2025 (10) TMI 101 - SCH - Income Tax

SLPs dismissed for gross delay and merits: agreements don't create royalty under section 9(1)(vi); no TDS duty under section 195

The SC dismissed the Special Leave Petitions for gross delay (240 and 249 days), finding the reasons for condonation inadequate, and therefore refused to ... Accrual of income in India - interconnect service charges paid would amount to royalty or not? - Delayed filling SLP - HELD THAT:- There is a gross delay of 240 and 249 days respectively in filing these Special Leave Petitions. The reasons assigned for seeking condonation of delay are neither satisfactory nor sufficient in law so as to condone the same. Hence, the application(s) seeking condonation of delay is/are dismissed. Further, following the order passed by this Court in M/s M.I. Limited [2025 (9) TMI 117 - SC ORDER] these special leave petitions are dismissed on merits also as held this petition is covered by the judgment of this Court in Engineering Analysis Centre of Excellence Private Limited [2021 (3) TMI 138 - SUPREME COURT] which has been followed in other cases also as held here is no obligation on the persons mentioned in section 195 of the Income Tax Act to deduct tax at source, as the distribution agreements/EULAs in the facts of these cases do not create any interest or right in such distributors/end-users, which would amount to the use of or right to use any copyright. The provisions contained in the Income Tax Act (section 9(1)(vi), along with explanations 2 and 4 thereof), which deal with royalty, not being more beneficial to the assessees, have no application in the facts of these cases. SLP dismissed. There is a gross delay of 240 and 249 days respectively in filing these Special Leave Petitions; the reasons for condonation are held 'neither satisfactory nor sufficient in law' and the applications for condonation are dismissed. The petitions are also dismissed on merits by following the order dated 14.07.2025 in SLP (C) Diary No.27624/2025. That order (reproduced) states: 'Delay condoned.' It disposes the petitions by following earlier orders including Deputy Director of Income Tax vs. M/s Vodafone Idea Ltd. and others, observing coverage by the judgment in Engineering Analysis Centre of Excellence Pvt. Ltd. vs. Commissioner of Income Tax (2022) 3 SCC 321. The reasoning notes that a pending review or notice in similar matters does not justify entertaining subsequent petitions having regard to the Explanation of Order XLVII Rule 1 CPC. A three-Judge Bench order dated 23.04.2024 had likewise 'dismissed the said Review Petitions both on the ground of delay as well as on merits.' Pending applications, if any, are disposed of.