2024 (7) TMI 851 - SCH - Income Tax

Maintainability of appeal before Supreme court - low tax effect - TDS u/s 201(1) - TDS u/s 195 - assessment order in the hands of the non-resident payee - payment for purchase of subscription as taxable as per the provisions of Article 7 read with Article 5 of the India Singapore Double Taxation Avoidance Agreement ( DTAA ) As decide by HC 2023 (9) TMI 555 - BOMBAY HIGH COURT in order to treat the payer as an assessee-in-default, it is of utmost importance that income so paid or credited to the account of payee is capable of being brought within the purview of tax net and such assessment can be lawfully made on the payee - As assessment should be lawfully made by AO on the payee/recipient, since that has not been done, the order of AO under Section 201(1) read with Section 201(1A) of the Act was unsustainable. HELD THAT - In view of the statement made, the special leave petition is dismissed on account of low tax effect. However, the question of law is left open.

Summary

Issues: Dismissal of appeal due to low tax effect, question of law left open, disposal of pending applications.

In the present case, the counsel for the petitioner requested the dismissal of the appeal due to the low tax effect involved. The Supreme Court, after considering the statement made by the counsel, dismissed the special leave petition on the grounds of low tax effect. Despite the dismissal, the Court explicitly mentioned that the question of law remains open for future consideration. Additionally, any pending application(s) were directed to be disposed of in light of this judgment. The Court, through this decision, highlighted the significance of tax effect in determining the course of legal proceedings, while also ensuring that the question of law remains subject to further examination if necessary.