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of <h1>Assessee's Subscription Charges Not Taxable as Royalty Under Tax Agreement</h1> <h3>American Chemical Society C/o Deloitte Haskings And Sells LLP Versus Dy. Commissioner of Income Tax International Taxation, Circle–1 (1) (1), Mumbai</h3> American Chemical Society C/o Deloitte Haskings And Sells LLP Versus Dy. Commissioner of Income Tax International Taxation, Circle–1 (1) (1), Mumbai - TMI Issues Involved:1. Assessment of total income.2. Taxability of subscription charges as 'Royalty'.3. Levy of interest under section 234A.4. Levy of interest under section 234B.Summary:Issue 1: Assessment of Total IncomeThe assessee challenged the assessment of total income at INR 2,14,76,13,270 under section 143(3) read with section 144C(13) of the Income Tax Act, 1961, against a Nil returned income. This issue was deemed general in nature and required no separate adjudication.Issue 2: Taxability of Subscription Charges as 'Royalty'The primary contention was whether subscription charges received by the assessee from Indian customers should be taxed as 'Royalty' under Article 12(3) of the India-US Double Tax Avoidance Agreement (DTAA) and section 9(1)(vi) of the Act. The assessee, a US-based scientific society, argued that these receipts did not qualify as royalty or fees for included services under the India-US DTAA. The Tribunal noted that in previous assessment years (2014-15 to 2019-20), similar subscription revenues were not treated as royalty by the Co-ordinate Bench of the Tribunal. The Tribunal upheld this view, stating that the subscription fees for Chemical Abstract Service (CAS) and Publications (PUBS) divisions do not qualify as 'Royalty' under section 9(1)(vi) of the Act or Article 12(3) of the India-US DTAA. The Tribunal found no reason to deviate from prior decisions and deleted the impugned addition.Issue 3: Levy of Interest under Section 234AThe assessee contested the levy of interest under section 234A of the Act, arguing that the return of income was filed within the prescribed time. The Tribunal remanded this issue to the Assessing Officer for de novo adjudication after examining whether the return was indeed filed within the due date. This ground was allowed for statistical purposes.Issue 4: Levy of Interest under Section 234BThe levy of interest under section 234B was considered consequential in nature. The Tribunal allowed this ground for statistical purposes.Conclusion:The appeal by the assessee was allowed for statistical purposes, with the Tribunal upholding the plea regarding the non-taxability of subscription fees as 'Royalty' and remanding the issue of interest levy under section 234A for further examination.
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