The High Court held that the order passed u/s 201(1) and 201(1A) ...

Consultancy Fees Not Technical Services: Tax Order Invalid Due to Limitation Period Exceeded.

September 17, 2024

Case Laws     Income Tax     HC

The High Court held that the order passed u/s 201(1) and 201(1A) of the Income Tax Act for treating consultancy charges paid to a foreign company as fees for technical services u/s 9(1)(vii) was invalid as it was passed beyond the period of limitation of four years. The transaction or payment to the foreign company related to the financial years 2006-07, 2007-08, and 2008-09. However, the initiation of proceedings and the order were issued in 2014, which was clearly beyond the four-year limitation period. The High Court, following its earlier decisions, ruled in favor of the assessee and against the revenue authorities on this substantial question of law regarding the validity of the order passed beyond the limitation period for tax deducted at source (TDS) on consultancy charges paid to a foreign entity.

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