2023 (5) TMI 487 - SCH - Income Tax

TDS u/s 195 - 'royalty payments' as defined under Explanation II to Section 9(1)(vi) - amounts paid by the concerned persons resident in India to non-resident, foreign software suppliers - As per HC amounts paid by resident Indian end-users/distributors to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does not give rise to any income taxable in India, as a result of which the persons referred to in section 195 were not liable to deduct any TDS u/s 195 - HELD THAT - The impugned judgment has been passed by the High Court relying upon the decision of this court in the case of Engineering Analysis Centre of Excellence Private Limited Vs. Commissioner of Income Tax and Anr. 2021 (3) TMI 138 - SUPREME COURT We are informed that the Review Petition titled as Commissioner of Income Tax International Taxation and Anr. Vs. Engineering Analysis Centre of Excellence Private Limited is pending. We are also informed that another Division Bench in Civil Appeal 20(10) TM22I 665 - SC ORDER has disposed of the said appeals by giving liberty to the petitioner that in case any order is passed in the review proceedings, it will be open to the parties to rely upon the said order. We also dispose of the petition on the same terms and it shall be open to the parties herein to initiate appropriate proceedings relying upon the said order passed in review.

Summary

Issues:
Delay condonation; Impugned judgment based on previous decision; Review petition pending; Disposal of petition based on pending review; Parties allowed to rely on review order.

Delay Condonation:
The Supreme Court, comprising Hon'ble Mr. Justice Krishna Murari and Hon'ble Mr. Justice Ahsanuddin Amanullah, first condoned the delay in the case. The impugned judgment by the High Court was based on a previous decision of the Supreme Court in the case of "Engineering Analysis Centre of Excellence Private Limited Vs. Commissioner of Income Tax and Anr." The Court noted that a review petition titled "Commissioner of Income Tax International Taxation and Anr. Vs. Engineering Analysis Centre of Excellence Private Limited" is pending.

Review Petition Pending:
The Court acknowledged the pendency of Review Petition No. 1422 of 2021 and mentioned that another Division Bench had disposed of certain appeals, granting liberty to parties to rely on any order passed in the review proceedings. In light of these circumstances, the Court decided to dispose of the present petition on similar terms, allowing the parties to initiate appropriate proceedings based on the review order once it is passed.

Disposal of Petition Based on Pending Review:
The Supreme Court, therefore, disposed of the Special Leave Petition in accordance with the mentioned terms. Any pending applications were also disposed of as a part of this order. The parties were granted the liberty to rely on the order that would be passed in the pending review proceedings, ensuring that their rights and interests are protected based on the outcome of the review petition.