For services to be taxed as 'Fee for Technical Services' under the India-UK DTAA, the 'make available' clause must be satisfied, meaning the provider must transfer technical knowledge or skills enabling the recipient to independently perform those services. Routine, recurring support services do not fulfill this requirement.

ORDER

PER BRAJESH KUMAR SINGH, AM,

This appeal by the assessee is directed against the order of the Assessing Officer dated 23.12.2024 passed u/s 143(3)/144C(13) of the Income Tax Act, 1961 (hereinafter ‘the Act’) arising out of directions of Dispute Resolution Panel (hereinafter referred to as ‘DRP') dated 26.11.2024 pertaining to Assessment Year 2022-23.

2. The grounds of appeal are as under:-

1. On the facts and circumstances of the case and in law, the Ld. AO on direction of the Honb'le DRP have erred in considering the sum of INR 20,81,25,275 earned by the Appellant for rendering IT support services to CPP Assistance Services Private Limited (CPP India') as 'Fee for Technical Services' (FTS") under the Article 13 of the India UK Double Tax Avoidance Agreement (DTAA') and hence liable to tax in India.

2. On facts and circumstances of the case and in law, the Ld. AO has erred in considering the sum of INR 89,41,248 earned by the Company for rendering non-IT support services to CPP India as FTS under the Article 13 of the India-UK DTAA and hence liable to tax in India.

3. Without prejudice, the Ld. AO has grossly erred in applying an incorrect tax rate of 15% under Article 13 of the India UK DTAA, instead of the applicable beneficial tax rate of 10.92% under the Act for AY 2022-23, on the assessed income of the appellant, which also deviates from the draft assessment order issued by the Ld. AO.

4. Without prejudice, the Ld. AO has erred in not following the direction of the Hon'ble DRP and failing to grant credit of equalization levy paid @ 2% in the computation sheet issued along-with the final assessment order.

5. Without prejudice, the Ld. AO has erred in levying interest under section 234B of the Act in the computation sheet issued along-with the final assessment order.

3. The assessee is a company incorporated and registered in England and Wales. The registered address of the Company is 6, East Parade, Leeds, LS1 2AD, United Kingdom. It is a part of the CPP Group. The Company is engaged in the business of providing a various gamut of services (such as IT services, Human Resources, Business Development, Marketing, etc.) to its group companies. In terms of its activities in India during the captioned year, the Company rendered certain services to its associate enterprise ('AE'), CPP Assistance Services Private Limited ('CPP India'), which have been briefly discussed by the Assessing Officer as below:

i. IT support services:

The IT support services rendered by CPP(UK) are primarily for maintaining and operating appropriate IT infrastructure mainly consisting of a UK based core business application of the CPP group. Further, the Assessing Officer noted that CPP(UK) ensures a stable IT service provision throughout the year which meets the requirements of the CP Group entities located across the globe. The IT Support services as noted by the Assessing Officer provided by the assessee includes system maintenance and development services, advising on information security issues, assisting with IT operations, data management, etc. and the brief description of the services are noted in the assessment order as below:

a) Handling data and documentation of processes and ensuring safe data transmission in line with the group standards of data protection;

b) Serving as first point of contact for CPP India's technology issues and provide management for all IT related incidents;

c) Assistance with business analysis, project management, managing communication between different user groups supporting the Indian operations, maintenance of datab