ASIAN HONDA MOTOR CO. LTD, THAILAND,BANGKOK vs. ACIT, (INTERNATIONAL TAX), CIRCLE- NOIDA, NOIDA

ITITA 244/DEL/2026Status: DisposedITAT Delhi10 August 202610 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal noted that the assessee's sole substantive grievance pertains to the taxability of service receipts, which the assessee claims are covered under Article 7 of the India-Thailand DTAA read with Section 90(2) of the Act. The Tribunal also observed that a coordinate bench had previously passed an order in ITA No. 711/Del/2025 for the same assessment year, restoring the issue back to the DRP. Adopting judicial consistency to avoid contrary findings, the Tribunal decided to restore the assessee's substantive grievance regarding the service receipts back to the learned DRP for fresh adjudication. All other pleadings, factual or legal, were kept open. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Asian Honda Motor Co. Ltd., is appealing against the order of the Commissioner of Income Tax (International Taxation) (Appeals), Noida, for Assessment Year 2022-23. The impugned order was passed in consequence to directions from the Dispute Resolution Panel (DRP) under Section 144C(5) of the Income Tax Act, 1961. The primary dispute concerns the taxability of service receipts amounting to INR 10,84,21,790. The assessee contends these receipts should not be taxed in India due to the absence of a Permanent Establishment (PE) and the India-Thailand Double Taxation Avoidance Agreement (DTAA). The assessment order, following DRP directions, treated these receipts as taxable under Article 22 ('Other Income') of the India-Thailand DTAA.

What were the issues?

1. Whether service receipts amounting to INR 10,84,21,790 are taxable in India under Article 22 ('Other Income') of the India-Thailand DTAA, or if they should be treated as business profits under Article 7, thereby not being taxable in the absence of a Permanent Establishment (PE) in India, as argued by the assessee. The assessee relies on the absence of a Fees for Technical Services (FTS) clause in the DTAA and the established position for AY 2020-21 and earlier years. The revenue, through the AO/DRP, contends these receipts are taxable under Article 22. 2. Whether the AO erred in initiating penalty proceedings under Section 270A of the Act, as argued by the assessee. The judgment does not record specific arguments from the revenue on this point.

Which sections of the Income-tax Act were involved?

Section 144C(5),Section 90(2),Section 270A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘D’, NEW DELHI

Before: SHRI SATBEER SINGH GODARA

For Respondent: Dr. Shalini Verma, CIT(DR)
Hearing: 27.07.2026Pronounced: 10.08.2026

PER STABEER SINGH GODARA, JM: This assessee’s appeal for Assessment Year 2022-23 arises against the Commissioner of Income Tax(International Taxation) (Appeals) (for short, ‘CIT(A)’), Noida’s final assessment order dated 25.03.2026 passed in DIN & order No. ITBA/GEA/M/254/2025-26/1087990751(1), framed in consequence to the Dispute Resolution Panel-2 (“DRP”), New Delhi’s directions dated 26.02.2023, involving proceedings u/s 144C(5) of the Income Tax Act, 1961; hereinafter referred to as, “the Act”.

2 Heard both the partie

The order continues below.

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