SC dismisses petition on TDS under section 195 for non-resident telecom interconnectivity payments lacking Indian jurisdiction

The SC dismissed a Special Leave Petition concerning TDS provisions under section 195 regarding payments to non-resident telecom operators for interconnectivity charges. The case involved whether such payments constituted royalty, fees for technical services, or business profits under DTAA provisions. The HC had previously ruled that assessees are entitled to DTAA benefits, and the ITAT's position that DTAA cannot be considered in proceedings under section 201 was upheld. The court determined that since facilities were located outside India and the agreement was with a Belgium entity having no Indian presence, Indian tax authorities lacked jurisdiction over income from extra-territorial sources. Following the precedent in Vodafone Idea Ltd., the SC dismissed the petition, disposing of all pending applications.

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The Supreme Court, through Hon'ble Justices B. V. Nagarathna and K. V. Viswanathan, heard the Special Leave Petition following the precedent set in Deputy Director of Income Tax & Anr. vs. M/s. Vodafone Idea Ltd. [SLP(C) Diary No.24154/2024]. The Court "dismiss[ed] this Special Leave Petition," condoned the delay, and disposed of all pending applications. The decision adheres strictly to the earlier ruling, reflecting consistent judicial reasoning without elaboration.

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