Delhi High Court - Orders
Light And Systems Technical Center S L ... vs Deputy Commissioner Of Income Tax & Anr on 4 October, 2021
Author: Manmohan
Bench: Manmohan, Navin Chawla
$~31
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 11255/2021
LIGHT AND SYSTEMS TECHNICAL CENTER S L SPAIN
..... Petitioner
Through Mr.Ajay Vohra, Sr.Advocate with
Ms.Kavita Jha and Mr.Udit Naresh,
Advocates.
versus
DEPUTY COMMISSIONER OF INCOME TAX & ANR.
..... Respondents
Through Mr.Kunal Sharma with
Mr.Shubhendu Bhattacharyya,
Advocates.
CORAM:
HON'BLE MR. JUSTICE MANMOHAN
HON'BLE MR. JUSTICE NAVIN CHAWLA
ORDER
% 04.10.2021 C.M.No.34660/2021 Exemption allowed, subject to all just exceptions. Accordingly, the application stands disposed of. W.P.(C) No.11255/2021 & C.M.No.34659/2021 Present writ petition has been filed challenging the order dated 29th May, 2021 and certificate dated 29th July, 2021 issued by Respondent No.1, Deputy Commissioner of Income Tax, Circle International Taxation- 2(2)(1), under section 197(1) of the Income Tax Act, 1961 ('the Act'). Petitioner seeks directions to the Respondents to issue certificate with 'NIL' deduction of income tax in favour of the Petitioner for financial year 2021- Signature Not Verified Digitally Signed By:KRISHNA BHOJ Signing Date:05.10.2021 21:54:24 22 and set aside the impugned order to the file of the Respondent No.1 with the specific directions.
Learned senior counsel for the petitioner states that the impugned order dated 29th May, 2021 rejecting Petitioner's application for NIL deduction directing Minda Industries Limited (MIL) is arbitrary and no reason has been given in the order for arriving at the conclusion to deduct tax @9.99% excluding surcharge and education cess. He states that the Petitioner is a tax resident of Spain, having no PE in India and so the business profits arising to the Petitioner in India are not liable to tax in India in absence of PE of the Petitioner in India. He further states that the benefit of the MFN clause is available to the Petitioner as per the Protocol to the India-Spain DTAA which means that in case India enters into a DTAA, coming into force after 1st January, 1990, with any OECD Member State which provides for lower rate or narrower scope than the provisions in the India-Spain DTAA, then the same rate and the same scope will apply to India-Spain DTAA. He relies on the judgment of this court in the case of Steria (India) Ltd. vs. CIT: 386 ITR 390 to submit that once the DTAA has itself been notified, there is no need for the Protocol forming part of the DTAA to be separately notified.
Learned counsel for the petitioner states that the principles laid down by this Court regarding the applicability of MFN Clause and the conditions precedent [Knowledge transmission test, multi-use test and enduring dependency test] for determining the applicability of make available clauses in the hands of the Petitioner had not been taken into account while passing the impugned order.
Issue notice. Mr.Kunal Sharma, Advocate accepts notice on behalf of Signature Not Verified Digitally Signed By:KRISHNA BHOJ Signing Date:05.10.2021 21:54:24 the respondents. He prays for and is permitted to file a counter-affidavit within three weeks. Rejoinder-affidavit, if any, be filed before the next date of hearing.
List on 07th December, 2021.
MANMOHAN, J NAVIN CHAWLA, J OCTOBER 4, 2021 KA Signature Not Verified Digitally Signed By:KRISHNA BHOJ Signing Date:05.10.2021 21:54:24