Buying agency commission remains business income, not technical service fees, and escapes Indian tax without a permanent establishment.

Retrospective amendments to the assessment limitation framework are described as confining the statutory timelines to forwarding the draft assessment order, with DRP proceedings and finalisation thereafter governed independently; the limitation objection to the final order therefore does not survive. Buying agency commission for vendor sourcing, price negotiation, order placement, quality checks, logistics and compliance support is characterised as commercial procurement support rather than managerial, technical or consultancy services under the India-Swiss DTAA. It consequently retains the character of business income and, where the non-resident has no permanent establishment in India, is not chargeable to Indian tax. The related interest issue is consequential.

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Issues: (i) Whether the final assessment order passed after issuance of draft assessment order was barred by limitation under Section 153 of the Income-tax Act, 1961; (ii) Whether buying agency commission received by the assessee from its Indian affiliate was taxable as fees for technical services under Article 12(4) of the India-Swiss DTAA or as business income under Article 7.

Issue (i): Whether the final assessment order passed after issuance of draft assessment order was barred by limitation under Section 153 of the Income-tax Act, 1961.

Analysis: The limitation challenge was tested in light of the retrospective amendment brought by the Finance Act, 2026 to Sections 144C, 153 and 153B of the Income-tax Act, 1961. Under the amended position, the timelines in Sections 153 and 153B govern only the forwarding of the draft assessment order, and after issuance of the draft order, the time limits applicable to the DRP proceedings and the Assessing Officer's finalisation operate independently. On that basis, the objection that the final order was time-barred did not survive.

Conclusion: The limitation issue was decided against the assessee.

Issue (ii): Whether buying agency commission received by the assessee from its Indian affiliate was taxable as fees for technical services under Article 12(4) of the India-Swiss DTAA or as business income under Article 7.

Analysis: The commission arose under a buying agency arrangement under which the assessee acted for procurement of goods from foreign vendors for the Indian affiliate. The functions noted included vendor identification, price negotiation, order placement, quality checks, logistics coordination and compliance support. Following the co-ordinate bench decision in the assessee's own case for the immediately preceding assessment year on identical facts, these functions were treated as procurement support and commercial agency functions performed under the principal's direction and control, and not as managerial, technical or consultancy services within Article 12(4) of the India-Swiss DTAA. The income therefore retained the character of business income. Since absence of a permanent establishment in India had already been accepted, such business income was not chargeable to tax in India under Article 7.

Conclusion: The buying agency commission was not taxable as fees for technical services; it constituted business income and, in the absence of a permanent establishment in India, was not chargeable to tax in India. This issue was decided in favour of the assessee.

Final Conclusion: The limitation objection failed, but the addition made by recharacterising buying agency commission as fees for technical services was deleted, with the interest issue remaining consequential.

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