The assessee had made foreign remittance to a company Red Hat Singapore without deducting tax at source on ground that payment for purchase of subscription was not taxable as per the provisions of article 7 read with article 5 of the India Singapore DTAA. The Assessing Officer held that the subscription fee was liable to be taxed as ‘royalty’ within the meaning of section 9(1)(vi) as well as article 12(3) and also taxable as ‘fee of technical services’ within the meaning of section 9(1)(vi) as well as article 12(4)(a) and article 12(4)(b). Accordingly, assessee was treated as an ‘assessee-in-default’ under section 201(1)  and passed the order. The Commissioner (Appeals) partly allowed  the appeal. Tribunal deleted the addition.  Court also held that  the ITAT also came to the conclusion that assessment should be lawfully made by AO on the payee/recipient. Since that has not been done, the order of AO under section 201(1) read with Section 201(1A) of the Act was unsustainable. Order of  the Tribunal is affirmed.  Mahindra & Mahindra Ltd. v. Dy. CIT (2010) 122 ITD 216 / ((2009) 30 SOT 374 /122 TTJ 577 (SB)  (Mum)(Trib) is approved.  (AY. 2007-08, 2008-09)