M/S. INFORMATICA LLC,BANGALORE vs. ASSISTANT COMMISSIONER OF INCOME TAX, (INTERNATIONAL TAXATION), CIRCLE- 1(2), BANGALORE

IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH : BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE – PRESIDENT AND SHRI KESHAV DUBEY, JUDICIAL MEMBER

IT(IT)A No. 220/Bang/2023 Assessment Year : 2019-20

Informatica LLC, C/o Informatica Business The Assistant Commissioner of Solutions Private Limited, Income Tax, No. 66/1, Bagmane Commez International Taxation, Vs. 02, Bagmane Tech Park, Circle – 1(2), Bangalore – 560 093. Bengaluru. PAN: AACCI2354Q APPELLANT RESPONDENT

: Ms. Tanmayee Rajkumar, Assessee by Advocate : Smt. Divya K.J, CIT – DR Revenue by

Date of Hearing : 07-05-2026 Date of Pronouncement : 24-07-2026

ORDER PER PRASHANT MAHARISHI, VICE – PRESIDENT

IT(IT)A No. 220/Bang/2023 Page 2 of 6 DRP”) dated 16 December 2022, and in relation to the draft assessment order passed under section 144C of the Act on 31 March 2022. 2. The sole dispute in this appeal concerns the taxability in India of the assessee’s receipts. The learned Assessing Officer held that the total consideration of ₹53,34,48,706 received by the assessee comprised income of ₹22,72,62,480 from the sale of software, taxable as royalty under Article 12 of the India-USA Double Taxation Avoidance Agreement, and ₹30,61,86,226 from ancillary support services, taxable as fees for technical services under Article 12(4)(a) of the said agreement. 3. Briefly, the assessee is a company incorporated under the laws of the United States of America and is engaged in developing, manufacturing and distributing software products, along with providing ancillary services. During the relevant assessment year, the assessee raised invoices aggregating to ₹53,34,48,734 on Indian customers towards the sale of software and provision of ancillary services. Although the Indian customers deducted tax at source on these payments, the assessee, in its return of income filed on 30 September 2019, treated the said amount as exempt income not chargeable to tax in India. The learned Assessing Officer noted that the assessee had claimed that receipts from the sale of software and related services were not taxable as royalty or fees for technical services under the India-USA Double Taxation Avoidance Agreement. 4. The learned Assessing Officer examined the assessee’s website to ascertain the true nature of the products and services sold in India. He noted that Informatica provides application programming software enabling application integration on an AI-powered platform for data integration and analysis, commonly described as an integrated platform as a service. He further observed that Informatica also provides services to its end users. According to him, the integration software is supplied with installation assistance, regular updates and error correction, all of which require technical knowledge and know-how of the software to ensure seamless use by end customers. The learned Assessing Officer also examined the end-user licence agreement between the assessee and Asian Paints and noted that the assessee had agreed to provide support services in respect of the above aspects. He further found that the assessee operates in India through independent reseller partners, service partners and its subsidiary, Informatica Business Solutions.

IT(IT)A No. 220/Bang/2023 Page 3 of 6 5. The learned Assessing Officer found that customers in India were given access to the assessee’s internet-based service solution platform and operated across different sectors, as discussed in the assessment order with reference to ICICI and Emphasis. He noted that these entities maintained their own databases across multiple platforms and that the intelligent integration of such data formed an important source of information for their business activities, including identifying valued and potential customers and possible security threats. He therefore held that the software product sold by the assessee involved the use of a patent, invention, model, design, secret formula or process, trademark or similar property, namely Informatica LLC’s AI tool known as “Claire”, and that the receipts were akin to royalty income. He further held that receipts from ancillary services were in the nature of technical consultancy and constituted fees for technical services. Referring to sections 5(2) and 9 of the Income Tax Act, he concluded that the above sums were chargeable to tax in India under the source rules applicable to non-residents. He treated ₹22,72,62,480 from the sale of software products as royalty under Explanation 2 to section 9(1)(vi) of the Act, and ₹30,61,86,226 from ancillary support services as fees for technical services under Explanation 2 to section 9(1)(vii) of the Act. He also referred to Article 12 of the India-USA Double Taxation Avoidance Agreement and held that ₹22,72,62,480 was taxable as royalty and that the ancillary services were technical consultancy services taxable under Article 12(4)(a) of the said agreement. Accordingly, he passed the draft assessment order under section 143(3) of the Act on 31 March 2022, determining the assessee’s total income at ₹53,34,48,706 and taxing the same at 10% on a gross basis under section 115A of the Act read with Article 12 of the Double Taxation Avoidance Agreement. 6. The assessee filed objections before the learned Dispute Resolution Panel. The Panel, in paragraph 2.1.2 of its directions, noted that in the assessee’s own case for an earlier year it had already held that consideration paid by Indian customers or end users for the transfer of the right to use a software computer program in respect of copyright fell within the scope of royalty. Accordingly, it upheld the action of the learned Assessing Officer. The Panel also held, on similar reasoning, that support services provided by the assessee to its end-user customers were chargeable to tax and therefore upheld the Assessing Officer’s action on that issue as well. The learned Dispute Resolution Panel issued its

