ITA Nos. 4310/MUM/2023 and 979/MUM/2025

Parties Involved

Facts Summary

The assessee, SLACK TECHNOLOGIES LIMITED, a non-resident corporate entity incorporated in Ireland, filed appeals against the final assessment orders passed under sections 143(3) and 144C(13) of the Income Tax Act, 1961, for the assessment years 2021-22 and 2022-23. The assessee sells its communication software on a subscription basis and did not report the subscription charges as royalty in its income returns. The Assessing Officer treated the subscription fees as royalty under section 9(1)(vi) of the Act and Article 12(3) of the India-Ireland Double Taxation Avoidance Agreement. The Dispute Resolution Panel, however, held that the subscription fees were for services provided through Software as a Service (SaaS) and not for the sale of software. The Tribunal considered the arguments and judicial precedents from both parties and concluded that the subscription fees were not in the nature of royalty.…

Legal Issues

• 1. Whether the subscription fees received by the assessee are in the nature of royalty?

Judgment Outcome

Decided in favour of Assessee.

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