Section 90

Section 90 — the law in short

What the courts have decided on section 90, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• AAR v Tiger Global International II Holdings Supreme CourtHelps departmentNo later treatment found
  I hold a Mauritius TRC. Can the department still deny me treaty relief on the capital gains?
  Yes. A Tax Residency Certificate is a necessary eligibility requirement under s.90(4) but is not sufficient or conclusive evidence of residence, beneficial ownership or entitlement to treaty benefits, and the authorities may examine the substance of the arrangement. The Supreme Court set aside the High Court's judgment, restored the AAR's rejection and held the gains taxable in India.
• Hyatt International Southwest Asia Ltd v Addl DIT Supreme CourtHelps department
  We run an Indian hotel under a long management agreement but own no office here. Can the department say we have a permanent establishment?
  Yes, on facts like these. A twenty-year agreement under which the foreign company appointed and supervised the general manager, set human resource and procurement policy, controlled pricing and marketing, and operated the hotel's bank accounts, performed through its own staff working from the hotel, made the hotel premises a fixed place of business under Article 5(1) of the India-UAE treaty. Exclusive or designated space is not required; what is required is that the premises be at the enterprise's disposal and that its business be carried on through them.
• AO v Nestle SA Supreme CourtHelps department
  My protocol has an MFN clause and I applied the lower rate India later agreed with an OECD member. Was I entitled to?
  No, on both counts. A notification under s.90(1) is a mandatory condition before any court, authority or tribunal can give effect to a treaty or to a protocol that alters the existing provisions of law, so an MFN clause does not import a later treaty's rate or scope by itself. And where the clause is triggered by India's treaty with a third state 'which is a member of the OECD', that state must have been an OECD member when it entered the treaty with India, not merely by the time the benefit is claimed.
• DIT v Samsung Heavy Industries Co Ltd Supreme CourtHelps taxpayer
  My foreign company opened a project office in India to coordinate an EPC contract. Has the department made it a permanent establishment, and can it tax a slice of my offshore revenue?
  No, not on those facts. The Supreme Court held that a fixed place is a permanent establishment under Article 5(1) of the India-Korea treaty only if the core business of the foreign enterprise is carried on through it. Samsung's Mumbai project office had two non-technical employees, its accounts showed no expenditure on executing the contract, and it did liaison and coordination work only — preparatory or auxiliary activity excluded by Article 5(4)(e). The Court also held the burden of proving a permanent establishment is initially on the Revenue, and that an ad hoc attribution of 25 per cent of gross offshore revenue had no foundation.
• Union of India v U.A.E. Exchange Centre Supreme CourtHelps taxpayer
  My UAE client's Indian liaison office only downloads remittance instructions from the head office server and prints cheques on Indian banks. The Assessing Officer says that is a permanent establishment and wants to tax the whole remittance commission. Is he right?
  No, on these facts. The Supreme Court held that a liaison office whose only activity is downloading information from the head office server and printing and despatching cheques is carrying on an activity of a preparatory or auxiliary character, which Article 5(3)(e) of the India-United Arab Emirates DTAA expressly takes out of the expression 'permanent establishment'. Once the office is deemed by that legal fiction not to be a PE, Article 7 gives India no right to tax the enterprise's profits, and the deeming provisions in ss.5 and 9 of the Act 'can have no bearing whatsoever'.
• ADIT v E-Funds IT Solution Inc Supreme CourtHelps taxpayer
  We outsource back-office work to our Indian subsidiary. Does that give us a permanent establishment in India?
  No, not by itself. The Revenue must prove that a fixed place in India was at the disposal of the foreign company and that the foreign company carried on its own business through it. Close association between parent and subsidiary, and the fact that the Indian company depends on the group for its work, do not answer that question, and the functions-assets-risks analysis borrowed from transfer pricing is not the test for whether a fixed place permanent establishment exists.
• Formula One World Championship Ltd v CIT Supreme CourtHelps department
  We had access to an Indian venue for only a few days in the year. Can that be a permanent establishment?
  Yes. A place is at the disposal of an enterprise when the enterprise has the right to use it and control over it, and a fixed place permanent establishment needs stability, productivity and dependence rather than ownership or a long lease. The Buddh International Circuit was a fixed place through which Formula One World Championship Ltd carried on its commercial activity, so it had a permanent establishment in India.
• DIT v A.P. Moller Maersk A/S Supreme CourtHelps taxpayerNo later treatment found
  Our Indian agents pay the foreign principal a pro-rata share of the cost of its global booking and communication system — is that fees for technical services taxable in India?
  No. The Supreme Court held that the payments the Indian agents made to a Danish shipping line for using its Maersk Net system were reimbursement of a proportionate share of cost, not fees for technical services. The system was an integral part of the shipping business and was a common facility available to all agents worldwide, not a service catering to any agent's special needs. Once the character of a payment is reimbursement of expenses, it cannot be income chargeable to tax; and since freight income was exempt under the India-Denmark treaty shipping article, the expenses of earning it could not be split off. The Revenue's appeals were dismissed.
• DIT v Morgan Stanley & Co Inc Supreme CourtCuts both ways
  Our Indian affiliate is paid at arm's length. Can more profit still be attributed to a PE?
  No, provided the transfer pricing analysis takes into account all the risk-taking functions of the entity that also constitutes the permanent establishment. Anything further would tax the same profits twice. On the facts, back-office work was preparatory or auxiliary and created no fixed place or agency PE, but deputing employees to work in India created a service PE.
• CIT v Hyundai Heavy Industries Co Ltd Supreme CourtCuts both ways
  I am a foreign company on a turnkey contract. I fabricated the platform abroad and only installed it in India. Can the Department tax the offshore fabrication profit because the contract was one indivisible whole?
  No, on these facts. The Supreme Court held that an installation permanent establishment comes into existence only at the installation stage, which is after the equipment has been sold and delivered abroad, so profits on the offshore supply are not attributable to it. Under Article 7 what is taxed is not the real profit but the hypothetical profit the permanent establishment would have made as a wholly independent enterprise, so nothing can be attributed on the supply unless the Department shows the price was not at arm's length or included an element for the establishment's services. On quantum, ten per cent of the Indian gross receipts was upheld.
• Ishikawajima-Harima Heavy Industries Ltd v DIT Supreme CourtHelps taxpayerSuperseded by amendment
  Our turnkey contract has offshore supply and offshore services alongside Indian work. Is the whole contract taxable in India?
  No — a composite turnkey contract can be split. Profits on equipment supplied and paid for outside India, where title passes outside India, are outside the Indian charge, because the contract being signed in India is immaterial and there must be a sufficient territorial nexus. On offshore services the Court read s.9(1)(vii) as requiring the services to be both utilised in India and rendered in India; that second requirement has since been removed retrospectively by statute, so only the offshore supply holding survives on the domestic law side.
• CIT v P.V.A.L. Kulandagan Chettiar Supreme CourtHelps taxpayer
  I am resident in India but my rubber estate and my business are in Malaysia. The treaty says that income may be taxed there. Can India tax it as well?
  No, on this treaty. The Supreme Court dismissed the Revenue's appeals and held that neither the business income from the Malaysian rubber plantations nor the capital gain on the sale of the Malaysian property could be taxed in India. The property was in Malaysia, the permanent establishment was in Malaysia and there was none in India, so the closer personal and economic relations determined fiscal domicile and residence in India became irrelevant. Capital gains is income arising out of immovable property for the purposes of the Act, so Article 6 covered it. The Court declined to decide the semantic question whether may be taxed allocates the taxing power or merely permits it.
• Union of India v Azadi Bachao Andolan Supreme CourtHelps taxpayer
  My investor is a Mauritius company held by people in a third country. Can the Department refuse it the treaty benefit on the ground that this is treaty shopping?
  No, not on that ground alone. The Supreme Court held that a resident of a third state taking advantage of a treaty between two others is not by itself illegal. If the treaty carries no limitation of benefits clause, there is no disabling condition to be read into it, and the motive with which the entity was incorporated is irrelevant. The Court also rejected the argument that avoidance of double taxation requires tax actually to be paid in one of the two states: an exemption agreed in a treaty operates whether or not the other state taxes. The Court declined to lift the corporate veil where the treaty had been made applicable by section 90.
• Kern Enterprise Ltd v Deputy Commissioner of Income Tax High CourtHelps taxpayerNo later treatment found
  My client's New Zealand company filed Indian returns and paid tax believing its place of effective management was in India, and New Zealand has since taxed the same income. Can it get the Indian tax back?
  Yes, on these facts. The Madras High Court quashed the order refusing rectification and refund, holding that CBDT Circular No. 8 of 2017 — under which section 6(3)(ii) does not apply to a company with turnover or gross receipts of Rs 50 crore or less in a financial year — is binding on the Department, so the company was not liable to Indian tax at all and the tax it had paid ought to have been refunded, with the Court adding that tax paid in excess must be refunded notwithstanding the procedure in section 155(14A) where the income was taxed in a foreign country.
