IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘D’, NEW DELHI BEFORE SH. RAMIT KOCHAR, ACCOUNTANT MEMBER AND SH. SUDHIR KUMAR, JUDICIAL MEMBER ITA No.187/Del/2025 Assessment Year: 2022-23 HIRERIGHT LIMITED 15, Vs. Assistant Commissioner of Westferry Circus Canary Income Tax, Circle - 2(1) (1) Wharf London, Foreign International Taxation, United Kingdom Gurgaon Pan No. AAECH0080Q (APPELLANT) (RESPONDENT)

ITA No.185 /Del/2025 Assessment Year: 2022-23 HireRight LLC, 3349, Vs. Assistant Commissioner of Michelson Drive Irvine, Income Tax, International Nashville, USA Taxation, Gurgaon PAN NO.AADCH2254D (APPELLANT) (RESPONDENT)

Appellant by Sh. Kishore Kunal, Advocate Ms. Ankita Prakash, Advocate Sh. Anuj Kumar, Advocate Respondent by Sh. Vizay B Vasanta, CIT DR Date of hearing: 07/04/2025 Date of Pronouncement: 23/04/2025 ORDER PER SUDHIR KUMAR, JUDICIAL MEMBER:

These appeals are preferred by the assessees, Hier Right Limited and Hire Right LLC, against the order of the Assessing Officer dated 20.12.2024 and 18.12.2024 respectively for the A.Y. 2022-23 by the DRP/ TPO.

2. Since the facts and issues are common in both the appeals, the same are disposed of by this common order. Firstly, we taken the ITA No.187/Del/2025 in the case of Hire Right Limited for A.Y. 2022-23 wherein the assessee has raised the following grounds in appeal:

ITA No.187/Del/2025 A.Y.2022-23

1. That on the facts and circumstances of the case and in law, Ld. AO, has grossly erred in determining the taxable income of the Appellant for the subject assessment year at INR 14,60,96,010 as against Nil returned income and, accordingly, the assessment order passed by the Ld. AO is bad in law and void ab-

initio.

1.1. That on the facts and circumstances of the case and in law, the Ld. AO has erred in proposing addition of INR 14,60,96,008 based on mere conjunctures and surmises, ignoring the factual matrix of the case as well as the nature of the transactions undertaken by the Appellant.

1.2. That the Ld. AO has failed to appreciate the submissions made by the Appellant and further erred in making several observations and inferences in the assessment order, which are factually incorrect and legally untenable.

2. That on the facts and circumstances of the case and in law, the Ld. AO erred in holding that the revenue received by the Appellant from provision of background screening and investigation services is in the nature of 'Royalty' under the provisions of Explanation 2 to Section 9(1)(vi) of the Act and Article 13 of the Double Taxation Avoidance Agreement between India and UK ("India - UK DTAA").

2.1. That on the facts and circumstances of the case and in law, the Ld. AO erred in holding that the reports provided by the Appellant are protected by Copyright laws and therefore, the use of such reports by the clients will result in use of a Copyright chargeable to tax as Royalty.

2.2. That on the facts and circumstances of the case and in law, the Ld. AO erred in holding that the Appellant maintains a Database, and the consideration received by the Appellant is for allowing the use of database to its clients and is chargeable to tax as Royalty.

2.3. That on the facts and circumstances of the case and in law, the Ld. AO erred in holding that the screening report provided by the Appellant contains confidential information which are not available in public domain and use of that information by the clients amounts to use of commercial experience of the Appellant and is chargeable to tax as Royalty.

2.4 That on the facts and circumstances of the case and in law, the Ld. AO erred in placing reliance on judicial precedents and clauses in agreements which are distinguishable on the facts of the case.

3. That on the facts and circumstances of the of the case and in law, the Ld. AO has erred in levying interest under section 234A, 234B and 234C of the Act.

4. That on the facts and circumstances of the case and in law, the Ld. AO has erred in initiating penalty proceedings under section 270A o