COURSERA INC.,CALIFORNIA vs. ASSISTANT COMMISSIONER OF INCOME TAX, NEW DELHI

PER VIKAS AWASTHY, JUDICIAL MEMBER: This appeal by the assessee is directed against assessment order dated 25.11.2025 passed u/s.143(3) r.w.s.144C of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’), for AY 2023-24.

ITITA 21/DEL/2026 COURSERA INC. this is a recurring issue. In AY 2020-21, the Assessing Officer (AO) for the first time held that the receipts from Indian educational institutions & corporate customers is in the nature of FTS. Thereafter, in AY 2021-22 & 2022-23 similar additions were made by the AO. The assessee carried the issue in appeal before the Tribunal for each of the aforesaid assessment years. The Tribunal vide order dated 21.08.2024 common for ITA No.2416/Del/2023 for AY 2020-21 and ITA No.3646/Del/2023 for AY 2021-22 decided the issue in favour of the assessee holding that the receipts from Indian educational institutions and corporate customers for providing online education/course content services are not in the nature of FTS. The ld. Counsel further pointed that for the subsequent assessment year i.e. AY 2022-23, the Tribunal in assessee’s appeal in ITA No.1958/Del/2025 decided on 19.05.2025 again held that the said receipts do not qualify as FTS under Article 12(4) of India-US DTAA.

Per contra, Shri M.S. Nethrapal, representing the Department supported the impugned 3. order and prayed for upholding the same.

S.No Customers/Clients Receipts 1. Receipts from individual customers Rs.69.23,32,168/- 2. Reciepts from Enterprise customers (i.e. Rs.1,31,31,59,555/- educational institutions/corporate customers) Total receipts from Indian Customers Rs.2,00,54,91,723/-

The assessee claimed aforesaid receipts as exempt under the provisions of India-US DTAA. The AO held that the receipts from enterprise customers i.e. educational institutions/corporate customers i.e. Rs.1,31,31,59,555/- fall within the ambit of FTS/FIS u/s.9(1)(vii) of the Act, as well as, DTAA and made addition of the said amount.

ITITA 21/DEL/2026 COURSERA INC. pointed that the Tribunal in assessee’s own case for AY 2020-21 and 2021-22 in ITA No.2416 & 3646/Del/2023 has decided the issue in favour of the assessee. The AO refused to follow the decision of Tribunal merely for the reason that the Department has not accepted the decision of Tribunal and has filed appeal against the same before the Hon’ble Delhi High Court.

“11. We have considered rival submissions in the light of decisions relied upon and perused the materials on record. Insofar as the activity of the assessee is concerned, it is established on record that the assessee provides a global online learning platform, wherein, various courses and degrees from leading universities and companies are provided. It is a fact on record that the contents of such courses and degrees are created by the concerned universities and companies and not by the assessee. The assessee acts as a mere facilitator between the concerned university/companies and the customers who want to undertake the courses of the concerned university/companies. The assessee merely provides access to the contents of the universities/companies through the platform on receipt of fees. 12. In fact, the Assessing Officer in the draft assessment order has clearly observed that the assessee is not an educational institution but an aggregation service provider, which brings educational learning on one platform. He has further stated that the course contents were not created by the assessee, but by the educational institutions. The customers who want to undertake course/degree get access to the contents/study materials through the platform provided by the assessee. Tests/examinations are also conducted by the concerned universities and companies and not by the assessee. Certificate for completion of course/degrees are also issued by the concerned universities/companies along with the logo of the assessee. These facts clearly indicate that while providing access to various courses/degrees, the assessee does not provide services of technical nature to the customers. In fact, while disposing of the objections raised by the assessee against the draft assessment order, learned DRP has clearly observed that the Assessing Officer has neither properly examined the agreement with Gandhi Institute of Technology and Management, nor has factually examined assessee’s contention that the terms and conditions of the agreement do not make the assessee a technical service provider. However, while passing the final assessment order, the Assessing Officer has completely ignored the directions of learned DRP. This is evident from the following observations of the Assessing Officer in the final assessment order “13. In response to the directions of Hon’ble DRP, the agreement of the assessee with GITAM was perused. It is seen that the observations regarding the agreement of the assessee with GITAM has been discussed in the Draft assessment order (refer to para 8.2 and 8.3). Accordingly, the final assessment order is being passed at total assessed income of Rs. 75,66,52,591/- taxable at as per provisions of the Income Tax Act, 1961 and applicable surcharge and cess. Necessary forms to be issued, applicable interest to be charged and credit of taxes, if any after verification from the ITD system are to be allowed. Penalty u/s 270A is being proposed to initiate as discussed in earlier paragraphs of the order. Detailed computation of tax payable and interest charged u/s 234A, 234B and 234C of the Act is being attached as part of the final order. Notice of demand is being issued.” 13. As could be seen from the highlighted portion of the observation of Assessing Officer, without properly implementing the directions of learned DRP, he has merely stated that the

