Section 197 Nil-TDS Rejection Based on Proposed SLP Invalid | HC

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  • Last Updated on 12 March, 2026

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Section 197 nil TDS certificate

Case Details: Godaddy.Com LLC vs. Assistant/Deputy Commissioner of Income-tax, International Taxation - [2026] 184 taxmann.com 4 (Delhi)

Judiciary and Counsel Details

  • Dinesh Mehta & Vinod Kumar, JJ.
  • Sachit Jolly, Sr. Adv., Abhyudaya Shankar & Mayank Chaturvedi, Advs. for the Petitioner.
  • Siddhartha Sinha, SSC & Ms Easha Gurung, JSC for the Respondent.

Facts of the Case

The petitioner was engaged in the business of providing domain name services, including domain name registration, web hosting, web designing, SSL certification, etc. It filed an application under section 197 for a certificate of nil rate of tax for the assessment year 2026-27.

The Competent Authority (CA) rejected the petitioner’s application under section 197. The rejection was based on the ground that the Department proposed to file an SLP against an earlier Delhi High Court judgment, which had already held that domain registration charges were not taxable in India under the Act read with the India-USA DTAA.

Aggrieved by the order, the petitioner filed a writ petition to the Delhi High Court.

High Court Held

The High Court held that the CA had an obligation to decide the application in accordance with the Act’s provisions, while taking into account the treaties between the two countries. He should not be driven or swayed by revenue targets or considerations. However, the CA rejected the application only because the Department proposed to file an SLP against an earlier High Court judgment. No other reason was mentioned in the order.

The Court held that the reason mentioned by the CA cannot be said to be a reason in the eyes of the law, much less a plausible or sustainable one. The mindset of the authority, for whom revenue collection appears to be the sole objective, was unraveled by the order.

Since no reason was assigned other than the bald assertion that the Department was proposing to file an SLP against the order of the High Court, and the limitation of filing an SLP had passed, the impugned order could not be sustained. Thus, the impugned order and consequential certificate were quashed, and the authority was directed to issue a certificate at a ‘nil’ rate.

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied