https://www.taxtmi.com/caselaws?id=325496 ITAT Delhi held that payments made by the assessee to foreign telecom operators (FTOs) for interconnection usage charges (IUC) do not constitute Fee for Technical Services or Royalty under section 9(1)(vii) or 9(1)(vi) of the Act, nor under relevant DTAA provisions. Such payments are classified as business income under Article 7 of the DTAA, and since FTOs lack a Permanent Establishment in India, the income does not accrue or arise in India. Consequently, the assessee is not liable to deduct tax at source under section 195 and cannot be treated as an assessee in default under section 201. The tribunal also ruled that section 206AA's provisions on withholding tax rates cannot be applied retrospectively, with DTAA rates prevailing. All issues were decided in favor of the assessee. en-us Thu, 17 Mar 2016 00:00:00 +0530 Mon, 01 Jun 2026 10:44:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=325496 ITAT Delhi held that payments made by the assessee to foreign telecom operators (FTOs) for interconnection usage charges (IUC) do not constitute Fee for Technical Services or Royalty under section 9(1)(vii) or 9(1)(vi) of the Act, nor under relevant DTAA provisions. Such payments are classified as business income under Article 7 of the DTAA, and since FTOs lack a Permanent Establishment in India, the income does not accrue or arise in India. Consequently, the assessee is not liable to deduct tax at source under section 195 and cannot be treated as an assessee in default under section 201. The tribunal also ruled that section 206AA's provisions on withholding tax rates cannot be applied retrospectively, with DTAA rates prevailing. All issues were decided in favor of the assessee. Case-Laws Income Tax Thu, 17 Mar 2016 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=325496