BBC STUDIOS DISTRIBUTION LIMITED,UNITED KINGDOM vs. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE INTERNATIONAL TAX 1(1)(2), NEW DELHI

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ITITA 165/DEL/2026Status: DisposedITAT Delhi27 July 2026AY 2022-237 pages
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What did the Tribunal hold?

The Tribunal held that the delay in filing the appeal before the CIT(A) was to be condoned. The assessee had a sufficient cause for the delay, stemming from a bona fide belief regarding the appealability of the issue. The Tribunal, following a decision in a group case (BBC World Distribution Ltd. for AY 2024-25), decided to remit the matters back to the CIT(A) for fresh adjudication. The primary issue of whether the license fee of Rs. 95,10,490 constitutes 'Royalty' under Section 9(1)(vi) of the Act or Article 13 of the India-UK DTAA was to be decided on merits by the CIT(A). The CIT(A) was directed to consider additional documents/evidence, potentially seek a remand report from the AO, and grant three effective opportunities to the assessee to present its case. The issue of refund of taxes deposited was implicitly linked to the final adjudication of the taxability of the license fee.

What were the facts?

The assessee, BBC Studios Distribution Ltd., a UK tax resident, is engaged in licensing content and distributing television channels globally. For Assessment Years 2021-22, 2022-23, and 2023-24, the assessee entered into agreements with its Indian group company, BBC Global News India Private Limited (BGNIPL), granting rights to distribute the 'CBeebies' channel in India. BGNIPL paid a license fee to the assessee, amounting to Rs. 95,10,490 for AY 2021-22. The assessee initially offered this license fee as 'Royalty' in its returns. The Centralized Processing Centre (CPC) issued intimations under section 143(1) treating the income as Royalty. The assessee filed appeals before the CIT(A) against these intimations, but these appeals were delayed by over three years. The CIT(A) dismissed the appeals due to this delay, without adjudicating on the merits.

What were the issues?

1. Whether the license fee received by the assessee for granting rights to distribute the TV channel constitutes 'Royalty' under Section 9(1)(vi) of the Income Tax Act, 1961, and Article 13 of the India-UK Double Taxation Avoidance Agreement (DTAA)? - Assessee's contention: The license fee does not constitute 'Royalty' under the Act or the DTAA. The assessee also argued that the CIT(A) erred in not adjudicating this claim despite having plenary appellate powers and that there is no estoppel against making a legitimate claim that reduces income. - Revenue's contention: Not recorded in the judgment. 2. Whether the delay in filing the appeal before the CIT(A) should be condoned? - Assessee's contention: The delay was due to a bona fide belief that an appeal could not be filed as no assessment/reassessment was pending, and the income was already offered for tax. Upon legal advice, the appeal was filed. The assessee also relied on ITAT orders in similar group cases remanding the issue to the CIT(A). - Revenue's contention: The Revenue did not raise any serious objection to the condonation of delay.

Which sections of the Income-tax Act were involved?

Section 9(1)(vi),Section 139(1),Section 143(1),Section 246A,Section 250,Section 253

AI-generated summary — verify with the full judgment below

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

Before: SH. VIKAS AWASTHY & SH. NAVEEN CHANDRA

For Appellant: Shri M. P. Lohia, Adv, Shri Ashish Agarwal (VC), Shri Anurag Singhal, CAs
For Respondent: Shri Rajesh Dhingra, Sr. D.R
Hearing: 14.07.2026Pronounced: 27.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘D’, NEW DELHI BEFORE SH. VIKAS AWASTHY, JUDICIAL MEMBER AND SH. NAVEEN CHANDRA, ACCOUNTANT MEMBER IT(IT)A Nos. 164, 165 & 166/Del/2026 (Assessment Years : 2021-22, 2022-23 & 2023-24) BBC Studios Distribution Vs. DCIT Ltd. International Taxation 1 Television Centre, Circle-1(1)(2) 101 Wood Lane, London Civic Centre, Minto Road W 12 7FA, United Kingdom New Delhi -110 002 999 999 PAN No. AACCB 5285 F (APPELLANT) (RESPONDENT) Assessee by Shri M. P. Lohia, Adv., Shri Ashish Agarwal (VC) Shri Anurag Singhal, CAs Revenue by Shri Rajesh Dhingra, Sr. D.R. Date of hearing: 14.07.2026 Date of Pronouncement: 27.07.2026 ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER :

