Held that once the assessee was held not liable to deduct the tax at source at all, merely because subsequently the foreign company was held liable to be taxed in India, the assessee could not be treated as in default. This was on surmises and conjectures. Whatever the consequences on the pending proceedings against or initiated by the Netherlands company pending in the High Court, the necessary consequences shall follow. However, at present the observations of the High Court that if in the assessment proceedings in the case of the Netherlands company, the Netherlands company was liable to be taxed in India, the assessee would also be treated as in default, were quashed and set aside.(AY 2003-04)
Van Oord Acz India Pvt. Ltd. v. CIT (2023)453 ITR 214 / 292 Taxman 405/ 226 DTR 89 (SC) Editorial: Observation of Delhi High Court set aside, Van Oord Acz India Pvt. Ltd. v. CIT (2010) 323 ITR 130 (Delhi)(HC)
S. 195 : Deduction at source – Non-resident -Observations of High Court that if in assessment proceedings of Netherlands company, that company held liable to be taxed in India and assessee would also be treated as in default -Observation was quashed. [S.40(a)(i)), Art. 136]