Permanent establishment under the India-Canada DTAA requires treaty conditions; remote service activity alone did not create one.

Under the India-Canada DTAA, remote access to customers' theatre systems for maintenance and troubleshooting did not create a fixed place permanent establishment because the customers' premises were not at the assessee's disposal and the required nexus with a place of business was absent. The Tribunal also found no service or supervisory permanent establishment, as services were rendered for only 67 days, below the treaty's 90-day threshold, and there was no physical presence of personnel in India. It rejected an attempt to infer employment from a LinkedIn profile and declined to recognise a virtual permanent establishment without express treaty language.

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Issues: (i) Whether the assessee had a fixed place permanent establishment in India under the India-Canada DTAA; (ii) whether the assessee had a service permanent establishment or supervisory permanent establishment in India under the India-Canada DTAA.

Issue (i): Whether the assessee had a fixed place permanent establishment in India under the India-Canada DTAA

Analysis: The dispute turned on whether the Indian customers' premises or remote access to theatre systems could be treated as a fixed place at the assessee's disposal. The relevant tests for a fixed place permanent establishment were the existence of a place of business, disposal of the place, permanence, and carrying on of business activity through that place. On the facts recorded, remote access was only for maintenance and troubleshooting, did not confer control over the customers' premises or systems, and did not satisfy the required nexus with a fixed place in India.

Conclusion: There was no fixed place permanent establishment in India, and this issue was decided in favour of the assessee.

Issue (ii): Whether the assessee had a service permanent establishment or supervisory permanent establishment in India under the India-Canada DTAA

Analysis: The services were rendered only for 67 days, which was below the 90-day threshold under the treaty. The Tribunal also held that services performed remotely, without physical presence of employees or other personnel in India, could not constitute a service permanent establishment. It rejected the revenue's reliance on a LinkedIn profile to treat the concerned person as the assessee's employee and preferred the affidavit showing employment with the Australian vendor. The concept of a virtual service permanent establishment was not accepted in the absence of express treaty language.

Conclusion: There was no service permanent establishment or supervisory permanent establishment in India, and this issue was decided in favour of the assessee.

Final Conclusion: The additions based on the alleged permanent establishment failed because neither a fixed place permanent establishment nor a service or supervisory permanent establishment was established on the facts and under the treaty.

Ratio Decidendi: A permanent establishment under the treaty requires satisfaction of the treaty's express conditions, and remote service activity without physical presence or disposal of premises cannot be expanded into a fixed place or service permanent establishment by implication.

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