The dispute involves John Wiley & Sons, Inc., a US-based publisher, and the Deputy Commissioner of Income Tax (DCIT) International Taxation, Circle 3(1)(1), Delhi, regarding the tax classification of revenues from online journals and subscriptions.
Case Number: ITA 1873/DEL/2022
Appellant: John Wiley & Sons, Inc, USA
Respondent: DCIT International Taxation, Circle 3(1)(1), Delhi
Assessment Year: 2019-20
Order Type: Final Tribunal Order
Date of Order: 2023-02-20
Pronounced On: 2023-02-20
The appeals were filed against the orders of the assessing officer dated 20.08.2022 and 29.09.2021. The primary issue was the classification of receipts from Indian customers for the sale of online journals and subscription licenses, which the company claimed as business income contrary to royalties or fees for technical services (FTS/FIS) as alleged by the revenue authorities.
The Tribunal, consisting of Shri N. K. Billaiya, Accountant Member, and Shri Anubhav Sharma, Judicial Member, heard the case. It was concluded that the final order issued by the assessing officer was on a non-existing entity due to the previous merger of Wiley Subscription Services Inc into John Wiley & Sons Inc, and therefore, the order was void ab initio.
The Tribunal allowed the appeal in favor of John Wiley & Sons, Inc, stating that the assessing officer’s order was not sustainable. Consequently, both the appeals related to the assessment years 2018-19 and 2019-20 were allowed, rendering the stay applications infructuous. This decision marks a significant point concerning the tax liabilities of international companies in the digital content distribution sector.
Order pronounced in the open court on 20/02/2023.
John Wiley & Sons, Inc. vs DCIT: Dispute Over Tax Classification of Online Journals for 2019-20
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