softer approach is to write to CIT concerned and if he does not respond writing to his superior enclosing the proof of filing application with him.
3. As far as jurisdiction of ombudsman is concerned , there is no specific mention of such wrong doing within the purview of him, still there is clause "O" of section 9 of The Income Tax Ombudsman Guidelines 2006 which says
"9 . Grounds on which complaint shall be filed
i. (o) any other matter relating to violation of the administration instruction and circulars issued by the Central Board Of Direct Taxes in relation to income tax administration"

In this regard , circular no 774 dated 17.3.1999 is important to refer. The said circular warns A.Os , not issue the certificate u/s 197 in case where payment has already been done and TDS is made. But the point to be noted is that the said circular states under point 3 circumastances when the certificate should not be issued. In other words , in all other cases not falling under the condition mentioned in the circular , should be issued by the A.O.So, you can file application under clause (o) of Section 9 of The Income Tax Ombudsman Guidelines 2006. The said circular is as under

Circular No: 774, Date of Issue: 17/3/1999
Subject: Issue of certificate under section 197(1) of the I. T. Act.

Section 197(1) of the Act envisages that, where tax is deductible at source in terms of sections 192, 193, 194, 194A, 194D, 194-I, 194K and 195 of the Income-tax Act, and the recipient justifies the deduction of tax at any lower rate or no deduction of tax to the satisfaction of the Assessing Officer, the Assessing Officer shall issue an appropriate certificate. It has come to the notice of the Board that in certain charges a practice has developed to issue certificates under section 197(1) of the Income-tax Act even after the credit or payment of amounts subject to tax deduction at source. This is not in accordance with the provisions of law. It is, therefore, clarified that the certificate issued under section 197(1) of the Income-tax Act will be applicable only in respect of credit or payments, as the case may be, subject to tax deduction at source, made on or after the date of such certificate. Therefore, no certificate under section 197(1) of the Income-tax Act should be issued after the amounts subject to tax deduction at source stand credited or paid, whichever is earlier. In other words, henceforth application requesting for certificate under section 197(1) should not be acted upon if submitted after credit/payment of the amount subject to tax deduction at source. However, assessees having genuine hardship in submitting such applications on time may refer to the Board for condonation of delay in terms of section 119(2)(b) of the Income-tax Act.

(Sd.) Narottam Mishra, Deputy Secretary (Budget). [F. No. 275/98-IT(B)]

4. Another remedy is to amke an application under Right to Information Act. These days A.Os have been made Public Information officer and Jt.CIT/Add.CIT as CPIO. You can ask the A.O under RTI the reasons why no order for granting or rejecting the certificate was issued on your application. Since there is time limit within which a reply is to be given , something will move from otherwise inefficent official