2011 (7) TMI 957 - HC - Income Tax

No TDS on imported business information reports; remittances not taxable in India under Sections 195 and 201

HC upheld the ITAT's order cancelling proceedings under s.195 r/w s.201 against the assessee for non-deduction of TDS on payments for imported business ... Assessee in default - TDS u/s 195 - Whether the Appellate Tribunal was justified in cancelling the order passed u/s 195 read with section 201 ? - assessee had imported business information reports from Dun and Bradstreet, USA, and made remittances in respect thereof without deducting tax at source - HELD THAT:- Following its decision in the assessee's own case for the assessment year 2002-03 and the decision of the Authority for Advance Rulings on identical facts in the case of Dun and Bradstreet Espana [2004 (10) TMI 88 - AUTHORITY FOR ADVANCE RULINGS], held that the sale of very same business information reports by the subsidiaries of Dun and Bradstreet US in Spain, Europe and U. K. to the assessee did not attract the provisions of section 195 of the Act. Though the decision of the Authority for Advance Rulings is not binding in the present case, since the decision of the Authority for Advance Rulings relates to the very same business information reports imported by the petitioner and no fault in the decision of the Authority for Advance Rulings is pointed out, we see no reason to interfere with the decision of the Income-tax Appellate Tribunal. Accordingly, the appeal is dismissed with no order as to costs. Issues:Whether the Income-tax Appellate Tribunal was justified in cancelling the order passed under section 195 read with section 201 of the Income-tax Act, 1961.Analysis:The case involved the question of whether the Income-tax Appellate Tribunal was correct in canceling an order passed under sections 195 and 201 of the Income-tax Act, 1961. The assessee had imported business information reports from Dun and Bradstreet, USA, and made remittances without deducting tax at source. The Assessing Officer found the assessee liable to deduct tax at source and issued an order under sections 195 and 201 of the Act. The Commissioner of Income-tax (Appeals) upheld this decision. However, on further appeal, the Income-tax Appellate Tribunal set aside the order based on its previous decision in the assessee's case for a different assessment year and the decisions of the Authority for Advance Rulings on similar facts involving Dun and Bradstreet subsidiaries in Spain, Europe, and the U.K.The Tribunal relied on the Authority for Advance Rulings' decisions that the sale of the same business information reports by Dun and Bradstreet subsidiaries did not fall under section 195 of the Act. Although the Authority's decisions were not binding in the present case, as they related to identical reports imported by the petitioner, and no fault was found in those decisions, the High Court saw no reason to interfere with the Tribunal's decision. Consequently, the appeal was dismissed with no order as to costs.In conclusion, the High Court upheld the Income-tax Appellate Tribunal's decision to cancel the order passed under sections 195 and 201 of the Income-tax Act, 1961, based on the Tribunal's previous ruling in the assessee's case and the decisions of the Authority for Advance Rulings on similar matters involving Dun and Bradstreet subsidiaries.