ITITA 21/DEL/2026 COURSERA INC. agreement with Gandhi Institute of Technology and Management has been discussed in the draft assessment order. By these observations what the Assessing Officer implies is, learned DRP has issued directions without proper application of mind. This, in our view, is highly objectionable and against the provision contained under section 144C(13) of the Act. 14. Be that as it may, Assessing Officer’s findings/observations on the role of assessee are self- contradictory. While on one hand, the Assessing Officer has acknowledged the fact that the assessee is an aggregation service provider and not a content creator, in the same breath, he says that assessee’s contention that it is a mere aggregator of educational courses is not correct. The Assessing Officer has not brought on record any material to establish the fact that the assessee provides technical services through its online platform. Merely because the assessee has a customized landing page, it does not mean that the assessee provides technical services, that too, through human intervention. The Assessing Officer, in our view, has not been able to prove such fact. Even, assuming for argument’s sake, the services provided by the assessee is of technical nature, that by itself would not be enough to bring such receipts within the purview of Article 12(4) of India – USA DTAA, unless the make available condition is satisfied. Burden is entirely on the Revenue to prove that in course of rendition of services, the assessee has transferred technical knowledge, know-how, skill etc. to the service recipient, which enables him to utilize such technical knowledge, know-how, skill etc. independently without aid and assistance of the service provider. 15. In case of Elsevier Information Systems GmbH Vs. DCIT (supra), wherein identical nature of dispute was involved, the Coordinate Bench has held as under: “15. A customer/subscriber can access the data stored in the database by paying subscription. The Department held the subscription paid to Dun & Brad Street Espana, S.A., for accessing the data to be in the nature of royalty. The Authority for Advance Ruling after dealing with the issue ultimately concluded that the subscription received by Dun & Brad Street Espana, S.A., for allowing access to the database is not in the nature of royalty/fees for technical services. Following the aforesaid decision, the Tribunal, Ahmedabad Bench, in ITO v/s Cedilla Healthcare Ltd. [2017] 77 taxmann.com 309, while considering the nature of subscription paid to a U.S. based company viz. Chemical Abstract Services, which is in the same line of business and is stated to be the competitor of the assessee, held that the subscription paid for online access to the database system "scifinder" is not in the nature of royalty. The observations of the Tribunal, while deciding the issue in favour of the assessee, are as under:- "17. We find that as the treaty provision unambiguously requires, it is only when the use is of the copyright that the taxability can be triggered in the source country. In the present case, the payment is for the use of copyrighted material rather than for the use of copyright. The distinction between the copyright and copyrighted article has been very well pointed out by the decisions of Hon'ble Delhi High Court in the case of DIT v. Nokia Networks ΟΥ [2013] 358 ITR 259/212 Taxman 68/25 taxmann.com 225. In this case all that the assessee gets right is to access the copyrighted material and there is no dispute about. As a matter of fact, the AO righty noted that 'royalty' has been defined as "payment of any kind received as a consideration for the use of, or right to use of, any copyright of literary, artistic or scientific work" and that the expression "literary work", under section 2(o) of the Copyright Act, includes 'literary database' but then he fell in error of reasoning inasmuch as the payment was not for use of copyright of literary database but only for access to the literary database under limited non exclusive and non transferable licence. Even during the course of hearing before us, learned Departmental Representative could not demonstrate as to how there was use of copyright. In our considered view, it was simply a case of copyrighted material and therefore the impugned payments cannot be treated as royalty payments. This view is also supported by Hon'ble Bombay High Court's judgment in the case of DIT (International Taxation) v. Dun & Bradstreet Information Services India (P.) Ltd.

