The AO says my Mauritius holding structure is treaty shopping. Is my TRC enough to answer that?
It is enough unless the officer rebuts it with evidence. The TRC is statutory evidence of residential status, so the burden is on the Assessing Officer to displace it with cogent material; holding the assessee to be treaty shopping on suspicion and inferences did not meet that standard, and the Article 13(4) exemption was allowed.
Decided by the ITAT (Income Tax Appellate Tribunal, Delhi Bench 'D' - G.S. Pannu (Vice President) and Anubhav Sharma (Judicial Member)) on 2024-07-26, reported as [2024] 165 taxmann.com 16 (Delhi - Trib.) / [2024] 115 ITR(T) 516 (Delhi - Trib.); IT Appeal No. 2345 (Delhi) of 2023; AY 2020-21. It bears on section 90, section 9(1)(i), section 112 of the Income Tax Act 1961, in Residence & Treaty Benefit matters.
The practical value is the burden, not a declaration that a TRC is unanswerable — the Tribunal treated the certificate as carrying definite evidentiary weight while stopping short of calling it conclusive. That framing is what you use when an officer denies treaty benefit by describing a group structure and calling the conclusion obvious. The Tribunal declined to apply substance-over-form to override the treaty on these facts, and made two findings that did the work: the management structure was located in Mauritius, and the proportion of investment directed to India was not such as to show the entity existed only to reach the treaty.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee was a private company incorporated in Mauritius in 2014 as an investment platform, holding a tax residency certificate from the Mauritius Revenue Authority. It held shares in Etechaces Marketing and Consulting Pvt. Ltd., the Indian company behind Policybazaar. For assessment year 2020-21 it sold 1,581 shares acquired on 13 October 2017 and offered the gain to tax at ten per cent, paying about Rs. 40.427 crores, and claimed exemption under Article 13(4) of the India-Mauritius treaty on the gain from 9,013 shares acquired earlier. The Assessing Officer denied the treaty benefit, holding that the Mauritius establishment had no commercial rationale beyond exploiting the treaty and that the assessee was a conduit engaged in treaty shopping; he pointed to a shared lease from a service provider, 99.8 per cent ownership by a Cayman Islands limited partnership, correspondence conducted only with the US-resident director, an absence of evidence of director remuneration, nominal expenses and no tax paid in Mauritius, and the remittance of sale proceeds to shareholders in the Cayman Islands and the United States. The Dispute Resolution Panel upheld him.
The appeal was allowed and the denial of treaty benefits was set aside. The Tribunal held that circulars 682 of 1994 and 789 of 2000, with Azadi Bachao Andolan and Vodafone, establish that a tax residency certificate is statutory evidence of residential status, and that even if it is not conclusive the onus shifts to the Assessing Officer to show by evidence that, beyond holding the certificate, the entity is a conduit created and run for treaty shopping (para 10). It was careful to add that merely holding a certificate gives the assessee no absolute immunity and that it had to examine how far the Assessing Officer had succeeded in rebutting it (para 11). On the material it found the assessee controlled and managed from Mauritius, with an office, employees, audited accounts, a majority-Mauritian board of qualified professionals, board minutes and share purchase agreements executed by the Mauritian directors, and held that the authorities had failed to rebut the certificate with cogent evidence and had proceeded on suspicion and inference (paras 12 to 19). Being a dropdown entity of Cayman Islands entities did not taint the activity, and substance over form could not be stretched that far (para 20). Note what was not decided: the Tribunal sustained grounds 5 and 6 only, and recorded that the remaining grounds either became academic or were consequential and were left open (para 22).
The route is evidentiary rather than doctrinal. The Tribunal took the certificate as statutory evidence of residence, which shifts the onus to the Assessing Officer, and then tested the Assessing Officer's material against it. It found the assessee had an office in Mauritius where its records were kept, employees there, returns filed and taxes paid in Mauritius, a board of two Mauritian residents and one United States resident meeting physically in Mauritius, directors with substantial professional qualifications, sole board authority over investment and divestment including the decision to sell the Policybazaar shares, board minutes on record and share purchase agreements executed by the Mauritian directors. Against that, the department's points were treated as inference: that the assessee had no funds of its own followed from its nature as an investment platform, and that gains were passed to those who had invested was what such a platform does. Association with Cayman Islands entities did not by itself taint genuine activity, and the small proportion of the fund invested in India, some 3.54 per cent at the outset rising to 5.57 per cent by 2018, told against the treaty shopping inference. The Tribunal did not adopt the wider proposition put to it by senior counsel from the Delhi High Court in Blackstone Capital Partners, that a certificate is statutorily the only evidence required; that appears in the order as the assessee's argument at para 6.2, and the Bench's own formulation at paras 10 and 11 is deliberately narrower. Nor does the order consider Chapter X-A.
