notification no. 02 /2023 procedure format and standards for filling an application for grant of certificate under sub rule 4 and its proviso of rule 28aa of income tax rules 1962 for deduction of income tax at any lower rate or no deduction of income tax

F. No. CPC(TDS)/ 197 Certificate/Annex-11/2023-24 Government of India Ministry of Finance Central Board of Direct Taxes Directorate of Income-tax (Systems) New Delhi Notification No.02/2023 New Delhi, the 27th September, 2023 Subject: - Procedure, format and standards for filling an application for grant of certificate under sub-rule (4) and its proviso of Rule 28AA of Income Tax Rules, 1962, for deduction of Income-tax at any lower rate or no deduction of Income-tax under sub-section (I) of section 197 of the Income-tax Act, 1961 through TRACES-reg.

1. As per sub-section (I) of section 197 of the Income-tax Act, 1961(the Act), 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, 1940, 194G, 194H, 194-1, 194J, 194K, 194LA, [194L8A]' 194L88, 194L8C, 194M, 194-0 and 195, if 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.

2. Rule 28 of the Income-tax Rules, 1962 provides for filing an application for grant of certificate for deduction of Income-tax at any lower rate or no deduction of Income-tax under sub-section (I) of section 197 of the Act to be made in Form No. 13 electronically in accordance with the procedures, formats and standards for ensuring secure capture and transmission of data and uploading of documents to be laid down by the Principal Director General of Income-tax (Systems).

3. Proviso to sub-rule (4) of Rule 28AA of the Income Tax Rules, 1962, provides for issuance of certificate for deduction of tax at lower rate, to the person making such application authorizing him to receive income or sum after deduction of tax at lower rate, in cases, where the number of persons

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F, No, CPC(TDS)/ 197 Certificate/Annex-11/2023-24 responsible for deducting the tax is likely to exceed one hundred and the details of such persons are not available at the time of making application with the person making such application, Sub-rule (6) of Rule 28AA of the Income-tax Rules, 1962, empowers the Director General of Income-tax (Systems) to lay down procedures, formats and standards for issuance of certificates under proviso to sub-rule (4) of Rule 28AA of the Income Tax Rules, 1962,

4. In exercise of the powers conferred under sub-rule (2) of Rule 28 & sub- rule (6) of 28AA of the Income-tax Rules, 1962, the Director General of Income- tax (Systems) hereby specifies the procedure, format and standards for the purpose of electronic filing of Form 13 with Annexure - II and generation of certificate under sub-section (1) of section 197 r,w, proviso to sub-rule(4) of Rule 28AA of Income Tax Rules, 1962 through TRACES as per procedure in the succeeding paragraphs which will be applicable from 01.10,2023,

5. Procedure for electronic filling of Form 13 with annexure-II shall be as follows:

5.1 For making an application in Form 13 with Annexure II the tax- payerjDeductee shall login into the TRACES website (www,tdscpc,gov.in), for grant of certificate for deduction of Income-tax at any lower rate or no deduction of Income-tax under sub-section (1) of Section 197 of the Income- tax Act, 1961.

5.2 The tax-payer jDeductee who is not registered at TRACES website shall have to first register with his Permanent Account Number ("PAW) at TRACES (www,tdscpc,gov.in) for login and filling application in Form 13 along-with Annexure II, Detailed procedure for registration can be accessed through the link https:llcontents, tdscpc,gov.inl en I taxpayer-registration-Iogin- etutorial.html

5.3 The tax-payerjDeductee shall login at TRACES website (www,tdscpc.gov.in) and submit the Form No. 13 along-with Annexure II with supporting documents using any of the following,

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F. No. CPC(TDS)/ 197 Certificate/Annex-11/2023-24

• (i) Digital Signature,
• (ii) Electronic Verification Code,
• (iii) Aadhar based Au thentication,
• (iv) Mobile OTP.

5.4 Applicants accessing TRACES website from outside of India shall login at TRACES website (www.nriservices.tdscpc.gov.in) and submit application in Form No. 13 along with supporting documents using Digital Signature only.

5.5 The applicant can track the status of the application through option 'Track Request for Form13/ lSC/ lSD' under the tab ·Statements/Forms'.

6. Procedure for assignment of application to the TDS Assessing Officer (AO):

6.1 The application will be assigned to the TDS AO on the basis of details furnished by the applicant in Form 13. Such applications can be accessed by the AO through the path 'AO Loqin->LowerINo Deduction Certificate-> Generate Certificate->Certificate ul s 197f111206C (9)-> Open Request (5)'.

6.2 For application filed in Delhi, Mumbai, Chennai, Kolkata, Bangalore, Hyderabad, Ahmedabad and Pune, cases where revenue forgone exceeds a sum of Rs. 50 Lakh, the applications shall be assigned to the DCIT / ACIT exercising jurisdiction over TDS matters, and in other cases, the applications shall be assigned to the ITO exercising jurisdiction over TDS matters. If the jurisdiction orders are otherwise, the applications shall be assigned in accordance to such jurisdiction orders.

6 .3 For application filed in remaining cities/townsfjurisdictions, the application where revenue foregone exceeds a sum of Rs. 10 Lakh, application shall be assigned to the DCIT / ACIT exercising jurisdiction over TDS matters, and in other cases, the applications shall be assigned to the ITO exercising jurisdiction over TDS matters. If the jurisdiction orders are otherwise, the applications shall be assigned in accordance to such jurisdiction orders.

6.4 Once the application in form 13 has been successfully submitted, the following data will be obtained by CPC-TDS:

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6.5 F. No. CPC(TDS)/ 197 Certificate/Annex-11/2023-24

• (i) Processed dat~ of Income Tax Returns of previous 4 financial years (if available) .
• (ii) PAN Demand.
• (iii) E-filed Income-Tax Returns of previous 4 fmancial years.
• (iv) Audit Report (along with form 3CD if accounts are audited) of previous 4 financial years.
• (v) Assessment Orders of previous 4 financial years (if available).

The applications shall be assigned to the TDS AO exercising jurisdiction over TDS matters in respect of the applicant as explained in para 6.2 and 6.3. However, if the jurisdiction orders are otherwise, the assigned AO can transfer the applications to the AO concerned on AO Portal.

7 Processing of the tax-payer /Deductee's request by the AO, Range Heads and Commissioners of Income-tax:

7.1 Role of AO:

The AO shall process the application through TRACES-AO Portal after login using his/her credentials.

7.1.1 By navigating through the Certiticate>Generate Certiticate> Certificate path 'LowerlNo Deduction us/197(1 V206C (9) and select 'Open Request (s)', the AO shall be able to access following information:

• (i) Information furnished by the tax-payer /Deductee.
• (ii) Documents submitted by the tax-payer /Deductee.
• (iii) Information essential for processing the request in respect of the tax- payer/Deductee, as received from other modules.
• (iv) Information essential for processing the request in respect of the tax- payer/Deductee, as available at CPC(TDS).
• (v) Information about the history of previous TAN less certificate issued to the applicant where the number of deductors who consumed the said certificate did not reach up to 100 during the last financial year, if available.