PRINCIPAL COMMISSIONER OF INCOME TAX vs. M/S GOLDMAN SACHS SERVICES PVT LTD

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ITA/126/2024HC KarnatakaKAHC01014956202403 September 2025Bench: S.G.PANDIT,K. V. ARAVIND8 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the substantial questions of law raised in the appeals were already answered by its Coordinate Benches in the cases of Director of Income Tax (International Taxation) vs. Abbey Business Services India (P) Ltd. and Deputy Commissioner of Income Tax (International Taxation) and others vs. M/s. Flipkart Internet Pvt. Ltd. The Court noted that these Coordinate Benches, after considering similar clauses and contentions raised by the revenue, had held that such technical services provided by the assessee were in the nature of reimbursement falling within the employer and employee relationship. Therefore, the Court concluded that the substantial questions of law no longer survived for consideration. The appeals were accordingly dismissed.

What were the facts?

The appeals were filed by the Principal Commissioner of Income Tax (International Taxation) and the Deputy Commissioner of Income Tax (International Taxation), Bangalore, against M/s. Goldman Sachs Services Pvt. Ltd. The appeals challenged orders passed by the Income Tax Appellate Tribunal (ITAT) for Assessment Years 2014-15, 2015-16, 2016-17, and 2018-19. The core of the dispute revolved around whether services rendered by the assessee were in the nature of Fees for Technical Services (FTS) under Section 9 of the Income Tax Act, 1961, and relevant Double Taxation Avoidance Agreements (DTAA). The ITAT had ruled in favor of the assessee, holding that the services were not FTS.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the Tribunal's order was perverse in holding that services rendered by the assessee were not in the nature of FTS, thereby not applying Section 9 of the Act and the DTAA, by relying on the case of M/s. Abbey Business Services India P. Ltd. which the revenue argued was distinguishable, and by not considering the case of M/s. Centrica India Offshore P. Ltd. relied upon by the revenue? 2. Whether the Tribunal's order was perverse in holding that the nature of services rendered could not be said to be FTS, ignoring that the conditions set out in Explanation 2 to Section 9(1)(vii) of the Act and the DTAA were fully satisfied? 3. Whether the Tribunal's order was perverse in ignoring various clauses of the agreement which signified that the overseas entity, through its employees, rendered technical, managerial, and consultancy services, thus satisfying the definition of FTS as per the Act and DTAA? Contentions of the Revenue: The Revenue contended that the services rendered by the assessee were in the nature of technical services and did not fall within the employer-employee relationship. They referred to clauses in the agreements extracted in the Commissioner of Income Tax (Appeals) order.

Which sections of the Income-tax Act were involved?

Section 9(1)(vii),Section 260-A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3RD DAY OF SEPTEMBER, 2025 PRESENT THE HON'BLE MR. JUSTICE S.G.PANDIT AND THE HON'BLE MR. JUSTICE K. V. ARAVIND

INCOME TAX APPEAL No. 121 OF 2024 C/W INCOME TAX APPEAL No. 124 OF 2024 INCOME TAX APPEAL No. 125 OF 2024 INCOME TAX APPEAL No. 126 OF 2024

IN ITA No. 121/2024

BETWEEN:

1.

PRINCIPAL COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION), KORAMANGALA, BANGALORE.

2.

THE DEPUTY COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION , CIRCLE 1(1), KORAMANGALA, BANGALORE. …APPELLANTS AND:

1.

M/S GOLDMAN SACHS SERVICES PVT. LTD., WING A, WING B AND GROUND FLOOR TO

Digitally signed by VALLI MARIMUTHU Location: HIGH COURT OF KARNATAKA 6TH FLOOR OF WING C, HELIOS BUSINESS PARK, 150 OUTER RING KADUBEESANAHALLI, BANGALORE -560103. PAN: AACCG2435N, REPRESENTED BY ITS DIRECTOR …RESPONDENT

THIS ITA / INCOME TAX APPEAL FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 29.04.2022 PASSED IN IT(IT)A No.366/BANG/2020 FOR THE ASSESSMENT YEAR 2015-16 PRAYING TO DECIDE THE FOREGOING QUESTION OF LAW AND/OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HON'BLE COURT AS DEEMED FIT AND SET ASIDE THE APPELLATE ORDER DATED 29.04.2022 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, BANGALORE, AS SOUGHT FOR, IN THE RESPONDENT-ASSESSEES CASE, IN APPEAL PROCEEDINGS IN IT(IT)A No.366/BANG/2020 FOR A.Y 2015-16 (ANNEXURE-A).

IN ITA No. 124/2024

BETWEEN:

1.

PRINCIPAL COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION), KORAMANGALA, BANGALORE.

2.

THE DEPUTY COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION , CIRCLE 1(1), KORAMANGALA, BANGALORE. …APPELLANTS AND:

1.

M/S GOLDMAN SACHS SERVICES PVT. LTD., WING A, WING B AND GROUND FLOOR TO 6TH FLOOR OF WING C, HELIOS BUSINESS PARK, 150 OUTER RING KADUBEESANAHALLI, BANGALORE -560103. PAN: AACCG2435N, REPRESENTED BY ITS DIRECTOR …RESPONDENT

THIS ITA / INCOME TAX APPEAL FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 29.04.2022 PASSED IN IT(IT)A No.369/BANG/2020 FOR THE ASSESSMENT YEAR 2018-19 PRAYING TO DECIDE THE FOREGOING QUESTION OF LAW AND/OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HON'BLE COURT AS DEEMED FIT AND SET ASIDE THE APPELLATE ORDER DATED 29.04.2022 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, BANGALORE, AS SOUGHT FOR, IN THE RESPONDENT-ASSESSEES CASE, IN APPEAL PROCEEDINGS IN IT(IT)A No.369/BANG/2020 FOR A.Y 2018-19 (ANNEXURE-A).

