The Assessing Officer has taxed my client, a UK limited liability partnership, under the Independent Personal Services Article of the treaty because its partners are professionals. Can that Article apply to a firm at all?
No, on this Tribunal's view. The Mumbai Tribunal held that Article 15 of the India-United Kingdom DTAA deals only with the taxability of independent personal services or independent activity of a similar character and not with a partnership firm, and that the assessee, not being an individual, was outside it. On the same order the Tribunal also held, following its own decisions in the assessee's earlier years, that the remuneration received for providing legal services was not fees for technical services and that the treaty overrode the Act.
Decided by the ITAT (B.R. Baskaran, Accountant Member and Kavitha Rajagopal, Judicial Member) on 2023-02-22, reported as ITA Nos. 1256/Mum/2021 and 1257/Mum/2021, Income Tax Appellate Tribunal, 'I' Bench, Mumbai; assessment year 2016-17. The treaties construed are the Double Taxation Avoidance Agreement between INDIA and the UNITED KINGDOM — Articles 4, 5, 7, 13 and 15 — and the Double Taxation Avoidance Agreement between INDIA and SINGAPORE — Article 12. The Article 15 holding is in ITA No. 1256/Mum/2021, the Linklaters LLP (United Kingdom) appeal.. It bears on section DTAA art 15, section DTAA art 13, section DTAA art 12, section DTAA art 5, section DTAA art 7, section DTAA art 4, section 9(1)(vii), section 90, section 90(2), section 144C of the Income Tax Act 1961, in Assessment & Scrutiny and How Tax Law Is Read matters.
Article 15 is the Article an Assessing Officer reaches for when a foreign professional firm earns Indian-source fees and no permanent establishment can be shown, because the Independent Personal Services Article in several Indian treaties has a fixed base or a days-of-presence trigger that is easier to satisfy than Article 5. This order shuts that route where the assessee is a firm rather than an individual, which is the ordinary case for a law firm, an accountancy partnership or a consulting LLP. Two cautions. First, the Article numbering: Independent Personal Services is Article 15 in the India-UK treaty, and the same subject is at Article 14 or Article 15 depending on the treaty, so check the number before you plead it. Second, this is a Tribunal decision following the assessee's own earlier years, and the reasoning is short: the Revenue is recorded as having failed to controvert the assessee's contentions. It is useful as the answer to a first-instance officer, not as a settled proposition. The companion holding is equally practical — that the receipts for legal services on projects concerning non-Indian law were not fees for technical services, so that s.9 did not apply and the treaty prevailed. The order also covers a Singapore group entity under the India-Singapore treaty on the same lines.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The first appellant is Linklaters LLP, a limited liability partnership incorporated in the United Kingdom, which provides legal services; the second is Linklaters Singapore Pte Ltd., a group entity. For assessment year 2016-17 the assessments were completed under s.143(3) read with s.144C(13) following draft orders and directions of the Dispute Resolution Panel, and the receipts from legal services were brought to tax. The grounds before the Tribunal raised, among others, entitlement to the benefit of the INDIA-UK and INDIA-SINGAPORE treaties under the residence Article, whether the receipts were fees for technical services under Article 13 of the India-UK treaty and Article 12 of the India-Singapore treaty, whether there was a permanent establishment in India under Article 5, the consequence under Article 7(1) if there was none, and whether Article 15 of the India-UK treaty, dealing with independent personal services, could apply to a partnership firm. The Tribunal had decided the same issues in the assessee's favour in its own earlier years.
Both appeals were allowed. On the Article 15 ground, the Tribunal held that Article 15 of the INDIA-UK DTAA is dealt with only for taxability of independent personal services or independent activity of similar character and not for the assessee which is a partnership firm, and allowed the ground (para 27). On the fees for technical services ground, following its decisions for assessment years 2013-14 and 2015-16, it held that s.9 did not apply to the assessee in relation to fees for technical services, that the assessee was entitled to the benefit of the treaty, that the Revenue had failed to prove that the receipts were fees for technical services, and that the treaty provisions override the Act, so that the remuneration for providing legal services was not fees for technical services; the ground and its related grounds were allowed (paras 17 and 18).