Thus for merely holding the TRC, the assessee cannot claim absolute immunity and we have to examine how far AO succeeded to rebut the statutory evidence of TRC.
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Handle my notice → Ask a CA on WhatsAppIt is enough unless the officer rebuts it with evidence. The TRC is statutory evidence of residential status, so the burden is on the Assessing Officer to displace it with cogent material; holding the assessee to be treaty shopping on suspicion and inferences did not meet that standard, and the Article 13(4) exemption was allowed. This was decided by the ITAT (Income Tax Appellate Tribunal, Delhi Bench 'D' - G.S. Pannu (Vice President) and Anubhav Sharma (Judicial Member)) and bears on section 90, section 9(1)(i), section 112 of the Income Tax Act 1961. It is reported as [2024] 165 taxmann.com 16 (Delhi - Trib.) / [2024] 115 ITR(T) 516 (Delhi - Trib.); IT Appeal No. 2345 (Delhi) of 2023; AY 2020-21. The practical value is the burden, not a declaration that a TRC is unanswerable — the Tribunal treated the certificate as carrying definite evidentiary weight while stopping short of calling it conclusive. That framing is what you use when an officer denies treaty benefit by describing a group structure and calling the conclusion obvious. The Tribunal declined to apply substance-over-form to override the treaty on these facts, and made two findings that did the work: the management structure was located in Mauritius, and the proportion of investment directed to India was not such as to show the entity existed only to reach the treaty. If it applies to you, the first step is this: Produce the TRC and then ask the officer, in writing, to identify the specific evidence relied on to displace it, so that the burden is visibly where the Tribunal put it.
The assessee was a private company incorporated in Mauritius in 2014 as an investment platform, holding a tax residency certificate from the Mauritius Revenue Authority. It held shares in Etechaces Marketing and Consulting Pvt. Ltd., the Indian company behind Policybazaar. For assessment year 2020-21 it sold 1,581 shares acquired on 13 October 2017 and offered the gain to tax at ten per cent, paying about Rs. 40.427 crores, and claimed exemption under Article 13(4) of the India-Mauritius treaty on the gain from 9,013 shares acquired earlier. The Assessing Officer denied the treaty benefit, holding that the Mauritius establishment had no commercial rationale beyond exploiting the treaty and that the assessee was a conduit engaged in treaty shopping; he pointed to a shared lease from a service provider, 99.8 per cent ownership by a Cayman Islands limited partnership, correspondence conducted only with the US-resident director, an absence of evidence of director remuneration, nominal expenses and no tax paid in Mauritius, and the remittance of sale proceeds to shareholders in the Cayman Islands and the United States. The Dispute Resolution Panel upheld him. The matter was decided on 2024-07-26 by the ITAT (Income Tax Appellate Tribunal, Delhi Bench 'D' - G.S. Pannu (Vice President) and Anubhav Sharma (Judicial Member)). On those facts the ITAT held as follows. The appeal was allowed and the denial of treaty benefits was set aside. The Tribunal held that circulars 682 of 1994 and 789 of 2000, with Azadi Bachao Andolan and Vodafone, establish that a tax residency certificate is statutory evidence of residential status, and that even if it is not conclusive the onus shifts to the Assessing Officer to show by evidence that, beyond holding the certificate, the entity is a conduit created and run for treaty shopping (para 10). It was careful to add that merely holding a certificate gives the assessee no absolute immunity and that it had to examine how far the Assessing Officer had succeeded in rebutting it (para 11). On the material it found the assessee controlled and managed from Mauritius, with an office, employees, audited accounts, a majority-Mauritian board of qualified professionals, board minutes and share purchase agreements executed by the Mauritian directors, and held that the authorities had failed to rebut the certificate with cogent evidence and had proceeded on suspicion and inference (paras 12 to 19). Being a dropdown entity of Cayman Islands entities did not taint the activity, and substance over form could not be stretched that far (para 20). Note what was not decided: the Tribunal sustained grounds 5 and 6 only, and recorded that the remaining grounds either became academic or were consequential and were left open (para 22).