• PCIT (IT)-2 Mumbai v Gemological Institute of America Inc High CourtHelps taxpayerNo later treatment found
  An APA between your Indian company and the CBDT fixes the royalty. The officer says the second proviso to s.92C(4) still stops the foreign parent, who did not sign the APA, from being taxed on the reduced figure. Does it?
  No, on this Bench's reasoning. Where an APA has been entered into between the Indian associated enterprise and the CBDT, that agreement governs the determination of the arm's length price for every year it covers, and the price falls to be determined solely on the basis of the APA. The second proviso to s.92C(4) is confined to the case where the Assessing Officer determines the arm's length price under s.92C(3); it does not reach a variation made pursuant to an APA.
• Foseco India Ltd. Company v. Assistant Commissioner of Income Tax High CourtCuts both waysUnder appeal
  Can I still rely on Colorcon Asia to get the treaty rate on DDT, or has the Bombay High Court unsettled it?
  It has unsettled it, but has not overruled it. On 27 April 2026 a Division Bench of the Bombay High Court, hearing seven appeals of Foseco India Ltd., framed two questions for a Larger Bench: whether the Division Bench decision in Colorcon Asia Pvt. Ltd. lays down the correct position in law when it holds that DDT is a tax paid by the company on the dividend income of the shareholder, entitling the shareholder to the benefit of the India-UK treaty; and whether, considering the Supreme Court's decision in Godrej & Boyce, Colorcon Asia is per incuriam. The Registry was directed to place the proceedings before the Chief Justice for constitution of a Larger Bench.
• Colorcon Asia Pvt. Ltd. v. Joint Commissioner of Income Tax High CourtHelps taxpayerUnder appeal
  My Indian company paid DDT at over twenty per cent on dividend to its UK parent. Can I restrict it to the ten per cent treaty rate, and does the Special Bench decision stop me?
  A Division Bench of the Bombay High Court at Goa held that it can. It allowed the appeal, set aside the Board for Advance Rulings' ruling of 27 June 2024, and declared that Colorcon Asia Pvt. Ltd. is entitled to restrict the tax rate on dividends distributed by it to Colorcon Ltd, United Kingdom, at ten per cent under Article 11 of the India-UK tax treaty — on the reasoning that DDT paid by a distributing company is not an income tax on the profits or income of the company but a tax on the dividend, which is the income of the shareholder, charged in the company's hands only for administrative convenience, so that s.90(2) lets the lower treaty rate be applied.
• M/s Atlantic Shipping Pvt Ltd v ITO (International Taxation) High CourtHelps taxpayerNo later treatment found
  Our principal's freight was exempt under Article 8, but the officer says Article 24 applies because the freight went to a London account. Who wins?
  The shipowner wins on these facts. The Gujarat High Court held that the assessee is entitled to the benefit of Article 8 of the India-Singapore treaty and that Article 24, the limitation of relief clause, does not apply, quashing the Tribunal's direction to send the matter back to the Assessing Officer to verify the Singapore tax authority's certificate.
• PCIT v Praveen Sawhney High CourtHelps taxpayerNo later treatment found
  The Department says my search assessment is in time because it made a reference to a foreign tax authority and gets a year excluded under s.153B. The reference was for years the treaty did not cover. Does the exclusion still apply?
  No. Clause (ix) of the Explanation to s.153B excludes the time taken on a reference for exchange of information only where the reference is made in terms of the agreement under s.90 or s.90A. A request made outside what the treaty permitted is not such a reference, gives no exclusion, and the assessments were time-barred. Twenty-nine Revenue appeals were dismissed.
• Munchener Ruckversicherungs Gesellshaft AG v CIT (International Taxation) High CourtHelps taxpayer
  The deductor credited the TDS late, so it turned up in 26AS only after I had filed. The department says I should have revised my return, and refuses credit because I never offered the income to tax. Is there a way back?
  Yes - s.155(14). The Delhi High Court held that s.155(14) places the Assessing Officer under a statutory obligation to amend the assessment or intimation once the certificate or the updated Form 26AS is produced, and that the sub-section neither contemplates nor mandates the original return being amended or revised. It also held that the Commissioner was wrong to require the income to be offered to tax where the assessee had consistently and uncontestedly said the receipt was not taxable in India.
• Coursera Inc v. Income Tax Officer TDS 1(2)(1) — a s.197 order that ignored the 2021 amendment to s.10(50) was set aside, and the receipts exigible to equalisation levy must be excluded before the withholding rate is fixed High CourtHelps taxpayerNo later treatment found
  My non-resident client pays equalisation levy on its Indian receipts, and the Assessing Officer has still refused a NIL section 197 certificate and directed ten per cent withholding. What is the answer?
  The Delhi High Court set that order aside. The equalisation levy is charged by Chapter VIII of the Finance Act, 2016, not by the Income-tax Act; the join between the two statutes is section 10(50) of the Act, and the Finance Act 2021 amended that clause with effect from 1 April 2021 so that amounts taxable as royalty or fees for technical services under the Act read with the applicable treaty are excluded from the exemption. The Court held that the impugned order did not take that amendment into account, and gave no reasoning for the ten per cent rate at all — the officer's own file had recorded that the receipts were not royalty or fees for technical services under the India-US treaty and had recommended four per cent 'in the interest of Revenue'. The order was set aside with a direction to pass a de novo reasoned order within four weeks excluding, from the receipts subject to withholding, so much as is exigible to equalisation levy.
• Kenneth Malcolm Holland v DCIT (International Taxation), Gurgaon High CourtHelps departmentNo later treatment found
  My client is a US national who came to India to teach and wants the two-year professors' exemption in the treaty. He has no Tax Residency Certificate from the US and the department will not give him an Indian one. Can he still claim the exemption?
  No. The Punjab and Haryana High Court held that a non-resident claiming relief under a treaty is hit by s.90(4) unless he obtains a certificate of residence from the government of the country of which he claims to be resident, and that a passport, an appointment letter and Form 16 are no substitute. The department's order, recited at para 4 and left undisturbed, had also said that under Rule 21AB(3) it is a person resident in India who may apply to the Assessing Officer for a certificate of residence, so that a non-resident cannot obtain an Indian TRC; the Court dismissed the writ on s.90(4) alone and made no finding of its own on that rule.
• GE Energy Parts Inc v CIT High CourtHelps department
  Our Indian group company only markets and supports. Can the department call it our dependent agent PE?
  Yes, on these facts. Where the personnel working out of the Indian premises do more than liaise — where they take part in technical and financial negotiation and in price negotiation with the customer — the Tribunal's finding of both a fixed place permanent establishment and a dependent agent permanent establishment stands. The Delhi High Court affirmed the Tribunal and dismissed the appeals.
• T. Rajkumar v Union of India High CourtHelps departmentNo later treatment found
  Can Parliament override a tax treaty by notifying the other country as a notified jurisdictional area, and is section 94A constitutionally valid?
  The Madras High Court upheld section 94A(1) and dismissed all nine writ petitions, holding that the challenge to its constitutional validity was without merit and that the notification of 1 November 2013 specifying Cyprus as a notified jurisdictional area was equally unassailable. The Court reasoned that where a treaty partner fails to provide information, it is that partner and not section 94A which dilutes section 90(1)(c), and that the phrase 'any country or territory' in section 94A(1) cannot be read as excluding countries with which India has a treaty.
• National Petroleum Construction Company v DIT High CourtHelps taxpayer
  I am a UAE company that fabricates offshore platforms abroad and installs them in India. My installation ran under nine months with a long break in the middle. Do I have a permanent establishment here?
  No. The Delhi High Court held the UAE company had no permanent establishment in India for assessment years 2007-08 and 2008-09. Under Article 5(2)(h) of the India-UAE treaty the nine-month test looks to the period the enterprise is actually involved at the site; a long interruption when the assessee had no access to the site is excluded, and the installation activity lasted only from November 2006 to April 2007. The Indian consultant was an agent of independent status acting in its ordinary course of business, with no authority to conclude contracts, so it was no dependent agent permanent establishment. The assessment orders and the Tribunal's orders were set aside.
• Serco BPO Pvt Ltd v Authority for Advance Rulings High CourtHelps taxpayer
  I bought shares of an Indian company from two Mauritius sellers holding valid tax residency certificates. Must I withhold tax on the price, and can the Authority refuse a ruling by calling the structure tax avoidance?
  No withholding was required. The Punjab and Haryana High Court quashed the Authority's order declining a ruling under section 245R and, rather than remand, decided the questions itself. It held the Mauritius sellers were residents of Mauritius on their certificates of residence, which the Revenue could not go behind, that 'liable to taxation' in Article 4 does not mean tax actually paid, and that under Article 13(4) of the India-Mauritius treaty gains on alienation of property other than that in paragraphs 1 to 3 — which includes shares, with no limitation by situs — are taxable only in Mauritius. No capital gains tax was payable and the purchaser was not liable to withhold under section 195.
• Centrica India Offshore P Ltd v CIT High CourtHelps departmentNo later treatment found
  We have people seconded to us from our overseas group companies, they work under our control, and we only reimburse their salary cost — do we still have to withhold tax under section 195?