The above captioned three appeals are preferred by the assessee against the orders of Commissioner of Income Tax (Appeals)-42, Delhi dated 27.01.2026 (for A.Ys. 2021-22 & 2022-23) and dated 28.01.2026 (for A.Y. 2023-24), passed by Income Tax Department, Delhi (hereinafter referred to as ‘ld. AO), under section 250 of the Income

IT(IT)A Nos. 164, 165 & 166/DEL/2026 [A.Ys 2021-22, 2022-23 and 2023-24] BBC Studios Distribution Ltd. vs. DCIT Tax Act, 1961 (hereinafter referred as ‘the Act’) against the intimation orders dated 31.03.2022 issued by the CPC, Bengaluru under section 143(1) of the Act for Assessment Year 2021-22, dated 24.11.2022 issued by the CPC, Bengaluru under section 143(1) of the Act for Assessment Year 2022-23 and dated 24.11.2023 issued by the CPC, Bengaluru under section 143(1) of the Act for Assessment Year 2023- 24. 2. Since the above captioned three appeals were heard together and the facts in issues and grounds are identical (except amounts), all the three appeals are being disposed of by this common order for the sake of convenience and brevity. 3. Assessee has raised following grounds of appeal in I(IT)TA No.164/Del/2026 for A.Y. 2021-22 : “On the facts and circumstances of the case and in law, the Appellant respectfully craves leave to prefer an appeal under section 253 of the Income-tax Act, 1961 (‘the Act’) against the order passed by the Hon’ble Commissioner of Income-tax (Appeals), Delhi - 42 [‘Hon’ble CIT(A)’] dated 27 January 2026 under section 250 of the Income-tax Act, 1961 (‘the Act’) on the following grounds, which are without prejudice to each other: General 1. On the facts and in the circumstances of the case and in law, the Hon’ble CIT(A) erred in treating the license income from grant of right to distribute TV channel of Rs. 95,10,490 taxable as Royalty and thereby taxes of Rs. 10,38,545 deposited thereon is collected excessively in violation of the provisions of the Act. License fee received for granting rights for distribution of TV channel does not constitute ‘Royalty’ under the Act or India-UK Double Taxation Avoidance Agreement (‘DTAA’) 2. On the facts and in the circumstances of the case and in law, the Hon’ble CIT(A) erred in rejecting the application for condonation of delay in filing the appeal under section 246A of the Act.

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IT(IT)A Nos. 164, 165 & 166/DEL/2026 [A.Ys 2021-22, 2022-23 and 2023-24] BBC Studios Distribution Ltd. vs. DCIT

3.

On the facts and in the circumstances of the case and in law, the Hon’ble CIT(A) erred in rejecting the fresh claim merely because it was not made in the return of income, despite having plenary appellate powers and disregarding the settled principle that there is no estoppel in law to make a legitimate claim even if it results in income lower than the returned income. 4. On the facts and in the circumstances of the case and in law, the Hon’ble CIT(A) has erred in not adjudicating on the Appellant’s contention that the license fee of INR 95,10,490 earned for granting distribution rights in relation to the TV channel does not fall within the definition of “Royalty” under section 9(i)(vi) of the Act or Article 13 of the India–UK DTAA, and accordingly, is not chargeable to tax in India. 5. On the facts and in the circumstances of the case and in law, the Hon’ble CIT(A) erred in not directing the Ld. AO to grant refund of INR 10,38,545, being the tax deducted at source on the license fee earned by the Appellant during the relevant year. The Appellant respectfully prays that its claim that the license fee income is not liable to tax be allowed, and that the Ld. AO be directed to grant a refund of the taxes deposited in respect thereof. The appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, at any time before or at the time of appeal, so as to enable the Hon’ble Tribunal to decide the appeal in accordance with the law.” 4. Brief facts of the case are that BSDL (Formerly known as BBC Worldwide Ltd.) is a company incorporated in and tax resident of United Kingdom (‘UK’). BSDL is engaged in the business of licensing content and distribution of television channels globally. BSDL entered into an agreement dated 02.02.2015 with one of its group companies in India, BBC Global News India Private Limited ('BGNIPL') [formerly known as BBC World (India) Private Ltd.] under which BGNIPL was granted rights to distribute a kids entertainment channel named 'CBeebies' (hereinafter referred to as 'Channel') to cable operators/MSOs etc. in India and other specified territories. The

