ERNST AND YOUNG LLP vs ASSISTANT COMMISSIONER OF INCOME TAX, INTERNATIONAL CIRCLE-1-2-2, NEW DELHI
Parties Involved
Facts Summary
This petition challenges the certificate and order dated 17.09.2025 passed under Section 195 of the Income Tax Act, 1961, whereby the respondent authorized the petitioner to withhold tax at the rate of 5.25% on payments to be made to Ernst & Young (EMEIA) Services Limited. The petitioner contends that the respondent's decision is based on the existence of a virtual service permanent establishment of EMEIA in India, which is unsustainable in view of the decision in Clifford Chance Pte. Ltd. v. ACIT. The petitioner argues that the concept of a virtual service permanent establishment cannot be read into the relevant provisions of the India-UK Double Taxation Avoidance Agreement (DTAA). The respondent, on the other hand, asserts that the impugned order is justified and that the petitioner's case is misconceived.…
Decision in favour of
Assessee
Legal Issues
- 1. Whether the respondent is justified in issuing the impugned certificate and order rejecting the application of the petitioner for granting a Nil Withholding Certificate.
Judgment Outcome
Decided in favour of Assessee.
Precedents Relied Upon
7 precedents cited in this judgement.