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IN THE HIGH COURT OF JUDICATURE AT MADRAS
G.JAYACHANDRAN, SHAMIM AHMED
Cognizant Technology Solutions India Private Limited – Appellant
Versus
Income-Tax Officer (TDS) / Deputy Commissioner of Income-tax – Respondent
JUDGMENT :
The order impugned is the common order dated 09th June 2014, passed by the Income Tax Appellate Tribunal, Chennai, in a batch of six statutory appeals before the Commissioner of Income Tax (Appeals).
2. The appeals under consideration are in respect of the assessment years 2002-2003 & 2003-2004. The dispute relates to the disallowance of expenditure claimed in respect of payments made to a non-resident company as internet charges, which were subjected to tax under Section 40(a)(i) of the Act, along with the levy of tax and interest under Section 201 of Income Tax Act.
(i) T.C.A.No.651 of 2016 is filed against the order, dated 09.06.2014, in I.T.A.No.1535/Mds/2009, for the assessment year 2002-03. Subject-matter of this Appeal relates to an order of assessment, under Sections 201 and 201 (1A) of the Income Tax, 1961.
(ii) T.C.A.No.652 of 2016 is filed against the order, dated 09.06.2014, in I.T.A.No.1536/Mds/2009, for the assessment year 2003-2004. Subject-matter of this appeal relates to an order of assessment under Sections 201 and 201(1A) of the Income Tax Act, 1961.
(iii) T.C.A.No.653 of 2016 is filed against the order, dated 09.06.2014, in I.T.A.No.460/Mds/2010, for the a
Payments for bandwidth services via international private leased circuit to non-resident not 'royalty' under pre-2012 law; Explanations 4-6 to Section 9(1)(vi) prospective, not clarificatory. No TDS ....
Payments to non-residents for international private leased circuit facilities providing internet services do not constitute royalty under Section 9(1)(vi); Explanations 4,5,6 not retrospective; no TD....
The obligation to deduct tax at source arises only when payments are chargeable to tax in India, as affirmed by the court's interpretation of Section 40(a)(i) and relevant DTAAs.
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