  Yes. The Delhi High Court held on 25 April 2014 that the overseas group companies remained the real employers of the secondees, so what they supplied was the service of trained personnel, not a bare loan of staff. The payment was fees for technical services under Article 13 of the India-UK DTAA and, because the secondees passed their quality-control know-how on to the Indian staff, made-available services under Article 12 of the India-Canada DTAA. The overseas entities also had a service permanent establishment. Calling the payment a reimbursement, and charging no mark-up, made no difference. Section 195 applied and the writ petition was dismissed.
• DIT v Guy Carpenter & Co Ltd High CourtHelps taxpayer
  We pay reinsurance brokerage to an overseas broker who places our risk in the Lloyd's market — is that fees for technical services under the India-UK treaty?
  No, on these facts. The Delhi High Court dismissed the Revenue's appeal on 23 April 2012, holding that no substantial question of law arose. The Tribunal had found on the evidence that the overseas reinsurance broker was doing no more than acting as an intermediary — obtaining competitive proposals from Lloyd's syndicates, passing communications, submitting the slip to the market for signing and administering claims — and that nothing was made available to the Indian insurer within Article 13(4)(c) of the India-UK DTAA. The High Court held those to be findings of fact, and counsel for the Revenue could point to no perversity in them, so section 260A gave no scope to interfere.
• DIT (International Taxation) v Venkatesh Karrier Ltd — Article 8 of the India-UAE treaty ousts the section 172 levy where the ship belongs to a UAE resident High CourtHelps taxpayer
  We are the Indian agent of a ship owned by a UAE company. We filed the section 172(3) return claiming nothing was payable because of the treaty, and the Assessing Officer taxed 7.5 per cent of the freight without explaining why. Does the treaty defeat the section 172 levy, and what does the Board say?
  On the India-UAE treaty, yes. The Gujarat High Court held that where the owner of the ship is admittedly a resident of the UAE, Article 8 of the India-UAE Double Taxation Avoidance Agreement leaves no scope for taxing the income of the ship at any Indian port, because the agreement between the two countries has ousted the jurisdiction of the Indian taxing officers to tax profits derived by the enterprise. The Court reached that conclusion on Article 8 read with two Board circulars which it described but which are not reproduced in the judgment and which I did not read in their own words: Circular No. 333 dated 2 February 1982, which the Court said states that the provisions made in a DTAA prevail over the general provisions of the Act, and Circular No. 732 dated 20 December 1995, which the Court said clarifies that where ships are owned by an enterprise of a country with which India has a treaty providing for taxation of shipping profits only in the country of residence, no tax is payable by such ships at Indian ports.
• CIT v De Beers India Minerals P Ltd High CourtHelps taxpayerNo later treatment found
  We paid for technical services but learnt nothing from them. Is it still fees for technical services?
  No, where the treaty carries a make available condition. The service must be aimed at and result in transmitting the technical knowledge, skill or process, so that it stays with the recipient after the contract ends and can be used independently. Delivering the fruit of the expertise, here survey data and maps, is not enough.
• Rolls Royce Plc v DIT (International Taxation) High CourtCuts both waysNo later treatment found
  My foreign company sells to Indian customers through its Indian subsidiary, which I pay on a cost-plus basis. If that subsidiary is treated as my permanent establishment, is the cost-plus fee the end of it?
  No. The Delhi High Court held that where the Indian subsidiary is the permanent establishment and carries on the core marketing, negotiating and selling functions, an arm's length cost-plus remuneration to it does not exhaust the tax. Profits of the foreign enterprise attributable to the Indian operations remain chargeable, and the Court upheld the Tribunal's functional apportionment of global profit - 50 per cent to manufacturing, 15 per cent to research and development, and the balance 35 per cent to marketing carried out in India. Both the assessee's appeals and the Revenue's appeals were dismissed.
• Indcom v Commissioner of Income-Tax (TDS) High CourtCuts both ways
  We paid foreign umpires and match referees for a cricket tournament and did not withhold. The department has treated us as in default under s.194E. Are umpires within that section?
  They are not. The Calcutta High Court held that umpires and match referees are neither sportsmen (including athletes) nor a non-resident sports association or institution, so s.115BBA does not reach their income and the liability to deduct under s.194E never accrued on payments to them. On the other half of the case the assessee lost: the double taxation avoidance agreements relied on did not exclude the operation of s.115BBA or s.194E, so the duty to deduct on payments of prize money and administrative expenses to the foreign teams stood.
• DIT v Sheraton International Inc High CourtHelps taxpayer
  My foreign company runs worldwide advertising, publicity and reservations for Indian hotels using my brand. Is my fee royalty or fees for included services, or is it business profits?
  Business profits, and not taxable here for want of a permanent establishment. The Delhi High Court dismissed the Revenue's appeals and upheld the Tribunal. The main service was advertisement, publicity and sales promotion for the hotels worldwide; the use of the trademark, trade name and stylised S mark, the reservation interface and the loyalty programmes were all incidental to that integrated business arrangement, not separate services. So the fee was neither royalty under section 9(1)(vi) with Explanation 2 nor fees for technical services under section 9(1)(vii) with Explanation 2, nor taxable under Article 12 of the India-USA treaty. With no permanent establishment, Article 7 kept it out of the Indian net.
• Clifford Chance v DCIT High CourtHelps taxpayer
  My UK firm advised on Indian projects, partly from London and partly on visits to India, and our partners were here more than 90 days. Is the whole fee taxable in India?
  No. The Bombay High Court held that only the income attributable to services actually performed in India is chargeable, measured on the firm's hourly billing for work done in India. Article 15 of the India-UK treaty taxes an individual, including a member of a partnership, in the other State only if he performs services there and is present 90 days or more, and then only so much of the income as is attributable to those services. Under section 9(1)(vii)(c) the services must be both rendered in India and utilised in India, and territorial nexus does not permit the whole of a composite fee to be treated as arising in every jurisdiction touched.
• Bata India Ltd. v. ACIT ITATCuts both waysNo later treatment found
  Can I simply cite Colorcon Asia and get the treaty rate on my DDT, or will the Tribunal want more?
  It will want more. The Kolkata Tribunal admitted the additional ground but declined to decide it, restoring the issue to the Assessing Officer for re-adjudication. It held that although the ground is a legal one it requires verification of facts, and it identified three things that had to be established on the Kolkata Bench's own earlier decision in Indian Oil Petronas — that the dividend constitutes income in the hands of the non-resident shareholder, that the shareholder is the beneficial owner, and that the shareholder has no permanent establishment in India — and two things not considered in Colorcon Asia, namely the protocol to the treaty and the effect of the Supreme Court's decision in Nestle SA.
• DCIT v Kantar GDC India Private Limited ITATHelps departmentNo later treatment found
  The TPO is charging notional interest on my overdue receivables from my associated enterprise. Can I argue for a 90-day credit period by analogy to the secondary adjustment repatriation window in s.92CE and Rule 10CB?
  No, on this Tribunal's view. Section 92CE read with Rule 10CB operates only where a primary adjustment has been made in one of the specific situations the section lists, and the 90-day repatriation window attaches to that specific machinery; it cannot be borrowed as a general benchmark for the credit period allowable on outstanding receivables. The Tribunal instead directed the officer to adopt the credit period the TPO himself had adopted in the assessee's own case for the immediately preceding year that had reached the Tribunal.
• Vestas Wind Technology India P Ltd v ITO ITATHelps taxpayerNo later treatment found
  The AO disallowed interest paid to my foreign parent under s.94B. Does the treaty help?
  It did here. Section 94B restricts deduction only where the lender is a non-resident associated enterprise and not where the lender is domestic, which the Tribunal held is discrimination caught by Article 24(4) of the India-Denmark treaty; the treaty prevailed and the entire disallowance was deleted, including the amount the assessee had disallowed itself.
• Sky High Appeal XLIII Leasing v ACIT ITATHelps taxpayer
  Can the officer apply the PPT to my India-Ireland treaty claim just because both countries signed the MLI?
  No, on this Tribunal's view. The India-Ireland treaty is a covered tax agreement under the MLI, but the Tribunal held that no MLI provision — including the PPT — can be given effect in India without a separate notification under s.90(1), and none had been issued. The treaty benefits on aircraft lease rentals were allowed, the Tribunal also holding the lessors had no permanent establishment in India and that Article 8 covers the rental of aircraft in international traffic.
• Smt. Madhu Khatri v DCIT ITATHelps taxpayerNo later treatment found
  My employer allowed my HRA and conveyance allowance in Form 16 after taking my Form 12BB with the landlord's name, address and PAN. The CPC has still added them back. Does the employer's Form 16, backed by the Rule 26C declaration, carry the claim?
  On these facts, yes. The Tribunal held the assessee eligible for the s.10(13A) exemption of Rs 7,41,983 and the s.10(14) conveyance allowance of Rs 19,200 because the claim was supported by the requisite documents — bank statement as proof of payment, the declaration under Rule 26C, Form 12BB carrying the landlord's name, address, PAN and rent receipts, and a Form 16 in which the employer had allowed both exemptions after satisfying itself — and because the Commissioner (Appeals) had ignored all of that. The Form 16 was disputed neither by the Commissioner (Appeals) nor by the Departmental Representative.
