2026 (2) TMI 422

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....Circle INT TAX 3(1)(1) DEL (hereinafter referred to as 'the competent authority') whereby the petitioner's application under Section 197 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act of 1961') for the Assessment Year (AY) 2025-26 has been decided in the manner that the payer(s) making payment to the petitioner are required to deduct tax at the rate of 1.6%. The certificate dated 17.04.2025 issued in furtherance thereof has also been challenged. 2. The petitioner is a company incorporated in the United Kingdom and for the purposes of Income Tax, a tax resident of the United Kingdom. The petitioner is engaged in providing electronic global distribution services (GDS) to the travel industry globally, through an automated ....

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....h would result in negative profit. He added that if calculated correctly, there arises no question of income in India. 6. He prayed that the impugned certificate deserves be set-aside and the respondents be directed to issue a tax withholding certificate of NIL rate of tax. 7. Mr. Siddhartha Sinha, learned Senior Standing Counsel for the respondents on the other hand, submitted that the competent authority has passed a detailed and reasoned order and that the Court cannot enter into fact-finding exercise. Inviting Court's attention towards the table given on page 7 of the impugned order, he submitted that Mr. Vohra, learned Senior Counsel has talked about revenue from India Point of Sales (POS) only, whereas the income in the hands of....

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....e assessment orders which have been passed by the competent authority are also unsustainable on their face, as the Government of India has no authority or power to tax the income which has not even accrued in India. He argued that simply because the travelers purchasing tickets from the agents situate outside India have travelled to India, commissions arising therefrom cannot be taxed in India, as no taxable event has taken place in India. 11. Heard. 12. There is no gain saying the fact that the second issue, the non-India POS on which the AO has created demand, is yet to be decided by the Appellate Authority and/or the Tribunal in accordance with law. Resultantly, for the last four years, the Assessing Officer's view is against the p....

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....es. Therefore, the Tribunal held that no further income was taxable in India." 14. The expression "was the income accruing or arising in India" in the 13th and 14th line of the above quoted paragraph, raised a doubt in our mind as to whether 15% of its receipts should be reckoned as revenue or income? But on perusal of the judgement particularly paragraph no. 9 and the order of the Tribunal, we are of the firm opinion that 15% of the commission is the revenue attributable to India PE. That is precisely what has been understood and taken by the competent authority in the order under challenge. 15. Hon'ble the Supreme Court has categorically observed and affirmed the position that 15% represents the quantum of revenue attributable to th....