Coursera Inc. v. ITO TDS (2022) 285 Taxman 6 / 210 DTR 101 / 325 CTR 237 (Delhi)(HC)

S. 197 : Deduction at source-Certificate for lower rate-Education service-American university-e-platform operator-Equalisation levy at rate of 2 per cent on receipts from its Indian customers-Directed to pass a denovo order-DTAA-India-USA [S. 9(1) 10(5) Art. 12(5)(c)]

Petitioner-university, an e-platform operator and a tax resident of USA, filed application seeking issue of certificate under section 197 for nil deduction of tax for financial year 2021-22. Assessing Officer rejected thee  application and directed petitioner to hold TDS at rate of 10 per cent on receipts from Indian customers on ground that receipts were in form of royalty/FTS and petitioner would not be eligible for benefit of article 12(5)(c) of DTAA. On writ the petitioner claimed that receipts could not be characterised as royalty or FTS as services rendered were neither technical nor consultancy in nature and further, it had already paid equalisation levy at rate of 2 per cent on said receipts  and also the  order did not take into account impact of amendment carried out in section 10(50) which came into effect from 1-4-2021, to exclude receipts of petitioner which were subject to withholding tax at source to extent such receipts were eligible to equalisation levy. Court held that since the  order did not discuss about impact of amendment in section 10(50) and applicability of various articles of DTAA, same was to be set aside and Assessing Officer was to be directed to pass a de novo reasoned order after taking into account amendments made to provisions of section 10(50) of the Act.  (AY. 2022-23)

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