TaxTMI 
TaxTMI 
2026 (6) TMI 986
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.... learned First Appellate Authority holding that there is no obligation upon the assessee to deduct tax on the remittances to two overseas entities towards reinsurance premium. Hence, the assessee cannot be treated as an assessee in default under Section 201 of the Income Tax Act, 1961 (in short, 'the Act'). 3. Briefly the facts are, as stated, the assessee is a resident corporate entity, being a joint venture between Aditya Birla Nuvo Limited and Sun Life Financial (India) Insurance Investment Inc., subsidiary of Sun Life Assurance Company of Canada. The assessee is engaged in the business of providing life Insurance Services to protect itself from the risk under the insurance contracts as per market practice. The assessee has entered in....
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....ium paid to them, which is in the nature of business income at the hands of the overseas entities, is not taxable in India. The Assessing Officer, however, was not convinced with the submissions of the assessee. He observed that RGA International Reinsurance company Limited had a wholly owned subsidiary in India, namely, RGA Services India Private Limited (RGA Services India), which constitutes its PE. In this context, the Assessing Officer referred to the case of M/s. Bharti Axa Life Insurance Co. Ltd. for Assessment Years 2011-12 to 2014-15, wherein it was held that RJ Services India is the PE of RGA International Reinsurance company Limited in India. 4. Insofar as Munich Re is concerned, the Assessing Officer observed that it has a su....
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.... order dated 5-7-2017 has held that RGA India Services Limited cannot be considered as the PE of RGA International Reinsurance Company Ltd. in India. Thus, it was held that Bharti Axa Life Insurance Co. Ltd. was not obliged to deduct tax at source on the reinsurance premium paid to the Irish company. Thus, relying upon the said decision of the ITAT, learned First Appellate Authority held that the assessee cannot be treated as an assessee in default under Section 201(1)/(1A) of the Act so as to be visited with demand under Section 201(1)/(1A) of the Act. He further referred to the decision of the ITAT in case of RGA International Reinsurance company Limited in Assessment Year 2015-16, wherein the ITAT in order dated 31-10-2022 in ITA No. 693....
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....essee. 7. Having considered rival submissions and perused the materials on record, we are of the view that insofar as the allegation of the Assessing Officer that the RGA International Reinsurance Company Limited and has PE in India in the form of wholly owned subsidiaries are concerned, the coordinate bench in case of 'Bharti Axa Life Insurance Co.' Ltd. and in case of 'RGA International Reinsurance company Limited' has clearly and categorically held that the Indian subsidiaries cannot be treated as PEs of the payee as the subsidiary did not provided any reinsurance services to the assessee. 8. Insofar as the allegation of the Assessing Officer that the payment made to Munich Re would qualify as FTS/ royalty, we do not find much subs....