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The assessee has given contract of executing the works to various persons, making it liable to deduct tax on the rate prescribed under Section 194C of the Act. Eight of the contractors, executing works for the assessee, furnished certificates as contemplated under Section 197 (2) of the Act addressed to Parle Biscuits Pvt. Ltd., Mumbai for deduction of tax on lower rate than the specified in Section 194C of the Act. The assessee made a deduction of tax at the rates so specified in such communications acting on certificates issued by the Assessing Officer of the contractors.

The learned Assessing Officer found that there is short deduction of tax as the Parle Biscuits Pvt. Ltd., Mumbai has a separate Tax Deduction Account Number (TAN) than the Parle Biscuits Pvt. Ltd., Bahadurgarh, which implies that the assessee and Parle Biscuits Pvt. Ltd., Mumbai are separate entities for the purpose of deduction of tax at source. Consequently, passed an order of raising demand against the assessee for the violations of Section 194C of the Act.

In appeal by the assessee, the Commissioner of Income Tax (Appeals), Rohtak returned a finding that since the geniuneness of the issue of certificates under Section 197 of the Act has not been doubted by the Assessing Officer, therefore, there is no justification to hold that the assessee is in default merely on the ground that the said certificate was not issued in the name of Bahadurgarh unit. The said order was affirmed by the Tribunal.

In terms of above said provisions, the Assessing Officer of the contractors have furnished certificate under Section 197 of the Act to the Principal Officer of the Parle Biscuits Pvt Ltd, Mumbai. Such certificate is in terms of clause (iii) of Section 204 of the Act. Such certificate mandates the persons to whom such certificate is issued to deduct tax at a rate lower than the prescribed rate under Section 194C of the Act. Merely because the assessee has got separate TAN for Bahadurgarh unit and for Mumbai unit, will not render the certificate issued under Section 197(2) as redundant. Such certificate is to be issued to the Principal Officer of the Company as the person responsible for deduction of tax and not to any other person or unit of the assessee. Therefore, the order passed by the Commissioner of Income Tax (Appeals) Rohtak and affirmed by the Tribunal cannot be said to be suffering from any illegality in any manner.