2026 (3) TMI 238

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... 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) 2026-27 has been decided in the manner that the payer(s) making payment to the petitioner are required to deduct tax at the rate of 10%. The certificate dated 22.07.2025 issued in furtherance thereof has also been challenged. 2. As per the petitioner, it is a non-resident Spanish tax resident company that developed a fully automated Computer Reservation System (for short 'CRS') for the global travel industry. It provides interconnectivity between airlines' host computers and its CRS hosted at Erding, Germany, enabling reservations, ticketing, and d....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e and is ex facie unsustainable. 6. He informed the Court that the Tribunal has, in the years gone by, consistently upheld that there is no taxability in India and that the payment in question is not in the nature of 'royalty' liable to be taxed in India, and therefore kept issuing a 'Nil' withholding certificate under Section 197 of the Act, however, for the AY 2026-27, the impugned certificate at 10% rate was issued on account of Royalty without there being any change in the business model of the Petitioner. 7. Mr. Anurag Ojha, learned Senior Standing Counsel for the respondents on the other hand, submitted that there was a substantial demand created for the AY 2023-24 pursuant to the demand notice dated 11.11.2025 issued under sect....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ributors, the said issue has attained finality. 12. The Respondents are directed to issue a certificate for 'Nil' deduction of tax at source under Section 197 of the Act to the Petitioner for the AY 2026-27, in accordance with law and in terms of the observations made herein. We hereby direct the Competent Authority to issue a certificate at 'nil' rate within a period of fifteen days from today with the additional directions, as below: (i) The competent officer or any other authority who is supposed to consider the petitioner's application under Section 197 of the Act of 1961, shall issue a certificate of nil rate of tax not only for the Financial Year 2025-26 (AY 2026-27), but also for the subsequent years in case an applicatio....