The route is evidentiary rather than doctrinal. The Tribunal took the certificate as statutory evidence of residence, which shifts the onus to the Assessing Officer, and then tested the Assessing Officer's material against it. It found the assessee had an office in Mauritius where its records were kept, employees there, returns filed and taxes paid in Mauritius, a board of two Mauritian residents and one United States resident meeting physically in Mauritius, directors with substantial professional qualifications, sole board authority over investment and divestment including the decision to sell the Policybazaar shares, board minutes on record and share purchase agreements executed by the Mauritian directors. Against that, the department's points were treated as inference: that the assessee had no funds of its own followed from its nature as an investment platform, and that gains were passed to those who had invested was what such a platform does. Association with Cayman Islands entities did not by itself taint genuine activity, and the small proportion of the fund invested in India, some 3.54 per cent at the outset rising to 5.57 per cent by 2018, told against the treaty shopping inference. The Tribunal did not adopt the wider proposition put to it by senior counsel from the Delhi High Court in Blackstone Capital Partners, that a certificate is statutorily the only evidence required; that appears in the order as the assessee's argument at para 6.2, and the Bench's own formulation at paras 10 and 11 is deliberately narrower. Nor does the order consider Chapter X-A. In the words reproduced by the source cited on this page: "Thus for merely holding the TRC, the assessee cannot claim absolute immunity and we have to examine how far AO succeeded to rebut the statutory evidence of TRC."
It was decided by the ITAT on 2024-07-26 and is reported as [2024] 165 taxmann.com 16 (Delhi - Trib.) / [2024] 115 ITR(T) 516 (Delhi - Trib.); IT Appeal No. 2345 (Delhi) of 2023; AY 2020-21. 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 90, section 9(1)(i), section 112, 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. The appeal was allowed and the denial of treaty benefits was set aside. The Tribunal held that circulars 682 of 1994 and 789 of 2000, with Azadi Bachao Andolan and Vodafone, establish that a tax residency certificate is statutory evidence of residential status, and that even if it is not conclusive the onus shifts to the Assessing Officer to show by evidence that, beyond holding the certificate, the entity is a conduit created and run for treaty shopping (para 10). It was careful to add that merely holding a certificate gives the assessee no absolute immunity and that it had to examine how far the Assessing Officer had succeeded in rebutting it (para 11). On the material it found the assessee controlled and managed from Mauritius, with an office, employees, audited accounts, a majority-Mauritian board of qualified professionals, board minutes and share purchase agreements executed by the Mauritian directors, and held that the authorities had failed to rebut the certificate with cogent evidence and had proceeded on suspicion and inference (paras 12 to 19). Being a dropdown entity of Cayman Islands entities did not taint the activity, and substance over form could not be stretched that far (para 20). Note what was not decided: the Tribunal sustained grounds 5 and 6 only, and recorded that the remaining grounds either became academic or were consequential and were left open (para 22). It arises in Residence & Treaty Benefit matters, on section 90, section 9(1)(i), section 112 of the Income Tax Act 1961, and was decided by Income Tax Appellate Tribunal, Delhi Bench 'D' - G.S. Pannu (Vice President) and Anubhav Sharma (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. Put the location of management and decision-making on record with contemporaneous material rather than assertions, since that was one of the two findings that defeated the allegation. Show the proportion of the entity's total investment directed to India, which is the answer to a claim that it exists only to access the treaty. Do not rest solely on the certificate where the officer has produced actual material; the decision turns on the absence of such material, not on the certificate being unanswerable.
Searched for later treatment; none was found. That is not the same as a source affirming it. Downgraded from overruled after reading the order. No later decision has been found applying, following or affirming it, so it cannot be certified as good law either. On the risk, the position is more precise than this entry previously stated. The Supreme Court in Authority for Advance Rulings (Income-tax) v. Tiger Global International II Holdings [2026] 182 taxmann.com 375 / [2026] 485 ITR 214 (SC), decided 15 January 2026 (J.B. Pardiwala and R. Mahadevan, JJ., Civil Appeals Nos. 262 to 264 of 2026), held that after the insertion of s.90(2A), ss.90(4) and (5) and Chapter X-A, and Article 27A of the treaty, mere possession of a tax residency certificate is not sufficient to establish treaty eligibility conclusively or to prevent the revenue from examining treaty abuse; that grandfathering under Article 13(3A) is confined to direct transfers of shares of an Indian company and does not extend to indirect transfers falling under Article 13(4); and that the arrangement there, the transfer of Flipkart Singapore shares to a Luxembourg company in the Walmart acquisition, was an impermissible avoidance arrangement so that gains after 1 April 2017 were taxable. That decision displaces the wider proposition associated with the Delhi High Court in Blackstone Capital Partners, that a certificate is statutorily the only evidence required. It does not squarely displace what this Bench held: at para 11 the Tribunal itself said that merely holding a certificate gives no absolute immunity and that the Assessing Officer's attempt to rebut it had to be examined, which is the same qualification. What this order is exposed on is different and should be said plainly - it was a direct transfer of shares in an Indian company acquired before 1 April 2017, and the order does not consider Chapter X-A at all, although it applied to the year in question. The Supreme Court matter was a different entity in a different proceeding, the advance ruling line concerning Tiger Global International II and III Holdings, and this order was not before it and has not been set aside. One thing this entry did not previously record: the Revenue has appealed this order to the Delhi High Court. Commissioner of Income Tax - International Taxation-3 v. Tiger Global Eight Holdings, ITA 305/2025, is pending. The orders on the file are procedural only - adjourned at the joint request of counsel on 14 August 2025 (V. Kameswar Rao and Vinod Kumar, JJ.); adjourned on 23 February 2026 for Standing Counsel to complete instructions; listed again on 29 April 2026; and on 29 July 2026 (Dinesh Mehta and Rajneesh Kumar Gupta, JJ.) directed to be listed on 28 October 2026. No substantial question of law has been framed on any order seen and no stay is recorded, so the order stands and the assessee's result here is undisturbed, but the decision is under challenge and should not be cited as though it were unchallenged. 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.