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IT(IT)A Nos. 164, 165 & 166/DEL/2026 [A.Ys 2021-22, 2022-23 and 2023-24] BBC Studios Distribution Ltd. vs. DCIT agreement stipulates that BGNIPL cannot make any changes, amendments, modifications, additions or deletions to the content of the Channel. Upon launch of the Channel in territory of India, the rights granted by BSDL to BGNIPL under the 2015 agreement were effectuated and a detailed agreement setting out the terms and conditions was entered on 24.06.2020 for distribution of CBeebies Channel. As a consideration for these rights, BGNIPL is required to pay an agreed percentage of distribution revenue earned as 'license fee' to BSDL. For the year under consideration, license fee paid/payable by BGNIPL to BSDL amounted to Rs. 95,10,490/-. The aforesaid license fee has been offered to tax in India by BSDL as 'Royalty' in the Return of Income ('ROI') filed under section 139(1) of the Act. The total income earned by the BSDL from India consists of income earned from (i) third parties for content licensing and (ii) license fee earned from BGNIPL in respect of distribution rights of CBeebies Channel. A return of income was filed and processed by the Centralized Processing Centre ('CPC') and Intimation under section 143(1) of the Act dated 31.03.2022 was issued treating the income received from BGNIPL as Royalty. 5. At the outset, learned Counsel of the assessee stated that the CIT(A) has dismissed the appeal due to uncondoned delay of 3 years, 3 months and 22 days in filing the appeal before him. The ld AR prayed

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IT(IT)A Nos. 164, 165 & 166/DEL/2026 [A.Ys 2021-22, 2022-23 and 2023-24] BBC Studios Distribution Ltd. vs. DCIT for condonation of delay and to remit the matter to the CIT(A) for proper adjudication. The ld AR presented ITAT orders in the group case of BBC World Distribution Ltd for AY 2024-25 where, on identical issues, the ITAT in ITA 7619/Del/2025 has remanded the issue back to the CIT(A). 6. Learned DR on the other hand did not raise any serious objection with this regard. 7. We have heard the rival submissions and perused the material available on record. We find that the intimation u/s 143(1) was issued to the assessee on 31.03.2022 and the appeal against the said intimation was filed before the CIT(A) on 22.08.2025, a delay of more than 3 years. The assessee explained before the CIT(A) that the delay is because of the bona fide belief that as there was no assessment /reassessment pending, the claim of non-taxability of License Fee already offered for tax, cannot be made. However, on receipt of advice from legal counsel that appeal can be made to CIT(A), the assessee has filed a delayed appeal before the CIT(A) with a request to condone the delay. The CIT(A) however, did not condone the delay and dismissed the appeal on account of delay. 8. We are of the considered view that the assessee had sufficient cause for delay in filing appeal before the CIT(A). We hereby condone

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IT(IT)A Nos. 164, 165 & 166/DEL/2026 [A.Ys 2021-22, 2022-23 and 2023-24] BBC Studios Distribution Ltd. vs. DCIT the delay of filing of appeal before the CIT(A). Following the decision of ITAT in the case of another group concern, BBC World Distribution Ltd for AY 2024-25 (supra), we remit the issues to the file of the CIT(A) for a fresh adjudication on the issue of taxability or otherwise of the license fee of INR 95,10,490 earned for granting distribution rights in relation to the TV channel, as “Royalty” under section 9(i)(vi) of the Act or Article 13 of the India–UK DTAA. The CIT(A) is directed to take into account the additional documents/evidences while adjudicating the issues involved and may seek a remand report from the AO. The CIT(A) is directed to accord three effective opportunities to the assessee to present its case. The assessee is likewise directed to avail the opportunities and represent his case and present documents/materials as and when required by the CIT(A). The grounds are decided on the aforesaid terms for all the three appeals. 9. In the result, all the three appeals are allowed for statistical purposes. Order pronounced in the open court on 27.07.2026 Sd/- Sd/- (VIKAS AWASTHY) (NAVEEN CHANDRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Date:- 27.07.2026 Priti Yadav, Sr. Ps*

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IT(IT)A Nos. 164, 165 & 166/DEL/2026 [A.Ys 2021-22, 2022-23 and 2023-24] BBC Studios Distribution Ltd. vs. DCIT

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