IT(IT)A No. 220/Bang/2023 Page 4 of 6 directions on 16 December 2022. Pursuant thereto, the final assessment order was passed on 27 January 2023, determining the assessee’s total income at ₹53,34,48,706. 7. Aggrieved by the same, the assessee is in appeal before us. The learned authorised representative, Ms. Tanmayee Rajkumar, Advocate, submitted that an identical issue had arisen in the assessee’s own case for earlier years and had reached the Hon’ble Karnataka High Court. She submitted that, in Income Tax Appeal No. 277 of 2024 dated 8 October 2025, relating to Assessment Year 2015-16 and involving identical facts and circumstances, the Hon’ble High Court upheld the order of the coordinate bench, wherein the impugned income was held to be not chargeable to tax in India. She further submitted that, at that stage, the learned senior standing counsel for the Revenue had stated that the issue was squarely covered by the decision of the Hon’ble Supreme Court in Engineering Analysis Centre of Excellence Private Limited v. Commissioner of Income Tax and another [2021] 432 ITR 471 ( SC), 2022 (3) SCC 321, 2021 (3) SCALE 166, [2021] 125 taxmann.com 42 ( SC) and had requested the Hon’ble High Court to grant liberty to the Revenue to reopen the case if the review petition filed before the Hon’ble Supreme Court succeeded. She also furnished a chart showing that, for Assessment Year 2015-16, the coordinate bench, by order dated 5 August 2021 in IT(IT)A No. 2867/Bang/2018, had decided the issue in favour of the assessee, which was affirmed by the Hon’ble Karnataka High Court in ITA No. 672 of 2023 dated 8 October 2025. She further stated that, for Assessment Year 2016-17, the coordinate bench, in IT(IT)A No. 913/Bang/2019 dated 5 July 2021, following its decision for the earlier years, accepted the assessee’s stand on the same issue. For Assessment Year 2018-19, the Assessing Officer accepted the assessee’s submissions and passed an assessment order on 23 April 2021 accepting the returned income; revision proceedings initiated under section 263 of the Income Tax Act were subsequently dropped. She also submitted that, for Assessment Year 2020-21, no action was taken against the assessee regarding the chargeability of the above sum as its income. With respect to Assessment Year 2021-22, she submitted that the coordinate bench had passed an order in IT(IT)A No. 1099/Bang/2023, which was upheld by the Hon’ble Karnataka High Court in ITA No. 277 of 2024 on 8 October 2025. Accordingly, she contended that the issue is squarely covered in

IT(IT)A No. 220/Bang/2023 Page 5 of 6 favour of the assessee by the earlier orders of the coordinate benches, which are binding on us, and which have also been affirmed by the Hon’ble High Court. She therefore submitted that the assessee’s appeal deserves to be allowed. 8. The learned authorised representative also filed paper books comprising 428 pages, containing the assessment proceedings, the assessee’s replies before the learned Dispute Resolution Panel and the learned Assessing Officer, and copies of the relevant orders. 9. The learned Departmental Representative, Smt. Divya K.J., CIT-DR, vehemently supported the action of the learned Assessing Officer, which was taken pursuant to the directions of the learned Dispute Resolution Panel.

IT(IT)A No. 220/Bang/2023 Page 6 of 6 12. Ground No. 1 is general in nature, and no specific arguments were advanced in respect thereof. Ground No. 5, which relates to the initiation of penalty proceedings, is premature. Accordingly, both grounds are dismissed. 13. In the result, the appeal of the assessee is partly allowed.

Order pronounced in the open court on 24th July, 2026.

Sd/- Sd/-

(KESHAV DUBEY) (PRASHANT MAHARISHI) JUDICIAL MEMBER VICE-PRESIDENT Bangalore, Dated, the 24th July 2026.

Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. CIT(A) By order

Assistant Registrar, ITAT, Bangalore