MakeMyTrip (India) Pvt. Ltd. vs. Assistant Commissioner of Income Tax, Circle-75(1), Delhi & Anr., Delhi High Court, W.P.(C) 11956/2025 & CM APPL. 65195/2025, Decided on 16th March 2026

The Delhi High Court quashed an order passed under Section 197 of the Income Tax Act rejecting MakeMyTrip’s application for a lower or nil rate of tax withholding, holding that such an order must be a reasoned and speaking order passed in compliance with the parameters laid down in Rule 28AA of the Income Tax Rules, 1962. The impugned order was a non-reasoned, one-line rejection based solely on the existence of an outstanding demand against the petitioner without providing any justification for the departure from a consistent practice of granting such certificates in previous years under similar facts and under the same contract. The Court held that such a mechanical and non-speaking rejection is arbitrary, violates the principles of natural justice, and is liable to be quashed.

The Court addressed and rejected two specific contentions raised by the respondents. First, the Revenue argued that since the impugned order was passed by the DCIT (TDS), Gurugram, the Delhi High Court lacked territorial jurisdiction to entertain the petition. The Division Bench rejected this argument, noting that although the impugned order was issued from Gurugram, it was addressed to the petitioner’s Delhi office, and crucially, the certificates for all previous assessment years and the subsequent rectification orders had been issued by TDS Circle 75(1) in Delhi, establishing a clear nexus with the Delhi jurisdiction. Second, the Revenue relied on the outstanding demand to justify the refusal, but the Court found this wholly insufficient as a standalone reason the mere existence of a demand, without any analysis of whether it was disputed, stayed, or otherwise addressed, and without explaining why the consistent prior practice of granting such certificates was being departed from in the current year, could not form the basis of a valid order under Section 197. The Court accordingly set aside the impugned order and remanded the matter back to the Assessing Officer with a direction to pass a fresh, reasoned, and speaking order within two weeks, after duly considering the parameters under Rule 28AA, the petitioner’s submissions, and the consistent practice adopted in previous assessment years under similar facts. The ruling reinforces the principle that tax withholding orders under Section 197, though provisional in character, must be grounded in reason and cannot depart from established prior positions without cogent explanation arbitrary and non-speaking orders, however brief the form they take, are not insulated from judicial review.