IN ITA No. 125/2024

BETWEEN:

1.

PRINCIPAL COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION), KORAMANGALA, BANGALORE.

2.

THE DEPUTY COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION , CIRCLE 1(1), KORAMANGALA, BANGALORE. …APPELLANTS AND:

1.

M/S GOLDMAN SACHS SERVICES PVT. LTD., WING A, WING B AND GROUND FLOOR TO 6TH FLOOR OF WING C, HELIOS BUSINESS PARK, 150 OUTER RING KADUBEESANAHALLI, BANGALORE -560103. PAN: AACCG2435N, REPRESENTED BY ITS DIRECTOR …RESPONDENT

THIS ITA / INCOME TAX APPEAL FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 29.04.2022 PASSED IN IT(IT)A No.365/BANG/2020 FOR THE ASSESSMENT YEAR 2014-15 PRAYING TO DECIDE THE FOREGOING QUESTION OF LAW AND/OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HON'BLE COURT AS DEEMED FIT AND SET ASIDE THE APPELLATE ORDER DATED 29.04.2022 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, BANGALORE, AS SOUGHT FOR, IN THE RESPONDENT-ASSESSEES CASE, IN APPEAL PROCEEDINGS IN IT(IT)A No.365/BANG/2020 FOR A.Y 2014-15 (ANNEXURE-A).

IN ITA No. 126/2024

BETWEEN:

1.

PRINCIPAL COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION), KORAMANGALA, BANGALORE.

2.

THE DEPUTY COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION , CIRCLE 1(1), KORAMANGALA, BANGALORE. …APPELLANTS AND:

1.

M/S GOLDMAN SACHS SERVICES PVT. LTD., WING A, WING B AND GROUND FLOOR TO 6TH FLOOR OF WING C, HELIOS BUSINESS PARK, 150 OUTER RING KADUBEESANAHALLI, BANGALORE -560103. PAN: AACCG2435N, REPRESENTED BY ITS DIRECTOR …RESPONDENT

THIS ITA / INCOME TAX APPEAL FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 29.04.2022 PASSED IN IT(IT)A No.367/BANG/2020 FOR THE ASSESSMENT YEAR 2016-17 PRAYING TO DECIDE THE FOREGOING QUESTION OF LAW AND/OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HON'BLE COURT AS DEEMED FIT AND SET ASIDE THE APPELLATE ORDER DATED 29.04.2022 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, BANGALORE, AS SOUGHT FOR, IN THE RESPONDENT-ASSESSEES CASE, IN APPEAL PROCEEDINGS IN IT(IT)A No.367/BANG/2020 FOR A.Y 2016-17 (ANNEXURE-A).

THESE APPEALS COMING ON FOR ORDERS THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE S.G.PANDIT and HON'BLE MR. JUSTICE K. V. ARAVIND ORAL JUDGMENT

(PER: HON'BLE MR. JUSTICE S.G.PANDIT)

The four batch of appeals are filed raising the following common substantial questions of law: "1. "Whether on the facts and in the circumstances of the case, the Tribunal's order is perverse in nature in by holding that services rendered by assessee are not in nature of FTS and as such Section 9 of the Act read with provisions of DTAA of respective countries are not applicable by relying upon case of M/s.Abbey Business services India P.Ltd which is distinguishable from the facts of this case and not considering the case of M/s.Centrica India Offshore P.Ltd on identical issue relied upon by Revenue"?

2.

"Whether on the facts and in the circumstances of the case, the Tribunal's order is perverse in nature in holding nature of services rendered cannot be said as Fee for Technical Services ignoring that the conditions set out definition clause of in Explanation 2 to Section 9(1)(vii) of the Act and the Double Taxation Avoidance Agreement as well are fully satisfied in present case "?

3.

'Whether on the facts and in the circumstances of the case, the Tribunal's order is perverse in nature in ignoring the various clauses of the Agreement which signified that the overseas entity through the employees rendered technical, managerial and consultancy services, thus satisfying FTS as per the provisions of the Act and also under DTAA"?"

2.

Sri.E.I.Sanmathi, learned Senior Standing Counsel appearing for the appellants-Revenue would contend that the services rendered by the assessee are in the nature of technical services and it would not fall within the employer and employee relationship. Further, learned counsel would refer to page 68 of the paper book, wherein, clauses of the agreements are extracted in the order of the Commissioner of Income Tax, (Appeals) dated 19.02.2020.

3.

On hearing learned counsel for the appellants- Revenue, we are of the considered view that the questions raised by the appellants-revenue are answered by the Coordinate Benches of this Court in the case of Director of Income Tax (International Taxation) vs. Abbey Business Services India (P) Ltd., [(2020) 122 taxmann.com 174] and in the case of Deputy Commissioner of Income Tax (International Taxation) and others vs. M/s. Flipkart Internet Pvt. Ltd., [(2025) SCC OnLine Kar 16629]. The Coordinate Benches after considering the clauses and the contentions raised by the appellants-Revenue has held that, such technical services provided by the assessee are in the nature of reimbursement which falls within the employer and employee relationship. Thus, we are of the considered opinion that the substantial questions of law raised in these appeals would no more survive for consideration.

4.

Accordingly, by following the above two decisions of the Coordinate Benches, the above appeals stand dismissed.

Sd/- (S.G.PANDIT) JUDGE

Sd/- (K. V. ARAVIND) JUDGE

DDU List No.: 1 Sl No.: 6

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