The order has now been read in full: ITAT Delhi Bench 'D', G.S. Pannu (Vice President) and Anubhav Sharma (Judicial Member), IT Appeal No. 2345 (Delhi) of 2023, assessment year 2020-21, decided 26 July 2024, reported at [2024] 165 taxmann.com 16 / [2024] 115 ITR(T) 516 - the entry previously carried no date, no Members and the wrong ITR series. Three things a reader should take from it. First, the Tribunal did not hold that a tax residency certificate is conclusive: at para 11 it said that merely holding one gives no absolute immunity and that it had to examine how far the Assessing Officer had rebutted it. The wider proposition, that a certificate is statutorily the only evidence required, comes from the Delhi High Court in Blackstone Capital Partners and appears in this order only as senior counsel's submission at para 6.2. That resolves the tension this entry previously flagged between the two lines: this Bench did not adopt Blackstone's formulation. Second, only grounds 5 and 6 were decided; the remaining grounds were recorded as academic or consequential and left open (para 22), so this is not a decision on everything raised. Third, the order does not mention Chapter X-A, which the Supreme Court applied in the group's advance ruling litigation. The Supreme Court decision is Authority for Advance Rulings (Income-tax) v. Tiger Global International II Holdings [2026] 182 taxmann.com 375 / [2026] 485 ITR 214 (SC), 15 January 2026; it concerned a different entity in a different proceeding, this order was not before it and has not been set aside, and the assessee's own result here stands. Two further points from reading the order against this entry. The Revenue's appeal to the Delhi High Court, ITA 305/2025, is pending and was directed on 29 July 2026 to be listed on 28 October 2026; nothing substantive has been decided on it. And on the sections listed here: the order itself cites only ss.112, 143(3) and 144C(13). Sections 90 and 9(1)(i) are carried on this entry as practice tags - s.90 is the gateway for the treaty relief the order is about and s.9(1)(i) the deeming provision a reader will search under - and are not provisions the Tribunal cited. The order does not consider Chapter X-A although it applied to assessment year 2020-21, and it does not deal with Article 13(3A) grandfathering in terms, the assessee having itself offered the post-April 2017 shares to tax. Grounds other than 5 and 6 were left open as academic or consequential, so the order decides less than the grounds raised. No later decision has been found applying, following or doubting it. 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.
The appeal was allowed and the denial of treaty benefits was set aside. The Tribunal held that circulars 682 of 1994 and 789 of 2000, with Azadi Bachao Andolan and Vodafone, establish that a tax residency certificate is statutory evidence of residential status, and that even if it is not conclusive the onus shifts to the Assessing Officer to show by evidence that, beyond holding the certificate, the entity is a conduit created and run for treaty shopping (para 10). It was careful to add that merely holding a certificate gives the assessee no absolute immunity and that it had to examine how far the Assessing Officer had succeeded in rebutting it (para 11). On the material it found the assessee controlled and managed from Mauritius, with an office, employees, audited accounts, a majority-Mauritian board of qualified professionals, board minutes and share purchase agreements executed by the Mauritian directors, and held that the authorities had failed to rebut the certificate with cogent evidence and had proceeded on suspicion and inference (paras 12 to 19). Being a dropdown entity of Cayman Islands entities did not taint the activity, and substance over form could not be stretched that far (para 20). Note what was not decided: the Tribunal sustained grounds 5 and 6 only, and recorded that the remaining grounds either became academic or were consequential and were left open (para 22).
TaxSphere, “Tiger Global Eight Holdings v Dy CIT”, https://taxnotice.vittsphere.com/caselaw/case/tiger-global-eight-holdings-v-dy-cit-trc/ (validity last checked 2026-08-20)
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