CADENCE DESIGN SYSTEM (INDIA) PVT. LTD vs. PRINCIPAL COMMISSIONER OF INCOME TAX-1

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ITA - 427 / 2024HC Delhi09 August 20242 pages
For Petitioner: ANANYA KAPOOR
AI SummaryAllowed

What did the High Court hold?

The High Court admitted the appeal for consideration, noting identical questions were already admitted in a related case. The appeal will be heard on specific questions of law regarding the determination of Dividend Distribution Tax (DDT) rates.

What were the facts?

The appellant, Cadence Design System (India) Pvt. Ltd., is appealing a decision by the Income Tax Appellate Tribunal. The appeal concerns the applicability of dividend distribution tax rates versus beneficial rates under Double Taxation Avoidance Agreements.

What were the issues?

Whether the DDT rate should be determined under Section 115-O of the Income Tax Act or if the beneficial rate under DTAAs applies to non-resident shareholders. The correctness of a Special Bench decision on this matter is also questioned.

Which sections of the Income-tax Act were involved?

Section 115-O

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$~57 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 427/2024

CADENCE DESIGN SYSTEM (INDIA) PVT. LTD .....Appellant Through: Mr. Salil Kapoor, Ms. Ananya Kapoor, Mr. Vibhu Jain and Mr. Tarun Chanana, Advs.

versus

PRINCIPAL COMMISSIONER OF INCOME TAX-1 .....Respondent Through: Mr. Sanjay Kumar, SSC along with Ms. Easha Kadian, JSC.

CORAM:

HON'BLE MR. JUSTICE YASHWANT VARMA

HON'BLE MR. JUSTICE RAVINDER DUDEJA

O R D E R %

09.08.2024

CM APPL. 45613/2024 (Ex.) Allowed, subject to all just exceptions. The application stands disposed of. ITA 427/2024

1.

We take note of identical questions which have already been admitted for consideration in ITA 405/2024. Consequently, we admit this appeal. 2. Let this appeal be tagged with ITA 405/2024 to be called on the date fixed. 3. The appeal shall stand admitted on the following questions of law:-

A. Whether in view of the facts and circumstances of the case and in law, the Income Tax Appellate Tribunal This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 12:04:49

[“Tribunal”] has erred in holding that the rate of Dividend Distribution Tax [“DDT”] shall be determined as per Section 115-O of the Income Tax Act, 1961 [“Act”] which is in substance and effect a tax on dividend income of non- resident shareholders and that the beneficial rate of tax of 15% under Article 10 of the India-Mauritius and India-US Double Taxation Avoidance Agreement [“DTAA”] would not be applicable? B. Whether the decision of the Special Bench of the Tribunal in the case of Deputy Commissioner of Income Tax v. Total Oil India P. Ltd. [(2023) 104 ITR (Trib) 1] lays down the correct law? 4. List again on 11.09.2024.

YASHWANT VARMA, J

RAVINDER DUDEJA, J AUGUST 09, 2024/RW This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 12:04:49

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