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आयकर अपीलीय अधिकरण

धि्ቤी पीठ “डी”, धि्ቤी

्ቦी विकास अि्ቝी, ्቗ाविक सद्ቧ एिं

्ቦी एम. बालगणेश, लेखाकार सद्ቧ के सम्ቌ

IN THE INCOME TAX APPELLATE TRIBUNAL

DELHI BENCH “D”, DELHI

BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER &

SHRI M. BALAGANESH, ACCOUNTANT MEMBER

आअसं.1978/धि्ቤी/2025( नि.व. 2022-23)

ITA No.1978/DEL/2025 (A.Y.2022-23)

Computer Modelling Group Ltd.,

3710 33 Street NW, Calgary, Canada 999999 ...... Appellant

अपीला्वी/

PAN AADCC-9658-E

Vs.

बिाम

Assistant Commissioner of Income Tax,

Circle International Taxation 1(2)(1),

Civic Centre, Minto Road, Ajmeri Gate,

New Delhi 110002 ..... Respondent

्ቚनिवादी/

अपीला्वी ्ቛारा/ Appellant by : Shri S K Aggarwal, Advocate

्ቚधिवािी्ቛारा /Respondent by : Ms. Ek ta Jain, CIT-DR

Date of hearing : 02/12/2025

सुिवाई की निथ्व/

Date of pronouncement: 27/02/2026

घोषणा की निथ्व/

ORDER

आदेश/

PER VIKAS AWASTHY, JM:

This appeal by the assessee is directed against the Assessment Order dated

29.01.2025 passed u/s. 143(3) r.w.s 144C(13) of the Income Tax

Act,1961(hereinafter referred to as ‘the Act’), for Assessment Year 2022-23.

2. The assessee in appeal has assailed the assessment order raising following

grounds of appeal:-

“1. That, on the facts and in the circumstances of the case and in law, the order passed by

the Ld. AO u/s 143(3) read with Section 144C (13) of the Act is wrong and bad in law and

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should be quashed and the order passed by the Hon’ble Dispute Resolution Panel - 1, Delhi

(’DRP’) and the directions given therein are erroneous.

2. That, on the facts and in the circumstances of the case and in law, the DRP and Ld. AO

erred in holding that the licensed software receipts are taxable in India as Royalty’ under

Article 12(3) of India-Canada DTAA;

3. That, on the facts and in the circumstances of the case and in law, the DRP and Ld. AO

erred in holding that the software maintenance fee is taxable in India as Fee for Included

Services (’FIS’) under Article 12(4) of India-Canada DAA;

4. That, on the facts and in the circumstances of the case and in law, the DRP and Ld. AO

have grossly erred in concluding that the Appellant has Permanent Establishment (PE’) in

India under Article 5 of India-Canada DTAA;

5. That, on the facts and in the circumstances of the case and in law, the DRP and Ld. AO

have grossly erred in holding that the entire receipt of the Appellant is taxable u/s 44BB

of the Act in the absence of constituting any PE of the Appellant in India;

6. Without prejudice to the aforesaid grounds, on the facts and in the circumstances of

the case and in law, the Ld. AO has grossly erred in not complying with the provisions of

Article 12(6) of India-Canada DTAA;

7. That on the facts and circumstances of the case and in law, the LD. AO has erred in not

appreciating that the protective and substantive additions of an income can be made only

when the identity of the real owner of the income is unclear and have no applicability in

the present case where both substantive and protective additions have been made on the

same person.

8. That on the facts and the circumstances of the case and in law, the Ld. AO has erred in

imposing the interest under Section 234B of the Act;

9. That on the facts and the circumstances of the case and in law, the Ld. AO has erred in

proposing to levy penalty under Section 270A of the Act;

10. That on the facts and circumstances of the case and in law, the Ld. AO has erred in

passing the order in a contradictory manner;

11. The above grounds of appeal are independent and without prejudice to one another.”

3. Shri S K Aggarwal, appearing on behalf of the assessee narrating facts of the

case submits that the assessee/appellant was incorporated in Canada and is a tax

resident of Canada. The assessee is engaged in the business of selling reservoir

simulation software used in oil and gas exploration industry. The assessee is also

providing software maintenance and support services to the customers in oil and

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gas exploration sector worldwide.