ITITA 21/DEL/2026 COURSERA INC. 16. The same view was again expressed by the Tribunal in DCIT v/s Welspun Corporation Ltd., [2017] 77 taxmann.com 165. If we examine the facts of the present appeal in juxtaposition to the facts of the decisions referred to herein before, it can be seen that the facts are almost identical and akin. In the referred cases the assessees were also maintaining databases of information collated from various journals and articles and allowed access to the users to use such material as required by them. Keeping in view the ratio laid down in the decisions (supra), the payment received by the assessee has to be held to have been received for use of copyrighted article rather than for use of or right to use of copyright. 17. Having held so, the next issue which arises for consideration is, whether the subscription fee can be treated as fees for technical services. As discussed earlier, it is evident that the assessee has collated data from various journals and articles and put them in a structured manner in the database to make it more user friendly and beneficial to the users/customers who want to access the database. The assessee has neither employed any technical/skilled person to provide any managerial or technical service nor there is any direct interaction between the customer/user of the database and the employees of the assessee. The customer/user is allowed access to the online database through various search engines provided through internet connection. There is no material on record to demonstrate that while providing access to the database there is any human intervention. As held by the Hon'ble Supreme Court in CIT v/s Bharati Cellular Ltd., [2010] 193 taxman 97 (SC) and DIT v/s A.P. Moller Maersk A.S., [2017] 392 ITR 186 (SC), for providing technical / managerial service human intervention is a sin qua non. Further, Article-12(4) of India-Germany Tax Treaty provides that payment for the service of managerial, technical or consultancy nature including the provisions of services by technical or other personnel can be termed as fees for technical services. None of the features of fees for technical services as provided under Article 12(4) of the India- Germany Tax Treaty can be found in the subscription fee received by the assessee. Further, the Department has not brought any material on record to demonstrate that the assessee has employed any skilled personnel having knowledge of chemical industry either to assist in collating articles from journals / magazines which are publicly available or through them the assessee provides instructions to subscribers for accessing the online database. The assessee even does not alter or modify in any manner the articles collated and stored in the database. In the aforesaid view of the matter, the subscription fee received cannot be considered as a fee for technical services as well. By way of illustration we may further observe, online databases are provided by Taxman, CTR online, etc. which are accessible on subscription not only to professionals but also any person who may be having interest in the subject of law. When a subscriber accesses the online database maintained by Taxman/CTR online etc. he only gets access to a copyrighted article or judgment and not the copyright. Similar is the case with the assessee. Therefore, in the facts of the present case, the subscription fee received by the assessee cannot be treated as royalty under Artile-12(3) of India- Germany Tax Treaty.” 16. Similar view was expressed by another Coordinate Bench in case of Relx Inc. Vs. ACIT (supra). In our view, the ratio laid down in these decisions squarely apply to the facts of the present appeal. In view of the aforesaid, we hold that the receipts do not qualify as FIS under Article 12(4) of India – USA tax treaty. 17. Thus, our decision above, would apply mutatis mutandis to ITA No. 3646/Del/2023 as well. 18. In the result, the appeals are allowed.” 7. Thereafter, in subsequent assessment year i.e. AY 2022-23, the assessee’s appeal in ITA no.1958/Del/2025 decided on 29.05.2025, the Tribunal again decided the issue in favour of the

ITITA 21/DEL/2026 COURSERA INC. assessee following the order of Tribunal in assessee’s own case dated 21.08.2024 for AY 2020- 21 and 2021-22. We find no reason to deviate from the consistent view taken by the Tribunal in assessee’s own case in the preceding assessment year when there is admittedly no change in factual matrix. Respectfully, following the decision of Coordinate Bench, we hold that the receipts from educational institutions/corporate customers aggregating to Rs.1,31,31,59,555/- do not fall within the ambit of FTS under Article 12(4) of India-US DTAA. Hence, the addition made by AO is directed to be deleted.

Order pronounced in the open court on Tuesday the 18th day of August, 2026. Sd/- Sd/- MANISH AGARWAL VIKAS AWASTHY ACCOUNTANT MEMBER JUDICIAL MEMBER Delhi Dated: 18-August-2026

ITITA 21/DEL/2026 COURSERA INC. Copy to: COURSERA INC., 2440 WEST EL CAMINO REAL, SUITE 500, 1 MOUNTAIN VIEW, CALIFORNIA, 94040, USA-940400 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(2)(1), INTERNATIONAL 2 TAXATION, CIVIC CENTRE, MINTO ROAD, NEW DELHI-110002 3 THE PCIT / CIT, 4 THE D.R., ITAT, DELHI BENCH 5 GUARD FILE