Question before the High Court was, whether the Respondent assessee while making payment on royalty to the payee Company failed to deduct tax at source, though required in law? .Dismissing the appeal of the revenue the Court held that, the insertions of Explanations 5 & 6 to s. 9(1)(vi) by the Finance Act 2015 w.r.e.f. 01.04.1976, even if declaratory and clarificatory of the law, will not apply to the DTAAs. The DTAAs are a bilateral agreement between two Countries and cannot be overridden by a unilateral legislative amendment by one Country. Followed, New Skies Satellite BV 382 ITR 114 (Delhi)(HC) & Siemens AG 310 ITR 320 (Bom.) (HC). Held not liable to deduct tax at source. (ITA No. 1395 of 2016, dt. 05.02.2019)
CIT v. Reliance Infocomm Ltd (2019) 179 DTR 112/ (2020) 314 CTR 551 (Bom.)(HC), www.itatonlin.org
S. 9(1)(vi) : Income deemed to accrue or arise in India–Royalty-The insertions of Explanations 5 & 6 to s. 9(1)(vi) by the Finance Act 2015 w.r.e.f. 01.04.1976, even if declaratory and clarificatory of the law, will not apply to the DTAAs. The DTAAs are a bilateral agreement between two Countries and cannot be overridden by a unilateral legislative amendment by one Country–Not liable to deduct tax at source -DTAA- India –Nether lands. [S. 195, Art.]