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2. Consequent to the grant of relief at prayer (a), the petitioner has sought for issuance of writ of mandamus to direct the first respondent to issue 'Nil Tax Deduction at Source Certificate' to the petitioner under Section 195(2) of the Income Tax Act, 1961 ['I.T. Act' for brevity]. I. BRIEF FACTS:-

3. The petitioner is stated to be engaged in the business of providing Information Technology Solutions and Support Services for e-commerce industry. In the course of its business, the petitioner is stated to have made payments in the nature of "pure reimbursements" to M/s.Walmart Inc., Delaware, USA (hereinafter referred to as 'Walmart Inc.') for the Assessment Year 2020-2021 and in that regard had requested the Department for issuance of a 'Certificate of No Deduction of Tax at Source'. The payment of salaries to the deputed expatriate employees were stated to have been made by 'Walmart Inc.' for administrative convenience and the petitioner had made reimbursements to 'Walmart Inc.' With respect to such payments, the petitioner had sought for granting of Certificate under Section 195 of the I.T. Act.

9. It is stated that the petitioner makes contribution to the Provident Fund Authorities as an 'employer of seconded employees' and that the said employees are working in India on 'Employment VISA' wherein, the petitioner is declared to be an 'employer'.

10. In response to the invoices raised by 'Walmart Inc.' as regards the payments made towards salaries of the seconded employees, the petitioner had intended to make payments to 'Walmart Inc.', and in that context, had made an application at Annexure-'G' under Section 195(2) of the I.T. Act requesting for allowing the remittance of cost-to-cost reimbursements to be made by the petitioner without deduction of tax at source.

16. The payments in the nature of reimbursement cannot be charged as income under the Act. In the present case, the petitioner has paid only the actual cost of salaries of the seconded employees and there is no 'mark-up' which is retained by 'Walmart Inc.' on such costs. Reliance is placed on the judgment of Hon'ble Supreme Court in Director of Income Tax (IT)-I v. A.P. Moller Maersk A S , as also the judgment in Commissioner of Income Tax v. Kalyani Steels Ltd.,3.

17. It is further contended that the payment made by the petitioner to 'Walmart Inc.' are mere reimbursement of salaries paid to the seconded employees and once such payments are salaries, the same falls outside the purview of 'FIS' in terms of Article 12 and 16 of DTAA. In light of the law laid down by the Apex Court in Union of India and Another v. Azadi Bachao Andolan and Another4 and Engineering Analysis Centre of Excellence Private Limited v. Commissioner of Income Tax & Another5 provisions of 'DTAA' insofar as it is more beneficial to the assessee would prevail over the domestic law and as payments in question being in the nature of salaries under Article 16 cannot be treated as (2017) 5 SCC 651 (2018) 254 Taxmann 350 (Kar) (2003) 263 ITR 706 (SC) (2021) 432 ITR 471 'FIS' by the respondent Authorities by applying Section 9 of the I.T. Act.

(a) 'Walmart Inc.' has the power to decide on continuance of the services with 'Walmart Inc.' in U.S.A. after termination of their secondment in India. (see para 11.1 of the impugned order),

(b) 'Walmart Inc.' raises invoice after incurring the secondment costs (as per Clause 4.2 of M.S.A.),

(c) The equity eligibility of the seconded employee continues to be tied to 'Walmart Inc.'.

(iv) However, what would be of significance is the relationship between the petitioner and the seconded employees during the period of secondment that has been lost sight of while passing the impugned order. Accordingly, after the period of secondment or its termination, the fact that 'Walmart Inc.' has the power to decide on the employees' continuance with 'Walmart Inc.' would not make any difference, as it would relate to a service condition post the period of secondment. That the equity eligibility of the seconded employee which was a pre-existing benefit (even prior to the secondment) ought not to alter the relationship of employer and employee between the petitioner and the employee. Further, the mere payment by 'Walmart Inc.' to the seconded employees would not alter the relationship between the petitioner and the seconded employees, as the petitioner only seeks to make payment to 'Walmart Inc.' of its payment to the seconded employee which is stated to be by way of reimbursement.