Reserved On : 21/01/2026 Pronounced On : 06/02/2026 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO.7905 of 2024 FOR APPROVAL AND SIGNATURE:

HONOURABLE MR. JUSTICE A.S. SUPEHIA and HONOURABLE MR. JUSTICE PRANAV TRIVEDI =============================================

Approved for Reporting Yes No ✔

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SOLVAY SPECIALITIES INDIA PRIVATE LTD.

Versus ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE INT. TXN. VADODARA & ORS.

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Appearance:

MR. SAURABH SOPARKAR, SR. ADV. WITH MR B S SOPARKAR(6851) for the Petitioner(s) No. 1 MR.VARUN K.PATEL(3802) for the Respondent(s) No. 1 NOTICE SERVED for the Respondent(s) No. 2,3 =============================================

CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA and HONOURABLE MR. JUSTICE PRANAV TRIVEDI

CAV JUDGMENT

(PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA)

1. By way of the present writ petition, the petitioner has assailed the order dated 31.03.2024 passed by the Assistant Commissioner of Income Tax Circle Int. Txn, Vadodara – respondent No.1 under Sections 201 and 201(1A) of the Income-tax Act, 1961 (hereinafter referred to as “the Act” for short) for the Assessment Year 2020-21.

2. Brief facts in the present petition are as under:

3. During the previous year relevant to Assessment Year 2020-21, the petitioner made payments to several non- residents. The petitioner paid service charges to ‘Solvay Speciality Chemicals Asia Pacific PTE Ltd.’ (hereinafter referred to as ‘Solvay Singapore’) on account of services rendered by it as per the agreement dated 1^st January, 2014 entered into between Solvay Singapore and the petitioner. As per the said agreement, Solvay Singapore was to render services in the nature of communication, finance, general management, legal, information technology, etc. to the petitioner. The petitioner did not withhold “Tax Deducted at Source” (hereinafter referred to as “TDS”) on the service charges paid to Solvay Singapore.

4. The petitioner e-filed its return of income for the Assessment Year 2020-21 on 14^th February, 2021 declaring total income of Rs. 11,00,30,480/- under the normal provisions of the Act.

5. The return was processed under Section 143(1) of the Act. Subsequently, the case of the petitioner was selected for complete scrutiny assessment under the E-assessment scheme. One of the issues in complete scrutiny was verification of foreign outward remittances. Thereafter, notice dated 22^nd January 2022 was issued under Section 142(1) of the Act. In the said notice, the Assessing Officer sought details of all foreign remittances made during the relevant financial year. The Assessing Officer also queried whether TDS was deducted on the foreign remittances or not.

6. The petitioner, vide letter dated 03.03.2022, submitted details in respect of all the foreign outward remittances made during the previous year relevant to the Assessment Year 2020-21, including remittances of service charges made to Solvay Singapore. The said details contained Form Nos.15CA and 15CB and also a note on deduction / non-deduction of TDS in respect of payments made to foreign entities. The note contained entity-wise details and the purpose of remittances. The said note also contained detailed submissions explaining that the service charges paid to Solvay Singapore did not fall within the definition of “fees for technical services” as defined in Article 12(4) of the India–Singapore DTAA (Double Taxation Avoidance Agreement); hence, the payments to Solvay Singapore did not include any sums chargeable to tax in India, and therefore, no TDS was deducted on the service charges paid to Solvay Singapore.

7. The Assessing Officer further issued show cause notices dated 11.07.2023 and 09.08.2023 seeking further details of service charges paid to foreign parties.

8. The petitioner, vide letter dated 12.08.2023, furnished further details of service charges paid to the foreign entities and also submitted sample in