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DELHI HIGH COURT
RAJIV SHAKDHER, TALWANT SINGH
Nestle SA – Appellant
Versus
Assessing Officer Circle (International Taxation)- 2(2)(2), New Delhi – Respondent
| Table of Content |
|---|
| 1. covered issue by prior judgment. (Para 1) |
| 2. impugned orders set aside. (Para 2) |
| 3. certificate of tax rate issued. (Para 3) |
JUDGMENT
[Court hearing convened via video-conferencing on account of COVID-19]
Rajiv Shakdher, J. (Oral)--Mr. Zoheb Hossain, who appears for the respondent/revenue, cannot but accept that the issue raised in the present petition is covered by the judgement of this Court dated 22.04.2021, passed in W.P.(C) 9051/2020 titled `Concentrix Services Netherlands B V v/s. Income Tax Officer TDS & Anr.'.
2. Accordingly, impugned orders dated 04.01.2021 and 11.03.2021 are set aside. The writ petition is disposed of in the aforesaid terms.
3. Consequently, a certificate under Section 197 of the Income Tax Act, 1961 will be issued in favour of the petitioner, indicating therein, that the rate of tax, on dividend, as applicable qua the petitioner is 5% under India-Swiss DTAA.
The court ruled that under Section 197 of the Income Tax Act, a 5% tax rate on dividends applies to the petitioner as per the India-Swiss DTAA, reinforcing judicial consistency.
The court emphasized that the Department cannot refuse to follow binding jurisdictional decisions merely on the basis of proposing to file an appeal.
The protocol attached to a DTAA is binding and automatically applies, negating the need for separate governmental notifications to implement its terms.
The court ruled that a lower withholding tax rate of 5% applies under the India-Netherlands DTAA, invoking the Most Favoured Nation clause, which was supported by previous binding judgments.
The court ruled that under Section 264 of the Income Tax Act, the respondent must provide a reasoned decision on the merits of a revision petition, rejecting arbitrary dismissals without analysis.
Double Taxation Avoidance Agreement - Refund of excess tax - Rate of tax on distributed profits that is applicable is one stipulated under section 115-O of Tax Act and not one prescribed under Articl....
The protocol in the DTAA allows for the automatic applicability of lower withholding tax rates based on other treaties, requiring consistent interpretation for equitable tax allocation between contra....
DDT is tax on shareholders' dividend income collected from company; DTAA lower rates cap DDT liability under section 90(2), enabling refund of excess to paying company.
Tax authorities are obligated to provide reasoned orders in responses to petitions, and binding ITAT decisions must be followed unless properly contested.
Dividend Distribution Tax is a tax on dividend income and is covered by the DTAA, allowing a maximum tax rate of 10% on such dividends.
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