• DCIT v M. Mahadevan ITATHelps department
  The Assessing Officer has computed my days in India from immigration records instead of the stamps in my passport. Can he go behind the passport like that?
  Yes, on this decision. The Chennai Bench of the Tribunal upheld the officer's reliance on data of the Foreigners Regional Registration Office in preference to passport stamps, holding that the agency is mandated to keep data of entry and exit on a real-time basis and that, being a Central Government agency, its data cannot be suspected or doubted. It also held that the burden lies on the assessee to prove by demonstrative evidence that his case falls outside section 6, and that having overseas business and travelling does not by itself put him outside Indian tax. A tax residency certificate from the UAE, obtained in 2021 for earlier years, did not displace the domestic computation.
• SC Lowy P I (LUX) v ACIT ITATHelps taxpayerUnder appeal
  The AO calls my Luxembourg fund a conduit and invokes the PPT. Is a TRC and some substance enough to answer that?
  Yes, on these facts, but not for the reason this entry previously gave. The Tribunal allowed the India-Luxembourg treaty benefits because the tax residency certificate was valid and unquestioned and the Assessing Officer brought no cogent material to show that the company was in substance a conduit - only views and presumptions. It applied the Delhi High Court's propositions on tax residency certificates, held that the burden of establishing that obtaining a benefit was one of the principal purposes lies on the revenue, and found that burden unmet on a record showing a Luxembourg company that filed and paid tax there, bore real operating costs and held 13.95 per cent of its portfolio in India.
• Saket Kanoi v DCIT ITATHelps taxpayer
  The officer says my client pays no tax in Dubai, so the India-UAE agreement cannot apply to him. Is that right?
  No. The Delhi Tribunal held that a resident of the UAE is entitled to the benefit of the India-UAE agreement even though the UAE levies no tax on him. Being 'liable to tax' in a Contracting State does not require that tax was actually paid; it is enough that the State has the right to tax, whether or not the right is exercised. The Assessing Officer's reasoning that there was no double taxation, so no relief was due, was rejected.
• Ashok Kumar Pandey v ACIT ITATHelps department
  I am resident in both India and the US. Which country wins under the treaty tie-breaker?
  India, on these facts. A permanent home being available in both countries, the Tribunal went to the centre of vital interests and held that personal and economic relations taken together pointed to India — spouse and children here, and active involvement in an Indian company as against passive US holdings. The US-source income was accordingly taxable in India.
• Tiger Global Eight Holdings v Dy CIT ITATHelps taxpayerNo later treatment found
  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.
• Saab Technologies B.V. v DCIT (International Taxation), Kolkata ITATHelps taxpayerNo later treatment found
  The Assessing Officer has added together my client's installation contract and the annual maintenance contract that followed it, crossed the treaty's duration threshold, found an installation permanent establishment and attributed 10 per cent of the receipts. Can he aggregate the two contracts?
  No. The Kolkata Tribunal held that providing annual maintenance services after the project or site has been handed over to the customer is not carrying out installation activities for the purpose of constituting an installation permanent establishment, so that the Assessing Officer's cumulative consideration of the original installation contract and the subsequent maintenance contract was bad in law and the resulting attribution of 10 per cent of the receipts was erroneous. On the duration itself the Tribunal held that the count does not start from the date of signing the contract, and that on the completion certificate and site readiness report the entire transaction was less than six months, so there was no PE under Article 5(3) of the India-Netherlands DTAA.
• Valeo v ACIT (International Taxation), Chennai ITATHelps departmentNo later treatment found
  My French client offered dividend from its Indian subsidiaries at 5 per cent under the most favoured nation clause and claimed a refund. After the Supreme Court's decision in Nestle SA, what happens to that claim?
  It fails. The Chennai Tribunal applied Nestle SA and dismissed the ground, holding that the 5 per cent rate claimed under Article 11(2) of the India-France DTAA read with the Protocol most favoured nation clause, imported from India's treaties with Slovenia, Lithuania and Colombia, could not be given effect without a separate notification under s.90(1). The dividend therefore remains taxable at the treaty rate as notified, and the refund claimed on the 5 per cent basis goes.
• Linklaters LLP v ACIT (International Taxation), Mumbai ITATHelps taxpayerNo later treatment found
  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.
• Sameer Malhotra v ACIT ITATHelps taxpayer
  I moved to Singapore with my family. Can the AO's tie-breaker questionnaire alone make me an Indian resident?
  No. A tie-breaker questionnaire is an important aid but cannot be the exclusive basis for the conclusion, and permanence of a home is assessed qualitatively as well as by duration, so a flat taken on rent abroad can be a permanent home. The Tribunal decided the tie-breaker principally on the centre of vital interests - the assessee had moved to Singapore with his family to earn there, so his personal and economic relations for that period were in Singapore - with habitual abode offered as an additional reason. The addition of global income was deleted and the Assessing Officer directed to accept the revised return.
• Prashant Vijay Kale v CPC, Bengaluru ITATHelps taxpayerNo later treatment found
  I filed my return on time and then revised it. CPC has ignored the original, treated the revised return as my first return, and charged s.234F fee and s.234A interest. Can that be undone?
  Yes. The Mumbai Bench found that the original return had been filed within the s.139(1) due date and that CPC and the CIT(A) had simply ignored it, and deleted both the Rs 5,000 fee under s.234F and the interest under s.234A charged on the footing that the revised return's date was the date of filing. Revising a return does not make a timely return late.
• Brinda Ramakrishna v ITO ITATHelps taxpayer
  I filed Form 67 late and my foreign tax credit was disallowed. Does missing the deadline kill the claim?
  No, on this decision. The Bangalore Tribunal held that Rule 128(9) does not provide for disallowance of foreign tax credit where Form 67 is filed late; filing Form 67 is directory, not mandatory; and the treaty overrides the Act, with the Rules unable to run contrary to the Act. The assessee had claimed credit of Rs 4,73,779 for Australian tax under section 90 read with Article 24 of the India-Australia treaty, filed Form 67 only on 18 April 2020, and had the credit refused. The Tribunal allowed the appeal, and also held the point could be taken in rectification proceedings under section 154.
• Unnikrishnan V S v ITO (International Taxation) — an ESOP benefit accrues where the qualifying services were rendered, so a non-resident who was granted options for work done in India is taxed here on exercise ITATHelps departmentNo later treatment found
  My client is a non-resident now. He exercised options granted years ago while he worked in India, and his employer deducted tax. Can he claim the perquisite did not accrue in India, or take treaty protection?
  No, on these facts — and this is stage one, the perquisite on exercise under s.17(2)(vi). The Tribunal held that the benefit accrued and arose in India at the time the options were GRANTED, in consideration of services rendered in India, even though s.17(2)(vi) brings it to tax only in the year of exercise. Article 15 of the India-UAE treaty gave no protection because the employment to which the benefit related was exercised in India, and the taxpayer's own authorities pointed the other way. Both appeals were dismissed.
• Giesecke & Devrient (India) Pvt. Ltd. v. Addl. CIT ITATHelps taxpayer
  Is there any Tribunal authority, older than the recent High Court decisions, that DDT cannot exceed the treaty rate — and can I still cite it?
  Yes. The Delhi Tribunal held on 13 October 2020 that the tax rates specified in a double taxation avoidance agreement in respect of dividend must prevail over DDT, and that the DDT levied by the company should not exceed the rate specified in Article 10 of the India-Germany treaty. It allowed the additional ground on principle but restored the matter to the Assessing Officer for the limited purpose of verifying, under Article 10(4), whether the beneficial owner carried on business in India through a permanent establishment; the appeal was allowed in part for statistical purposes.
• Dell International Services India Pvt Ltd v DCIT ITATHelps taxpayerNo later treatment found
  You offered extra income to give effect to a MAP resolution. The officer says the proviso denying a Chapter III deduction on enhanced income applies. Does it?
  No, on this Bench's view. The proviso applies only to a transfer pricing adjustment made by the Assessing Officer. It does not reach income enhanced under a mutual agreement procedure resolution, which is one of several distinct modes by which an arm's length price can come to be determined, and where the assessee actually invoices its associated enterprise and brings the foreign exchange in.
• Dy CIT v Kumar Sanjeev Ranjan ITATHelps taxpayerNo later treatment found
  I was resident of both countries for part of the year. Can the treaty put me in the other country for that part only?
  In practical effect yes, but the decision is thinner authority than it looks. The Assessing Officer had taxed the salary the assessee earned in the United States after returning there in August 2012. The first appellate authority applied the second limb of Article 4 of the India-United States agreement, found the centre of vital interests closer to the United States for that period, held him a resident of the United States for it and deleted the addition. The Tribunal dismissed the Revenue's appeal on two grounds only: that the first appellate authority had not based his conclusion on the residency certificate, so no question of fresh evidence arose, and that no finding under s.6(1)(c) was called for because residency was being determined under Article 4. It never adjudicated the proposition that split residency is available.
• Inno Real Private Limited and Inno Estates Private Limited v Deputy Commissioner of Income Tax ITATCuts both waysNo later treatment found
  My client was held to be an assessee in default for not deducting tax at thirty per cent on a remittance to a Cyprus company. Cyprus has since been removed from the notified list — does that help for a past year?
