TaxTMI 
TaxTMI 
2025 (3) TMI 461
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.... the Act by the Assistant Commissioner of Income-tax, (National Faceless E-Assessment Centre)-1(1)(2), Delhi to initiate the assessment for AY 2020-21 is without jurisdiction in terms of Central Board of Direct Taxes ("CBDT") order (No. F. No. 18713/2.02.0-YYA-i) dated 31 March 2021. 1.2. On the facts and in the circumstances of the case and in law, the Ld. DRP in contravention of the provisions of section 144C and principles of natural justice, erred in not issuing the DRP directions to the Appellant. 1.3. On the facts and in the circumstances of the case and in law, the Ld. AO erred in issuing the final assessment order dated 20 January 2023 based on the DRP directions purportedly dated 04 November 2022. By doing so, the Ld. AO has passed the final assessment order under section 143(3) read with section 1440(13) of the Act beyond the timeline provided under section 1440(13) of the Act. 1.4. On the facts and in the circumstances of the case and in law, the final assessment order under section 143(3) read with section 1440(13) of the Act dated 20 January 2023 and the DRP directions under section 1440(5) of the Act purportedly dated 04 November 2022 are ba....
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....its that the Assessing Officer erred in making an addition of Rs. 2,47,83,056/- earned for services rendered under group service agreement and Rs. 4,34,67,740/- towards fee for advisory services (aggregating to Rs. 6,82,50,796/-) by treating it as Fees for Technical Services (FTS) under Article 13 of the India UK DTAA without appreciating the fact that the services rendered by the assessee do not make available technical knowledge to the recipient of services and hence not taxable in India. Ld. Counsel submits that in so far as the fee earned for services rendered under group service agreement is concerned, identical issue came up for consideration before this Tribunal in assessee's own case for the assessment years 2018-19 and 2019-20 and the Tribunal by its order dated 30.06.2023 in ITA Nos. 517/Del/2022 and 1382/Del/2022 held that since make available condition provided under Article 13(4)(c) remains non compliant the receipts would not fall within the definition of FTS as provided under Article 13(4) of India UK DTA. 4. The Ld. Counsel for the assessee further submits that in the current assessment year assessee has rendered one more additional service details of which are p....
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....group services agreement, the assessee renders following services: Human resource management: NMR manages payroll processes, recruitment, performance management, pensions, learning and development for operating entities including Rothschild India; Internal Audit: NMR is responsible for conduct of global internal audit assurance programme; Corporate events: NMR manages corporate events, memberships, sponsorships and hospitality functions in order to perform event management services at a centralized level; Group Finance: NMR is responsible for management reporting (including forecasts, planning and budgeting), financial reporting and capital planning. These include balance sheet reporting, funding, liquidity and regulatory issues, P&L reporting, covering actual results, forecasts and budgets, with the focus on divisional performance; Global Finance: NMR produces global management information for financial advisory business of the Group. It provides decision support for the management and co-ordinates global fee sharing, global expense policies and pipeline reporting; Legal and compliance: NMR provides legal and regulatory advice in terms of monito....
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....nature of royalty is received. Secondly, they must be ancillary and subsidiary to the enjoyment of the property for which the payment in the nature of royalty is received. Thirdly, the services 'make available', technical knowledge, experience, skill, knowhow or processes or consists of development and transfer of a technical plan or technical design. The facts on record reveal that the first two conditions noted above do not apply to the fees received as such fees are not for any services, which are ancillary and subsidiary to any payment made in the nature of royalty. Beside the aforesaid two categories, where the payment can fit in as FTS is the category where the services rendered make available technical, experience, skill, know-how, processes etc. Thus, the first condition, which needs to be satisfied, is the services rendered must be in the nature of technical or consultancy services. 10. As discussed earlier, under the group services agreement the assessee provides services in the nature of management, such as, payroll processes, recruitment, performance management, pensions, learning and development for operating entities, including the Indian AE. The asse....
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....ssing Officer's version, few of the services are in the nature of technical and consultancy nature, the crucial factor needs to be examined is whether while rendering such services the assessee has made available technical knowledge, experience, skill, know-how or processes to the India AE. The expression 'made available' has not been defined in India - UK DTAA. However, in this context reference can be made to the MoU to India - US DTAA wherein the term 'make available' has been explained. For ease of reference such explanation provided in the protocol to India - USA DTAA is reproduced hereunder: "Paragraph 4(b) of Article 12 refers to technical or consultancy services that make available to the person acquiring the services, technical knowledge, experience, skill, know-how, or processes, or consist of the development and transfer of a technical plan or technical design to such person. (For this purpose, the person acquiring the service shall be deemed to include an agent, nominee, or transferee of such person). This category is narrower than the category described in paragraph 4(a) because it excludes any service that does not make technology availabl....
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....ia - UK DTAA, are not taxable at the hands of the assessee in India. Grounds are allowed." 7. It is observed from the DRP order that the factual matrix of the case is same and identical for the AY 2018-19 the DRP followed its directions and findings given for the AY 2018-19 even for the AY 2020-21 which is under consideration. Therefore, facts being identical respectfully following the order of the Tribunal for the assessment years 2018-19 and 2019-20 we hold that the receipts towards services rendered under Intra Group Service Agreement would not fall within the definition of FTS as provided under Article 13(4) of India UK DTAA and hence not taxable at the hands of the assessee in India. 8. Coming to fee received towards advisory services rendered by the assessee to RCIPL it is observed that the assessee has rendered the following services: * "Identifying potential buyer for the client; * Provided support in preparation of management presentation and other material for distribution to potential buyers, all of which was based on the inputs received from the client and supported in coordination of marketing exercise; and * Supported RCIPL in advising....