The Tribunal proceeded on the footing that the same issues had been decided in the assessee's own case for assessment years 2013-14 and 2015-16 and that the Revenue had failed, in the year in dispute, to controvert the assessee's contentions or to displace those findings (paras 17 and 18). On Article 15 it reiterated the earlier reasoning that the Article is confined to the taxability of independent personal services or independent activity of a similar character, and that the assessee, being a partnership firm and not an individual, is outside its scope (para 27).
The Tribunal has reiterated that Article 15 of India-UK DTAA is dealt with only for taxability of independent personnel services or independent activity of similar character and not for the assessee which is a partnership firm.
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Handle my notice → Ask a CA on WhatsAppNo, on this Tribunal's view. The Mumbai Tribunal held that Article 15 of the India-United Kingdom DTAA deals only with the taxability of independent personal services or independent activity of a similar character and not with a partnership firm, and that the assessee, not being an individual, was outside it. On the same order the Tribunal also held, following its own decisions in the assessee's earlier years, that the remuneration received for providing legal services was not fees for technical services and that the treaty overrode the Act. This was decided by the ITAT (B.R. Baskaran, Accountant Member and Kavitha Rajagopal, Judicial Member) and bears on section DTAA art 15, section DTAA art 13, section DTAA art 12, section DTAA art 5, section DTAA art 7, section DTAA art 4, section 9(1)(vii), section 90, section 90(2), section 144C of the Income Tax Act 1961. It is reported as ITA Nos. 1256/Mum/2021 and 1257/Mum/2021, Income Tax Appellate Tribunal, 'I' Bench, Mumbai; assessment year 2016-17. The treaties construed are the Double Taxation Avoidance Agreement between INDIA and the UNITED KINGDOM — Articles 4, 5, 7, 13 and 15 — and the Double Taxation Avoidance Agreement between INDIA and SINGAPORE — Article 12. The Article 15 holding is in ITA No. 1256/Mum/2021, the Linklaters LLP (United Kingdom) appeal.. Article 15 is the Article an Assessing Officer reaches for when a foreign professional firm earns Indian-source fees and no permanent establishment can be shown, because the Independent Personal Services Article in several Indian treaties has a fixed base or a days-of-presence trigger that is easier to satisfy than Article 5. This order shuts that route where the assessee is a firm rather than an individual, which is the ordinary case for a law firm, an accountancy partnership or a consulting LLP. Two cautions. First, the Article numbering: Independent Personal Services is Article 15 in the India-UK treaty, and the same subject is at Article 14 or Article 15 depending on the treaty, so check the number before you plead it. Second, this is a Tribunal decision following the assessee's own earlier years, and the reasoning is short: the Revenue is recorded as having failed to controvert the assessee's contentions. It is useful as the answer to a first-instance officer, not as a settled proposition. The companion holding is equally practical — that the receipts for legal services on projects concerning non-Indian law were not fees for technical services, so that s.9 did not apply and the treaty prevailed. The order also covers a Singapore group entity under the India-Singapore treaty on the same lines. If it applies to you, the first step is this: Identify the exact Article number for Independent Personal Services in YOUR treaty before responding; it is Article 15 in the India-UK treaty and is numbered differently in others.
The first appellant is Linklaters LLP, a limited liability partnership incorporated in the United Kingdom, which provides legal services; the second is Linklaters Singapore Pte Ltd., a group entity. For assessment year 2016-17 the assessments were completed under s.143(3) read with s.144C(13) following draft orders and directions of the Dispute Resolution Panel, and the receipts from legal services were brought to tax. The grounds before the Tribunal raised, among others, entitlement to the benefit of the INDIA-UK and INDIA-SINGAPORE treaties under the residence Article, whether the receipts were fees for technical services under Article 13 of the India-UK treaty and Article 12 of the India-Singapore treaty, whether there was a permanent establishment in India under Article 5, the consequence under Article 7(1) if there was none, and whether Article 15 of the India-UK treaty, dealing with independent personal services, could apply to a partnership firm. The Tribunal had decided the same issues in the assessee's favour in its own earlier years. The matter was decided on 2023-02-22 by the ITAT (B.R. Baskaran, Accountant Member and Kavitha Rajagopal, Judicial Member). On those facts the ITAT held as follows. Both appeals were allowed. On the Article 15 ground, the Tribunal held that Article 15 of the INDIA-UK DTAA is dealt with only for taxability of independent personal services or independent activity of similar character and not for the assessee which is a partnership firm, and allowed the ground (para 27). On the fees for technical services ground, following its decisions for assessment years 2013-14 and 2015-16, it held that s.9 did not apply to the assessee in relation to fees for technical services, that the assessee was entitled to the benefit of the treaty, that the Revenue had failed to prove that the receipts were fees for technical services, and that the treaty provisions override the Act, so that the remuneration for providing legal services was not fees for technical services; the ground and its related grounds were allowed (paras 17 and 18).