  The Chennai Tribunal set aside the orders and remitted both cases for de novo consideration in the light of CBDT Circular No. 15 of 2017 dated 21 April 2017, which clarifies that Notification No. 86/2013 notifying Cyprus was rescinded with effect from the date of its issue, thereby removing Cyprus as a notified jurisdictional area with retrospective effect from 1 November 2013. The Commissioner (Appeals) had held that the rescinding notifications of 14 and 16 December 2016 carried no retrospective effect and had sustained the section 201(1) demands; the circular, which post-dated his order, answered that.
• eBay International AG v ADIT ITATHelps taxpayer
  We charge Indian sellers a fee for listing on our overseas marketplace. Is that fees for technical services, and do our Indian support companies make us taxable here?
  No on both, and note how the second answer is reached. Providing a platform on which others transact is not the rendering of managerial, technical or consultancy services, so the user fees are not fees for technical services. On the treaty the Tribunal accepted that the Indian group companies, working exclusively for the Swiss company, were dependent agents - the assessee lost that limb - but held that a dependent agent becomes a permanent establishment only if it performs one of the functions listed in Article 5(5), and marketing and collection work is not among them. They were not a place of management either. Without a permanent establishment the business profits article keeps the income out of the Indian charge.
• DDIT (International Taxation) v Safmarine Container Lines NV — inland haulage charges fall within Article 8 of the India-Belgium treaty, and the domestic charge then becomes academic ITATHelps taxpayer
  Our Belgian shipping client bills its exporters a single freight covering carriage from an inland container depot to the Indian port and then to the foreign destination. The Assessing Officer has taxed the inland leg separately as business profits. Does the shipping Article cover the inland haulage?
  Under the India-Belgium treaty, on these facts, yes. The Mumbai Bench of the Tribunal dismissed the Revenue's appeal, holding that the issue was covered by a coordinate bench decision in the assessee's own case for assessment year 2001-02, reported at 120 ITD 71, which had held that inland transportation coupled with the further shipping of the cargo by the assessee from the Indian port to the foreign country is an "activity directly connected with such transportation" falling within Article 8(2)(b)(ii) of the India-Belgium agreement, and expressed its considered and respectful agreement with that view. Because the treaty allots the income exclusively to the residence State, the Tribunal held the question whether the income was chargeable under the domestic Act at all was wholly academic.
• Raymond Ltd v DCIT ITATCuts both ways
  We paid a UK merchant bank commission for managing our GDR issue. Does 'fees for technical services' in the treaty catch it, so that we had to deduct tax under section 195?
  No, on the Tribunal's reading of the treaty. The Mumbai Tribunal held that Article 13.4(c) of the India-UK treaty is not satisfied by merely rendering technical or consultancy services. The services must also make available technical knowledge, experience, skill, know-how or processes, meaning the recipient must be able to apply them himself afterwards without going back to the provider. The lead manager's work on the GDR issue left Raymond with nothing of that kind once the issue closed. The Tribunal also rejected the argument that the managers had bought the GDRs and resold them, and held that the UK treaty applied.
• In re Morgan Stanley and Co. International Limited Advance RulingHelps taxpayerSuperseded by amendment
  We are a UK company registered as an FII, trading index and stock futures and options on Indian exchanges through brokers and custodians. Is that income taxable in India?
  No. The Authority ruled that the income derived by Morgan Stanley and Co. International Limited, a UK resident, from trading in exchange-traded derivative instruments in India would not be taxable in India under the India-UK agreement. It held first that income from derivative trading is business income and not capital gains, derivative contracts being excluded from the definition of capital asset. Business profits are taxable in India only through a permanent establishment, and the brokers, custodians and bankers the applicant used were independent agents acting for many clients in the ordinary course of their business, so no permanent establishment arose under article 5. The ruling binds only that applicant.
• In re Cyril Eugene Pereira Advance RulingHelps departmentSuperseded by amendment
  I live and work in the UAE, where individuals pay no income tax. Can I claim the India-UAE treaty on my Indian dividends, interest and capital gains?
  No, on the Authority's 1999 view. It ruled that the applicant, permanently resident in Abu Dhabi, could not be treated as a resident of the UAE under article 4 of the India-UAE agreement, because article 4(1) requires liability to tax in that State and the UAE imposes no income tax on individuals. It followed that he could not claim the reduced rates on dividends and interest under articles 10(2)(b) and 11(2)(b), and that the capital gains protection in article 13(3) was unavailable, so the gains remained taxable in India under domestic law. The reasoning has not survived; the ruling bound only the applicant.
• In re Advance Ruling No. P-9 of 1995 Advance RulingHelps departmentSuperseded by amendment
  Two Mauritius companies my UK parent set up hold shares in an Indian bank. Can we get the India-Mauritius treaty rate on the dividends and exemption on the eventual share gains?
  No, and the Authority refused to rule at all. It accepted that the two Mauritius companies were residents of Mauritius under article 4, their effective management being there and not in India, so that on the face of the treaty article 13(4) would leave gains on the shares taxable only in Mauritius. But it then rejected both applications under clause (c) of the proviso to section 245R(2), holding the arrangement prima facie designed for the avoidance of income-tax: newly formed Mauritius subsidiaries wholly owned by a British bank served no purpose the bank could not serve by investing directly. The rejection binds only those applicants.
• In re Mohsinally Alimohammed Rafik Advance RulingHelps taxpayerSuperseded by amendment
  I am an Indian citizen who has lived in Dubai for years and I hold Indian shares and debentures. Can I claim the India-UAE treaty on my dividends, interest and capital gains?
  Yes. The Authority ruled that the applicant, a non-resident who had lived in Dubai for seventeen years, was a resident of the UAE for the India-UAE agreement. Article 4(1) asks whether a person is liable to tax under a State's laws because of a nexus with it, not whether tax is in fact collected; and on the tie-breaker his permanent home, his closer personal and economic relations and his habitual abode were all in Dubai. Gains on his Indian movable property were therefore taxable only in the UAE under article 13(3), dividends capped at 15 per cent under article 10 and interest at 12.5 per cent under article 11. When the assets were acquired made no difference.
• Statutory position — section 47(viiac) and (viiad): relocating an offshore fund into an IFSC is not a transfer, if it is done by 31 March 2030 CBDT Circulars & InstructionsCuts both ways
  We want to move an offshore fund's assets into a GIFT City vehicle and issue units in the new fund to the existing investors. Does that trigger capital gains, either for the fund or for the investors?
  Not if it is a 'relocation' as the Act defines it. Section 47(viiac) provides that any transfer, in a relocation, of a capital asset by the original fund to the resulting fund is not regarded as a transfer for the purposes of section 45; section 47(viiad) does the same for any transfer by a shareholder, unit holder or interest holder, in a relocation, of a capital asset being a share, unit or interest held by him in the original fund in consideration for a share, unit or interest in the resultant fund. The two clauses therefore cover both legs — the fund's transfer of its assets and the investors' exchange of their holdings.
• Statutory position — section 9A: an offshore fund managed from India has no business connection here, but only if every condition in section 9A(3) is met CBDT Circulars & InstructionsCuts both ways
  My client is an offshore fund that has moved its portfolio manager to Mumbai. The Assessing Officer says the manager is a business connection and the whole fund is now taxable in India. Is there a safe harbour?
  Yes, but it is a conditional one. Section 9A(1) provides that, notwithstanding section 9(1), the fund management activity carried out through an eligible fund manager acting on behalf of an eligible investment fund shall not constitute a business connection in India of that fund, and section 9A(2) provides that, notwithstanding section 6, the fund shall not be said to be resident in India merely because the manager undertaking fund management activities on its behalf is situated in India. The protection is available only where the fund answers the definition in section 9A(3), which carries thirteen lettered conditions, (a) to (m), every one of which has to be satisfied.
• Statutory position — rule 10V: the look-through for institutional investors, the cure periods that save a breach, and the twenty-six per cent control test CBDT Circulars & InstructionsCuts both ways
  My offshore fund breached one of the section 9A(3) conditions for part of the year, and one of its investors is itself a pooling vehicle. Is the safe harbour lost for the whole year?
  Not necessarily. Rule 10V(3) provides that a fund shall not be denied the benefit of being an eligible fund where non-fulfilment of conditions (c), (d) or (e) of section 9A(3) is for reasons beyond the fund's control and does not exceed ninety days, or does not exceed eighteen months from the date the fund is set up or the final closing of the fund, whichever is earlier, where bona fide efforts are made, or arises because the fund is being wound up and does not exceed one year from the date the winding-up process began; and it gives the same protection where the delay in furnishing the section 9A(5) statement does not exceed ninety days. Rule 10V(1) separately requires a look-through where the investment has been made directly by an institutional entity, and rule 10V(4) fixes the point at which the fund is said to control or manage a business in India for condition (k) at a holding exceeding twenty-six per cent.
