2024 (8) TMI 887 - SCH - Income Tax

Review petition - Enforceability of treaty - Necessary notification not issued by the Government for brining the treaty into force - Most Favoured Nation (MFN) - Indian treaties with countries that are members of the Organisation for Economic Cooperation and Development ( OECD ) - protocol for changing terms or conditions in treaty - lowering of rate of taxation at source on dividends, interest, royalties or fees for technical services (hereafter FTS ) - bilateral treaties in question are between India and Netherlands, France, and Switzerland, respectively - As decided by SC 2023 (10) TMI 981 - SUPREME COURT notification u/s 90(1) is necessary and a mandatory condition for a court, authority, or tribunal to give effect to a DTAA, or any protocol changing its terms or conditions, which has the effect of altering the existing provisions of law. The fact that a stipulation in a DTAA or a Protocol with one nation, requires same treatment in respect to a matter covered by its terms, subsequent to its being entered into when another nation (which is member of a multilateral organization such as OECD), is given better treatment, does not automatically lead to integration of such term extending the same benefit in regard to a matter covered in the DTAA of the first nation, which entered into DTAA with India. In such event, the terms of the earlier DTAA require to be amended through a separate notification under Section 90. The interpretation of the expression is has present signification. Therefore, for a party to claim benefit of a same treatment clause, based on entry of DTAA between India and another state which is member of OECD, the relevant date is entering into treaty with India, and not a later date, when, after entering into DTAA with India, such country becomes an OECD member, in terms of India s practice. HELD THAT - Permission to file the review petition(s) is granted. Prayer for listing the review petitions in open Court is rejected. Delay condoned. We have carefully perused the review petitions as also the grounds in support thereof. In our opinion, no case for review of the order dated 19.10.2023 is made out. The review petitions are, accordingly, dismissed. Pending application(s), if any, shall stand disposed of.

Summary

The Supreme Court granted permission to file the review petition(s) but rejected the prayer for listing them in open court. The court dismissed the review petitions as it found no case for review of the order dated 19.10.2023. Pending applications were disposed of.