$~68 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of Decision : 14.01.2026 + W.P.(C) 16354/2025 CM APPL. 66967/2025 SFDC IRELAND LIMITED .....Petitioner Through: Mr. Ajay Vohra, Sr. Adv. with Mr.

Aniket D. Agrawal and Mr. Samarth Choudhari, Advs.

versus COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION 3 NEW DELHI & ANR. .....Respondents Through: Mr. Sunil Aggarwal, SSC, Ms. Priya Sarkar, JSC and Mr. Anugram Dwivedi, Advs.

CORAM:

HON'BLE MR. JUSTICE DINESH MEHTA HON'BLE MR. JUSTICE VINOD KUMAR

JUDGMENT

DINESH MEHTA, J. (ORAL)

1. The present petition preferred under Article 226 and 227 of the Constitution of India, calls in question an order dated 26.09.2025 passed and corresponding certificate dated 11.09.2025 issued by the Assistant/Deputy Commissioner of Income Tax, (International Taxation) Circle 3(1)(2) New Delhi (hereinafter referred to as ‘the competent officer’). Said certificate (dated 11.09.2025) concerns the petitioner as it mandates its reseller or payer-salesforce.com India Private Limited to deduct tax at the rate of 10%

on the amount to be paid to the petitioner.

2. Mr. Ajay Vohra, learned Senior Counsel appearing on behalf of the petitioner, read the impugned order passed under Section 197 of the Income Tax, 1961 (hereinafter referred to as ‘the Act of 1961’) and submitted that the competent officer has proceeded with pre-occupied mind and was swayed by the revenue collection rather than objectively going into the essence of transaction and considering legal position. He added that such approach of the competent officer is apparent from the fact that in earlier part of his order he had asked the petitioner as to why his application should not be transferred to Bengaluru and in subsequent part instead of transferring the matter to Bengaluru, he went ahead and issued a certificate at 10% rate instead of certificate at nil rate as claimed by the petitioner.

3. Mr. Vohra informed that the petitioner is a resident of the Republic of Ireland within the meaning of Article 4 of the India-Ireland Double Taxation Avoidance Agreement (hereinafter referred to as ‘DTAA’), and is engaged in the business of operating Customer Relationship Management (‘CRM’) offering applications and platforms including, sales, service, marketing and related products and services. These products are standardized and the customers can pick different combinations of products that are best suited for their requirements. The products help the customers in generating reports and summaries of the data which is fed into the software by the clients themselves.

4. He added that these cloud-based customer management platforms enable its users to track customer requests, digital marketing, marketing automation, creation of e-commerce platforms and a host of analytical and predictive functions.

5. Learned Senior Counsel asserted that the Petitioner does not have a place of business or any employee or any other sort of presence in India, nor does it have any Permanent Establishment (hereinafter referred to as ‘PE’) in India, in terms of Article 5 of the India-Ireland Double Taxation Avoidance Agreement (DTAA).

6. Having given the background of the nature of services provided by the petitioner to the customers in India, albeit through its reseller and maintaining that neither the petitioner-company is having PE in India nor is any amount paid to it is taxable under the Act of 1961, he informed that for the Financial Year (hereinafter referred to as ‘FY’) 2023-24, though a certificate under Section 197 of the Act of 1961 was issued at 10% but pursuant to the order dated 11.03.2024, passed by this Court in the petitioner’s writ petition, a certificate of nil rate was issued. He stated that thereafter the return of income was accepted as such and no tax was imposed or levied upon the petitioner.

7. He further informed that during FY 2024-25, the officer issued a certificate at 2% tax rate which was set aside by this Court in petitioner’s second writ petition on 17.02.2