• CBDT Circular 1/2025 on the Principal Purpose Test CBDT Circulars & InstructionsHelps taxpayer
  The officer says the PPT in the MLI destroys my Mauritius capital gains exemption on shares bought in 2015. Does the Board's own circular help?
  Yes, on both points. The Board says the PPT is intended to apply prospectively — from the date the treaty or protocol carrying it enters into force, or from the MLI's entry into effect for that treaty under Article 35 — and that the grandfathering provisions in the India-Cyprus, India-Mauritius and India-Singapore treaties stay outside the PPT altogether and are governed by the treaties' own clauses. It also tells officers to treat the exercise as fact-specific and case-by-case rather than as a rule of thumb.
• Statutory position — ss.196A, 196B and 196C: three fixed-rate deduction sections for non-residents, only one of which carries a treaty proviso, and none of which is in the s.197 list CBDT Circulars & InstructionsCuts both waysSuperseded by amendment
  We are remitting income on mutual fund units to a foreign company, and separately paying on Global Depository Receipts. Do we deduct under section 195 at rates in force, and can the payee get a lower deduction certificate?
  No. Where one of these three sections applies, it and not section 195 supplies the rate, and the rate is a figure fixed in the section rather than the 'rates in force'. Section 196A covers income in respect of units of a Mutual Fund specified under clause (23D) of section 10, or from the specified company referred to in the Explanation to clause (35) of section 10, paid to a non-resident not being a company or to a foreign company, at twenty per cent; it alone carries a proviso letting the rate fall to the treaty rate where an agreement under section 90(1) or section 90A(1) applies and the payee has furnished the certificate referred to in section 90(4) or section 90A(4). Section 196B covers income in respect of units referred to in section 115AB, and long-term capital gains on their transfer, payable to an Offshore Fund. Section 196C covers interest or dividends on bonds or Global Depository Receipts referred to in section 115AC, and long-term capital gains on their transfer, payable to a non-resident. Sections 196B and 196C each now carry a three-limb rate: ten per cent on the income, ten per cent on long-term capital gains where the transfer takes place before 23 July 2024, and twelve and one-half per cent where it takes place on or after that date. None of the three sections is in the list in section 197(1).
• DGIT(Systems) notification of 28.03.2023 on Form 10F CBDT Circulars & InstructionsHelps taxpayerSuperseded by amendment
  My foreign payee has no PAN and cannot file Form 10F online. Is his treaty claim lost?
  No. E-filing of Form 10F was made compulsory by DGIT(Systems) Notification No. 3 of 2022 dated 16 July 2022, but non-residents who had no PAN and were not required to have one were exempted from e-filing — first until 31 March 2023 and, by this notification, until 30 September 2023 — and could file Form 10F manually as before. From October 2023 the portal added a registration category for non-residents not holding and not required to hold a PAN, which allowed such payees to e-file.
• CBDT MAP Guidance 2022 CBDT Circulars & InstructionsCuts both waysNo later treatment found
  You have a transfer pricing adjustment that also bites your associated enterprise abroad. Can you run MAP and the domestic appeal together, and what closes the MAP down?
  You can run both. India follows a liberal regime and permits appeal and MAP proceedings to be pursued simultaneously, which many treaty partners do not. But a final ITAT order on the merits for the same year ends it: the competent authorities will not deviate from that order, the MAP is closed as resolved by a domestic remedy, and India then asks the treaty partner for correlative relief. Access is refused altogether in a defined set of cases, and there are fixed clocks for accepting a MAP outcome and for the officer to give effect to it.
• Statutory position — s.9(1)(i) Explanation 2A: significant economic presence, the Rule 11UD thresholds of two crore rupees and three lakh users, its commencement from AY 2022-23, and why it does not by itself create a treaty permanent establishment CBDT Circulars & InstructionsCuts both ways
  The Assessing Officer says my non-resident client has a significant economic presence in India and therefore a business connection. From which year does that provision actually operate, what are the thresholds, and does it override the treaty?
  Significant economic presence is a DOMESTIC-LAW expansion of 'business connection' in section 9(1)(i) of the Income-tax Act. It has nothing to do with the equalisation levy, which is charged by Chapter VIII of the Finance Act, 2016 and is not in the Income-tax Act at all. Explanation 2A in its present form was inserted by the Finance Act 2020 with effect from 1 April 2022, and it has two limbs: (a) transactions in goods, services or property with any person in India, including provision of download of data or software in India, where the aggregate of payments in the previous year exceeds a prescribed amount; and (b) systematic and continuous soliciting of business activities, or engaging in interaction, with a prescribed number of users in India. Rule 11UD prescribes both: TWO CRORE RUPEES and THREE LAKH USERS. Rule 11UD was inserted by the Income-tax (Thirteenth Amendment) Rules, 2021 with effect from 1 April 2022. And Explanation 2A does not by itself create a permanent establishment: it enlarges a domestic deeming provision, it does not amend any treaty, and where a treaty applies, section 90(2) allows the assessee the more beneficial position, so business profits remain taxable only if there is a permanent establishment as the treaty's own Article 5 defines it.
• Statutory position — s.245MA and the e-Dispute Resolution Scheme, 2022: ten lakh rupees of variation, fifty lakh rupees of returned income, and a committee that can waive the penalty CBDT Circulars & InstructionsCuts both waysNo later treatment found
  The variation in my assessment order is about six lakh rupees and my returned income was thirty-eight lakh. Filing a first appeal will take years. Is there anything else I can do, and what do I lose if I go that way?
  There is one alternative, and it is narrow. Section 245MA lets the Central Government constitute Dispute Resolution Committees for persons the Board specifies, who may opt for dispute resolution in respect of a dispute arising from any variation in a 'specified order' and who fulfil the 'specified conditions'. The Explanation fixes two numbers: the aggregate sum of variations proposed or made in the order must not exceed ten lakh rupees, and where a return has been filed for the relevant assessment year the total income as per that return must not exceed fifty lakh rupees. An order based on a search under section 132, a requisition under section 132A, a survey under section 133A, or information received under an agreement referred to in section 90 or section 90A is outside the definition altogether. The committee may reduce or waive a penalty imposable under the Act and grant immunity from prosecution. The application is in Form No. 34BC under rule 44DAB with a fee of one thousand rupees. The section itself says nothing about section 246A at all.
• CBDT Circular 2/2021 CBDT Circulars & InstructionsHelps departmentNo later treatment found
  I was stranded in India by the COVID flight ban in FY 2020-21. Am I resident now?
  There is no blanket relief, but the Board did not refuse one either. On the representations for a relaxation of the day count for previous year 2020-21, the Board concluded that on the Act read with the tax treaties there does not appear to be a possibility of double taxation for that year, and it reserved the relaxation question: individuals who are in fact being taxed twice were asked to furnish the information in Form-NR by 31 March 2021, and the Board said that after understanding those situations it would examine whether any relaxation is required and, if it is, whether a general relaxation can be given for a class of individuals or a specific one in individual cases. Along the way the circular sets out the day-count thresholds for the year, and makes the point that an individual who became resident because of exceptional circumstances would most likely be not ordinarily resident.
• Statutory position — section 285BB and rule 114-I: what the Annual Information Statement is, and what it is not CBDT Circulars & InstructionsCuts both ways
  The notice says an amount 'appears in your AIS' and proposes to add it. What is the AIS in law, and does an entry in it prove anything?
  Section 285BB requires the prescribed income-tax authority to UPLOAD, in the assessee's registered account, an annual information statement containing information which is in the possession of an income-tax authority, in the prescribed form and manner. That is the whole of the section: it is a disclosure obligation on the department, not a charging provision, not a deeming provision and not an evidentiary one. Rule 114-I lists the six heads of information that go into it and prescribes Form No. 26AS.
• Statutory position — s.195: tax is deducted only on a sum “chargeable under the provisions of this Act”, and Explanation 2 fixes who owes the duty, not what is taxable CBDT Circulars & InstructionsCuts both waysSuperseded by amendment
  In March 2026 I remitted a fee to a company outside India without deducting anything, because I did not think any part of it was taxable here. The Assessing Officer now says section 195 obliged me to deduct on the whole remittance, or at least to apply to him before paying. Does section 195 say that — and since the new Act has come in, which Act governs my payment at all?
  Which Act governs is settled by one date: on the CBDT's transition FAQ, where the earlier of credit or payment falls on or before 31 March 2026 the Income-tax Act, 1961 applies, and where it falls on or after 1 April 2026 the Income-tax Act, 2025 applies instead — there, the deduction duty sits in section 393(2), Table, Serial No. 17. So a March 2026 remittance is a section 195 question. Section 195(1) does not tax a remittance; it attaches a deduction duty to “any interest … or any other sum chargeable under the provisions of this Act” paid to a non-resident or a foreign company, at the time of credit or of payment, whichever is earlier. Those five words are the gateway, and in GE India Technology Centre the Supreme Court held on 9 September 2010 that they cannot be read out of the sub-section: a payer who is fairly certain that no part of the sum is chargeable in India may make that determination himself and is not obliged to apply under section 195(2) first. Section 195(2) is the payer's application where a composite payment is partly chargeable; section 197 is a different route, taken by the recipient. Sub-section (6) requires information about every sum, whether or not chargeable, in the form prescribed by rule 37BB — which is why the bank asks for a 15CA even where nothing is deductible.