The Tribunal proceeded on the footing that the same issues had been decided in the assessee's own case for assessment years 2013-14 and 2015-16 and that the Revenue had failed, in the year in dispute, to controvert the assessee's contentions or to displace those findings (paras 17 and 18). On Article 15 it reiterated the earlier reasoning that the Article is confined to the taxability of independent personal services or independent activity of a similar character, and that the assessee, being a partnership firm and not an individual, is outside its scope (para 27). In the words reproduced by the source cited on this page: "The Tribunal has reiterated that Article 15 of India-UK DTAA is dealt with only for taxability of independent personnel services or independent activity of similar character and not for the assessee which is a partnership firm." The decision followed or applied The Tribunal's own orders in the assessee's case for assessment years 2013-14 and 2015-16 — followed.
It was decided by the ITAT on 2023-02-22 and is reported as ITA Nos. 1256/Mum/2021 and 1257/Mum/2021, Income Tax Appellate Tribunal, 'I' Bench, Mumbai; assessment year 2016-17. The treaties construed are the Double Taxation Avoidance Agreement between INDIA and the UNITED KINGDOM — Articles 4, 5, 7, 13 and 15 — and the Double Taxation Avoidance Agreement between INDIA and SINGAPORE — Article 12. The Article 15 holding is in ITA No. 1256/Mum/2021, the Linklaters LLP (United Kingdom) appeal.. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section DTAA art 15, section DTAA art 13, section DTAA art 12, section DTAA art 5, section DTAA art 7, section DTAA art 4, section 9(1)(vii), section 90, section 90(2), section 144C, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. Both appeals were allowed. On the Article 15 ground, the Tribunal held that Article 15 of the INDIA-UK DTAA is dealt with only for taxability of independent personal services or independent activity of similar character and not for the assessee which is a partnership firm, and allowed the ground (para 27). On the fees for technical services ground, following its decisions for assessment years 2013-14 and 2015-16, it held that s.9 did not apply to the assessee in relation to fees for technical services, that the assessee was entitled to the benefit of the treaty, that the Revenue had failed to prove that the receipts were fees for technical services, and that the treaty provisions override the Act, so that the remuneration for providing legal services was not fees for technical services; the ground and its related grounds were allowed (paras 17 and 18). It arises in Assessment & Scrutiny and How Tax Law Is Read matters, on section DTAA art 15, section DTAA art 13, section DTAA art 12, section DTAA art 5, section DTAA art 7, section DTAA art 4, section 9(1)(vii), section 90, section 90(2), section 144C of the Income Tax Act 1961, and was decided by B.R. Baskaran, Accountant Member and Kavitha Rajagopal, Judicial Member. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. If the assessee is a partnership, an LLP or a company, take the point that the Article is confined to an individual, and put the constitution documents on record to establish the status. Run the entitlement question first: whether the entity is a person resident in the other state for the purposes of the residence Article, since the department here also disputed treaty entitlement under Article 4(1)(a). Where the receipt is for legal or advisory work on non-Indian law, plead that it is not fees for technical services under the treaty Article before arguing s.9, and rely on s.90(2) for the treaty to prevail. Where the Tribunal has decided the same issue in the assessee's own earlier years, put those orders on record and require the Assessing Officer to say what he says is different in the year in dispute — that is what carried this order. Deal with the permanent establishment and Article 7 grounds separately even if you win on Article 15; they are distinct routes to the same receipt.
