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Sumo Logic vs Commissioner Of Income Tax ... on 23 August, 2021

Author: Manmohan

Bench: Manmohan, Navin Chawla

                              $~52
                              *    IN THE HIGH COURT OF DELHI AT NEW DELHI

                              +     W.P.(C) 8720/2021

                                    SUMO LOGIC                                         ..... Petitioner
                                                       Through       Mr.Deepak Chopra, Mr. Ankul Goyal
                                                                     & Mr. Anmol Anand advocates
                                                       versus


                                    COMMISSIONER OF INCOME TAX INTERNATIONAL
                                    TAXATION 3 ANR & ANR.                   ..... Respondents
                                                 Through  Mr.Ruchir Bhatia, Sr. SC

                                    CORAM:
                                    HON'BLE MR. JUSTICE MANMOHAN
                                    HON'BLE MR. JUSTICE NAVIN CHAWLA

                                                 ORDER

% 23.08.2021 CM No.27167/2021 (Exemption) Allowed, subject to all just exceptions.

WP(C) 8720/2021 & CM No.27166/2021 Present writ petition has been filed challenging the order dated 24th June 2021 issued under section 264 of the Act rejecting Petitioner's application for revision of certificate dated 07th June 2021 issued under section 197 of the Act by which the Respondent No 2 had directed the Indian Customers to deduct tax at the rate of 10% (excluding surcharge and cess as applicable) at the time of payment to the Petitioner. Petitioner also challenges certificate under section 197 of the Income Tax Act, 1961 dated 07th June 2021 issued by the Respondent No 2 directing Petitioner's Indian Signature Not Verified Digitally Signed By:JASWANT SINGH RAWAT Signing Date:25.08.2021 14:06:29 Customers to deduct tax at the rate of 10% (excluding surcharge and cess as applicable) at the time of payment to the Petitioner. Petitioner further seeks a direction to the Respondents to issue a certificate permitting tax deduction at NIL rate on amounts to be received by the Petitioner during Financial year 2021-22 relevant to assessment year 2022-23 and to refund the taxes withheld by Indian Customers to the Petitioner forthwith.

Learned counsel for the petitioner submits that the following questions of law arise for determination in the present matter:

(a) Whether the Respondents erred in law and on facts in rejecting the applicability of Equalization Levy on payments to be received by the Petitioner, being an E-commerce Operator for the purposes of section 164(ca) of Finance Act, 2016 without any permanent establishment in India, for providing subscription based interactive website access for online data analytics to Indian Customers?

(b) Whether the Respondents erred in law and on facts in re-

characterizing the nature of payments to be received by the Petitioner from Indian Customers as "Fee for Technical/Included Services"

under the Income-tax Act, 1961 / India-USA Double Taxation Avoidance Agreement (DTAA) rather than "business income"?

Issue notice. Mr.Ruchir Bhatia, Advocate accepts notice. He prays for and is granted six weeks time to file the counter affidavit. Rejoinder affidavit, if any, be filed before the next date of hearing.

Since the petitioner has prayed for refund of taxes and this Court is of the view that the said prayer would adequately protect the interest of the petitioner, the prayer for interim stay is declined.

List the matter before the Joint Registrar (Judicial) for completion of pleadings on 10th December, 2021.

The order be uploaded on the website forthwith. Copy of the order be also forwarded to the learned counsel through e-mail.

MANMOHAN, J NAVIN CHAWLA, J AUGUST 23, 2021/Arya Signature Not Verified Digitally Signed By:JASWANT SINGH RAWAT Signing Date:25.08.2021 14:06:29