Case Number: ITA 2312/DEL/2022
Appellant: Curtis, Mallet-Prevost, Colt & Mosle LLP, New York, USA
Respondent: ACIT, Circle1 International Taxation(2)(1), New Delhi
Assessment Year: 2018-19
Case Filed on: 2022-09-21
Order Type: Final Tribunal Order
Date of Order: 2022-11-16
Pronounced on: 2022-11-16
This case involves Curtis, Mallet-Prevost, Colt & Mosle LLP, a US-based law firm, which faced issues with the Indian tax authorities over the taxability of its income from legal services provided in India. The firm represented the Government of India in international arbitration and claimed non-taxability of their fees in India based on the India-USA Double Taxation Avoidance Agreement (DTAA).
The core issue was whether the firm’s employees stayed in India for more than 90 days in the fiscal year, which would affect the taxability of their income under Article 15 of the DTAA. Due to the COVID-19 pandemic, the firm faced challenges in presenting relevant documentation during the initial assessment.
The appeal to the ITAT was based on the inadequate consideration of documentation by the Dispute Resolution Panel (DRP) and the Assessing Officer (AO). The firm subsequently presented additional evidence, including passports and travel records, to prove the limited duration of their employees’ stay in India.
The ITAT found that the DRP and the AO did not adequately address the new evidence, leading to a decision to remand the matter back to the DRP for re-evaluation. This decision underscored the importance of comprehensive evidence review in determining tax liabilities under international agreements.
The case highlights the challenges faced by international firms in proving tax exemptions and the critical role of thorough documentation in international tax disputes. The outcome stresses the need for tax authorities to consider all evidences before reaching a conclusion, especially in complex international cases.
Order pronounced in the open court on 16th November, 2022.
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