• Statutory position — Chapter X-A applies only from AY 2018-19, and Rule 10U's three-crore threshold and the grandfathering of investments made before 1 April 2017 CBDT Circulars & InstructionsCuts both ways
  The Assessing Officer says my client's 2015 restructuring is an impermissible avoidance arrangement. Can GAAR reach an arrangement entered into before it came into force, and is there a monetary floor below which it simply does not apply?
  Chapter X-A applies in respect of any assessment year beginning on or after 1 April 2018 — that is, from AY 2018-19 — under s.95(2). Rule 10U(2) then makes the Chapter apply to an arrangement irrespective of when it was entered into, so long as the tax benefit is obtained on or after 1 April 2017; but Rule 10U(1)(a) takes out any arrangement where the tax benefit in the relevant assessment year, in aggregate to all parties, does not exceed three crore rupees, and Rule 10U(1)(d) read with the exception in Rule 10U(2) takes out income from the transfer of investments made before 1 April 2017.
• Statutory position — s.144BA(15) to (21) and the Explanation: who sits on the Approving Panel, the powers it borrows from the Advance Rulings Authority, and the two things that stop its six-month clock CBDT Circulars & InstructionsCuts both ways
  My case is going to the Approving Panel. Who actually sits on it, what powers does it have over me, how long is its term, and can the six months it has to decide be extended?
  The Approving Panel is not a departmental committee. By s.144BA(15) the CENTRAL GOVERNMENT constitutes one or more Panels, each of three members including a Chairperson, and by s.144BA(16) "the Chairperson of the Approving Panel shall be a person who is or has been a judge of a High Court", with one member from the Indian Revenue Service not below the rank of Principal Chief Commissioner or Chief Commissioner of Income-tax and one member "an academic or scholar having special knowledge of matters, such as direct taxes, business accounts and international trade practices". By s.144BA(19) the Panel has, in addition to its own powers, "the powers which are vested in the Authority for Advance Rulings under section 245U". Its term is ordinarily one year, extendable up to three years (s.144BA(17)). The six-month period in s.144BA(13) is subject to an Explanation that excludes two things — time taken on an exchange-of-information reference under s.90 or s.90A, capped at one year, and any period during which the Panel's proceeding is stayed by a court order or injunction — with a proviso that if fewer than sixty days remain after that exclusion, the period is extended to sixty days.
• Statutory position — s.92CE(1): the FIVE gateways into a secondary adjustment, the one crore threshold, the AY 2016-17 cut-off, and the word "and" that was retrospectively replaced by "or" CBDT Circulars & InstructionsCuts both ways
  The TPO's order says I must now make a secondary adjustment. Which primary adjustments actually trigger s.92CE, and is there any threshold or year below which the section simply does not apply to me?
  Section 92CE(1) is triggered by a primary adjustment to transfer price arising in any one of FIVE ways — made suo motu by the assessee in his return; made by the Assessing Officer and accepted by the assessee; determined by an advance pricing agreement entered into under s.92CC on or after 1 April 2017; made under the safe harbour rules framed under s.92CB; or arising from a resolution under the mutual agreement procedure under an agreement entered into under s.90 or s.90A. In any of those cases "the assessee shall make a secondary adjustment". The first proviso then takes the case out of the section altogether if EITHER (i) the amount of primary adjustment made in any previous year does not exceed one crore rupees, OR (ii) the primary adjustment is made in respect of an assessment year commencing on or before 1 April 2016. The word joining those two limbs was originally "and"; it was substituted by "or" by Act No. 23 of 2019 with retrospective effect from 1 April 2018, and that single word is what makes the exclusions workable.
• Statutory position — Rule 10U: the exclusions a cross-border case must clear first — the Foreign Institutional Investor and offshore-derivative carve-outs, and how the three crore rupee tax benefit is actually computed CBDT Circulars & InstructionsCuts both ways
  Before I argue the merits of a GAAR notice for a foreign investor, which exclusions in Rule 10U do I have to run, and how is the three crore rupee tax benefit figure arrived at?
  Rule 10U(1) takes four classes of case outside Chapter X-A altogether. Clause (a) is the monetary floor: the Chapter does not apply to an arrangement where the tax benefit in the relevant assessment year arising "in aggregate, to all the parties to the arrangement" does not exceed three crore rupees. Clause (b) excludes a Foreign Institutional Investor that is an assessee under the Act, that "has not taken benefit of an agreement referred to in section 90 or section 90A", and that has invested in listed or unlisted securities in accordance with the SEBI (Foreign Institutional Investors) Regulations, 1995. Clause (c) excludes a non-resident in relation to an investment made by him "by way of offshore derivative instruments or otherwise, directly or indirectly, in a Foreign Institutional Investor". Clause (d) grandfathers income from the transfer of investments made before 1 April 2017. Rule 10U(3)(iv) then tells you how to quantify the tax benefit for the clause (a) threshold: for sub-clauses (a) to (e) of s.102(10) it is "the amount of tax", and for sub-clause (f), an increase in loss, it is "the tax that would have been chargeable had the increase in loss referred to therein been the total income".
• Statutory position — Rule 10CB: the five different starting points for the ninety-day repatriation clock, and the two SEPARATE interest rate bases — SBI one-year MCLR plus 325 basis points for a rupee transaction, six-month LIBOR plus 300 basis points for a foreign-currency one CBDT Circulars & InstructionsCuts both waysNo later treatment found
  My primary adjustment stands and the money is still with my overseas associated enterprise. When exactly do my ninety days start, and at what rate is the deemed advance to be charged interest?
  Rule 10CB(1) gives the repatriation window as "on or before ninety days" from a starting point that differs with the source of the primary adjustment: from the s.139(1) due date where the adjustment was made suo motu in the return; from the date of the order of the Assessing Officer or the appellate authority where the adjustment in that order was accepted; where the adjustment is determined by an APA, from the date of filing the s.139(1) return if the APA was entered into on or before the due date, and from the END OF THE MONTH in which the APA was entered into if it came later; from the s.139(1) due date where the safe harbour option was exercised; and from the date the Assessing Officer gives effect under rule 44H to a mutual agreement procedure resolution. Rule 10CB(2) then fixes two different rate bases, and they are not interchangeable: for a transaction denominated in INDIAN RUPEES the imputed per annum interest is "at the one year marginal cost of fund lending rate of State Bank of India as on 1st of April of the relevant previous year plus three hundred twenty five basis points"; for a transaction denominated in FOREIGN CURRENCY it is "at six month London Interbank Offered Rate as on 30th September of the relevant previous year plus three hundred basis points". Clause (ii) still names LIBOR. LIBOR settings have been permanently discontinued and no replacement benchmark has been substituted into this rule, so for recent previous years the foreign-currency limb prescribes a rate that may not exist for 30 September of the relevant year.
• Statutory position — place of effective management under section 6(3)(ii) from AY 2017-18, and the CBDT Circular 6/2017 guidelines CBDT Circulars & InstructionsCuts both ways
  A foreign company in my client's group is run largely from India. From when can it be treated as resident here, and what test does the department actually apply?
  From assessment year 2017-18, a company is resident in India if it is an Indian company or if its place of effective management in that year is in India — 'the place where key management and commercial decisions that are necessary for the conduct of the business of an entity as a whole are, in substance, made'. CBDT Circular No. 6 of 2017 dated 24 January 2017 lays down the guidelines: a company 'engaged in active business outside India' is presumed to have its POEM outside India if the majority of its board meetings are held outside India, and only a company failing that test goes through the two-stage enquiry of identifying who actually makes the key management and commercial decisions and then where those decisions are in fact made.
• Statutory position — ss.10 and 11 of the Black Money Act: the s.10(1) notice, the enquiry, the s.10(3) assessment and the s.10(4) best judgment assessment, and the two-year limit in s.11 with the exclusions in Explanation 1 and the one-year cap on the exchange-of-information exclusion CBDT Circulars & InstructionsCuts both waysValidity unconfirmed
  I have an assessment order under s.10(3) of the Black Money Act. The department says the limitation was extended because a request for exchange of information was pending. How long is the period, and how much can that request add to it?
  Two years, and the exchange-of-information exclusion is capped. Section 11(1) provides that no order of assessment or reassessment shall be made under s.10 after the expiry of two years from the end of the financial year in which the notice under s.10(1) was issued by the Assessing Officer. Explanation 1 to s.11 excludes, in computing that period, (i) the time taken in reopening the whole or any part of the proceeding, (ii) the period during which the assessment proceeding is stayed by an order or injunction of any court, and (iii) the period commencing from the date on which a reference or first of the references for exchange of information is made by an authority competent under an agreement referred to in s.90 or s.90A of the Income-tax Act or under s.73 of this Act and ending with the date on which the Principal Commissioner or the Commissioner last receives the information so requested "or a period of one year, whichever is less". The exclusion in clause (iii) therefore cannot add more than one year however long the request remains outstanding. A proviso to the Explanation extends the remaining period to sixty days where, after the exclusion, less than sixty days are left. On the machinery itself: s.10(1) empowers the Assessing Officer, on receipt of information from an income-tax authority or any other authority or on information coming to his notice, to serve a notice requiring production of accounts, documents or evidence on a date to be specified, and to serve further notices; s.10(2) allows him to make such enquiry as he considers necessary; s.10(3) requires him, after considering what he has obtained under s.10(1), what he has gathered under s.10(2) and any other evidence produced by the assessee, to assess or reassess by an order in writing and determine the sum payable; and s.10(4) provides that on a failure to comply with all the terms of the s.10(1) notice he shall, after taking into account all relevant material gathered and after giving the assessee an opportunity of being heard, make the assessment or reassessment to the best of his judgment and determine the sum payable.