Searched for later treatment; none was found. That is not the same as a source affirming it. Nothing has been found applying this order's holding that Article 15 of the India-UK treaty governs only independent personal services or independent activity of a similar character and cannot be applied to a partnership firm. A caution about apparent citations: most later references carrying this case name are to the earlier Mumbai Bench decision reported as Linklaters LLP v. ITO [2010] 40 SOT 51, which is a different order on a different question, and they are commonly indexed against this one. Two such references have been examined. In General Motors Company (USA) v ACIT (Int. Taxation), ITAT Delhi, 5 September 2024, the Bench relied on 'Linklaters LLP vs. ITO (supra)' at the treaty-residence stage, but the decision relied on is the 2010 order on fiscally transparent entities and Article 4, not the Article 15 holding in this order. In M/s KPMG Assurance and Consulting v DCIT, ITAT Mumbai, 12 August 2024, at paragraph 17.3, the reference is again to [2010] 40 SOT 51 and it sits inside a quoted extract of an earlier Tribunal decision. So a bare count of citing decisions badly overstates the treatment of this order. There are income-tax appeals in Linklaters' own case before the Bombay High Court, but all of them are of 10 and 17 December 2018 and 27 February 2019 and concern earlier assessment years; none touches this order. No appeal against this order and no special leave petition has been found. Treat it accordingly: a Tribunal order for assessment year 2016-17 that follows the assessee's own earlier years, uncited and untested above, and useful as a considered answer at first instance rather than as settled law. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
This entry is deliberately narrow. The order runs to 44 numbered paragraphs, and what is set out here is confined to the Article 15 holding at paragraph 27 and the fees for technical services holding at paragraphs 17 and 18. Paragraphs 1 to 16 are not covered, so the amounts in dispute, the findings on Article 4(1)(a) residence and the findings on Article 5 permanent establishment are not stated in this entry and must not be taken from it. NO MONETARY FIGURES from the order are given here at all, for the same reason. A reader who needs the quantum or the residence reasoning has to go to the order. A locator warning: a passage sometimes attributed to paragraph 26 reads as the Tribunal quoting an earlier year's order in the assessee's own case, so it is not used as a locator here and should not be cited as this Bench's own words. Three points about the weight of what is covered. It is a common order in two appeals — ITA No. 1256/Mum/2021 (Linklaters LLP, United Kingdom), which carries the Article 15 holding, and ITA No. 1257/Mum/2021 (Linklaters Singapore Pte Ltd.) under Article 12 of the India-Singapore treaty. The reasoning is short: the Tribunal proceeded on the footing that the same issues had been decided in the assessee's own case for assessment years 2013-14 and 2015-16 and that the Revenue had failed to controvert the assessee's contentions or to displace those findings. That makes the order useful as the answer to a first-instance officer and weak as a considered construction of the Article. And the Article numbering must be checked before the point is pleaded: Independent Personal Services is Article 15 in the India-UK treaty, but the same subject sits at Article 14 in several other Indian treaties, so a ground drafted from this order will be wrong if it is carried across without checking the treaty in hand. The assessments were completed under s.143(3) read with s.144C(13) after draft orders and directions of the Dispute Resolution Panel, so the route to the Tribunal was the s.144C route and not an appeal from a Commissioner (Appeals). One last caution on the treaty point. The Tribunal's conclusion is that Article 15 is confined to independent personal services or independent activity of a similar character and cannot be applied to a partnership firm because the assessee is not an individual. It does not decide how the Article applies to the individual partners of such a firm, and it does not decide what happens where the treaty in question defines the persons covered by the Article differently. Both questions are open and neither can be answered out of this order. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
Both appeals were allowed. On the Article 15 ground, the Tribunal held that Article 15 of the INDIA-UK DTAA is dealt with only for taxability of independent personal services or independent activity of similar character and not for the assessee which is a partnership firm, and allowed the ground (para 27). On the fees for technical services ground, following its decisions for assessment years 2013-14 and 2015-16, it held that s.9 did not apply to the assessee in relation to fees for technical services, that the assessee was entitled to the benefit of the treaty, that the Revenue had failed to prove that the receipts were fees for technical services, and that the treaty provisions override the Act, so that the remuneration for providing legal services was not fees for technical services; the ground and its related grounds were allowed (paras 17 and 18).
TaxSphere, “Linklaters LLP v ACIT (International Taxation), Mumbai”, https://taxnotice.vittsphere.com/caselaw/case/linklaters-llp-article-15-independent-personal-services-not-a-firm/ (validity last checked 2026-09-08)
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