• Statutory position — section 194LBB: ten per cent for a resident, rates in force for a non-resident, and nothing on income not chargeable to tax CBDT Circulars & InstructionsCuts both ways
  Our Category II AIF is allocating income to investors. What do we deduct, and can we skip deduction for a foreign investor whose share is not taxable in India?
  Section 194LBB requires the payer of income in respect of units of an investment fund specified in clause (a) of Explanation 1 to section 115UB to deduct tax at ten per cent where the payee is a resident, and at the rates in force where the payee is a non-resident (not being a company) or a foreign company. Income of the same nature as income referred to in clause (23FBB) of section 10 — that is, the fund's business income, which is taxed at fund level — is outside the section altogether, and a proviso allows no deduction to be made from a non-resident's income that is not chargeable to tax under the provisions of the Act.
• Statutory position — s.194E with s.115BBA: withholding on payments to a non-resident sportsman, sports association or entertainer CBDT Circulars & InstructionsCuts both ways
  We are paying a foreign player, a foreign federation and a foreign performer for an event in India. Who is caught by s.194E, at what rate, and does the treaty stop the deduction?
  Section 194E as printed on the live departmental page requires the payer to deduct twenty per cent where any income referred to in s.115BBA is payable to a non-resident sportsman (including an athlete) who is not a citizen of India, to an entertainer who is not a citizen of India, or to a non-resident sports association or institution — at credit or payment, whichever is earlier. The section is entirely parasitic on s.115BBA: if the income is not income referred to in that section, there is no s.194E duty at all, which is how payments to umpires and match referees were held to fall outside it.
• Statutory position — s.90(4), s.90(5) and Rule 21AB: the TRC and Form 10F a non-resident must have before any treaty relief, and the Form 10FA route that is closed to him CBDT Circulars & InstructionsCuts both ways
  What exactly does a non-resident have to hold and file before he can claim a treaty benefit, and can he ask the Indian Assessing Officer for a residence certificate?
  A non-resident to whom a treaty applies is NOT entitled to claim any relief under it unless he obtains a certificate of his being a resident from the Government of the country or specified territory of residence — that is s.90(4), and s.90A(4) is its mirror for an agreement with a specified association. Section 90(5) requires him also to provide such other documents and information as may be prescribed, and Rule 21AB(1) prescribes five particulars to be furnished in Form No. 10F. The Indian Assessing Officer cannot supply a residence certificate to him: Rule 21AB(3) and (4) give the Form 10FA application and the Form 10FB certificate only to an assessee 'being a resident in India'.
• Statutory position — section 94A: the consequences of dealing with a person located in a notified jurisdictional area, and whether any area is notified today CBDT Circulars & InstructionsCuts both ways
  My client is remitting money to a company in a low-tax jurisdiction. Does section 94A apply, and is any country actually notified as a notified jurisdictional area at the moment?
  Section 94A lets the Central Government notify a country or territory as a notified jurisdictional area having regard to the lack of effective exchange of information, and once notified the consequences are severe and automatic: all parties to a transaction with a person located there are deemed associated enterprises, the transaction is deemed an international transaction so the entire transfer-pricing machinery applies, deductions are barred unless prescribed authorisations and documents are furnished, unexplained receipts from such a person are deemed to be income, and withholding is at the highest of the rate in force, the rate in the relevant provision and thirty per cent. The only notification under section 94A(1) that could be located was Notification No. 86/2013 notifying Cyprus, and it was rescinded by Notification No. 114/2016 with retrospective effect from 1 November 2013. No subsisting notification was found and no departmental list of notified jurisdictional areas could be opened, so nothing here certifies that no jurisdiction is notified today — section 94A should be neither treated as live against a jurisdiction nor written off as a dead letter without checking the current list.
• Statutory position — s.10(50) of the Income-tax Act: the exemption for income already subjected to equalisation levy, the royalty and fees-for-technical-services carve-out, and the two dates that close it CBDT Circulars & InstructionsCuts both ways
  My client paid equalisation levy on the same receipts the Assessing Officer is now taxing as income. Is there an exemption, and has the department any answer to it?
  There is, and it is the only place in the Income-tax Act where the equalisation levy — which is charged by Chapter VIII of the Finance Act, 2016 and not by the Income-tax Act — meets income-tax. Section 10(50) excludes from total income any income arising from (i) a specified service provided on or after the date on which Chapter VIII of the Finance Act, 2016 came into force, or (ii) e-commerce supply or services made or provided or facilitated on or after 1 April 2020 BUT BEFORE 1 AUGUST 2024, and chargeable to equalisation levy under that Chapter. Two limits close it. Explanation 1 says the income referred to in the clause 'shall not include and shall be deemed never to have been included' any income chargeable to tax as royalty or fees for technical services in India under the Act read with a section 90 or 90A agreement. And the proviso says the clause does not apply to any income of the previous year relevant to the assessment year beginning on or after 1 April 2026 — that is, from AY 2026-27 onwards.
• Statutory position — s.153 Explanation 1(xi): the limitation clock stops from the day the GAAR reference reaches the Commissioner until his direction or the Panel's comes back, and then never leaves less than sixty days CBDT Circulars & InstructionsCuts both ways
  A reference under s.144BA has been made in my case and months have gone by. Does the ordinary time limit for completing the assessment keep running while the Approving Panel sits on it?
  No. Clause (xi) of Explanation 1 to s.153 excludes from the limitation period "the period commencing from the date on which a reference for declaration of an arrangement to be an impermissible avoidance arrangement is received by the Principal Commissioner or Commissioner under sub-section (1) of section 144BA and ending on the date on which a direction under sub-section (3) or sub-section (6) or an order under sub-section (5) of the said section is received by the Assessing Officer". The clock therefore stops on receipt of the Assessing Officer's reference and restarts only when the outcome — the Commissioner's own direction under s.144BA(3), the Approving Panel's direction under s.144BA(6), or the Commissioner's order under s.144BA(5) dropping the matter — reaches the Assessing Officer. The proviso that follows the Explanation then gives the officer at least sixty days: if what is left after the exclusion is less than sixty days, the remaining period is extended to sixty days.
• Statutory position — s.90(2A): the treaty does not save you from GAAR, because Chapter X-A applies "even if such provisions are not beneficial" to the assessee CBDT Circulars & InstructionsCuts both ways
  My client is a treaty resident and the treaty plainly gives him the better of it. The department is invoking Chapter X-A anyway. Can it, when s.90(2) says the more beneficial provision applies?
  It can, and s.90(2A) is the provision that says so. Section 90(2) is the ordinary rule that where India has a treaty, the provisions of the Act apply "to the extent they are more beneficial to that assessee". Section 90(2A) then reads: "Notwithstanding anything contained in sub-section (2), the provisions of Chapter X-A of the Act shall apply to the assessee even if such provisions are not beneficial to him." So the treaty override that normally protects a non-resident is expressly switched off for Chapter X-A, and the fact that a Chapter X-A determination leaves the taxpayer worse off than the treaty is not an answer to it.
• Concentrix Services Netherlands B.V. and Optum Global Solutions International B.V. v ITO (TDS) — OVERRULED High CourtHelps taxpayerOverruled
  My Dutch parent has a s.197 certificate application pending and wants dividend withholding at 5 per cent under the most favoured nation clause in the Protocol. There is a Delhi High Court judgment in its favour. Can I still rely on it?
  No. This Delhi High Court judgment held that the Protocol forms an integral part of the India-Netherlands Convention so that 'no separate notification is required' for the most favoured nation clause to operate, and directed withholding at 5 per cent by importing the rate from India's later treaties with Slovenia, Lithuania and Colombia. That reasoning was reversed by the Supreme Court in Assessing Officer Circle (International Taxation) v. Nestle SA on 19 October 2023, which held that a notification under s.90(1) is a necessary and mandatory condition before a court, authority or tribunal can give effect to a Protocol that alters the existing provisions of law. The entry is carried so that the reader can identify the authority and stop relying on it.
• EPCOS Electronic Components SA v UOI High CourtHelps taxpayerOverruled
  My return was accepted as filed and no demand was raised. Is a s.264 revision still open to me?
  Yes. An intimation under s.143(1) that simply accepts the return is still an order capable of revision, and 'prejudicial to the interest of the assessee' does not mean 'raised a demand'. The prejudice was that the assessee had paid more than the applicable treaty provisions required, even though the tax computed in the intimation was unchanged.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.