LINKEDIN TECHNOLOGY INFORMATION PRIVATE LIMITED,DELHI vs. PRINCIPAL COMMISSIONER OF INCOME-TAX, DELHI -4 , DELHI

ITA 2492/DEL/2024Status: DisposedITAT Delhi09 January 2026AY 2018-19Bench: SHRI VIKAS AWASTHY (Judicial Member), SHRI NAVEEN CHANDRA (Accountant Member)1 pages
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What did the Tribunal hold?

The Tribunal held that Section 40(a)(i) of the Income Tax Act, as it stood, was discriminatory when compared to provisions for residents, violating Article 26(3) of the India-USA tax treaty. Therefore, the PCIT's assumption of jurisdiction under Section 263 was invalid as the AO's order was neither erroneous nor prejudicial to revenue.

What were the facts?

The assessee company made foreign remittances for marketing and R&D services. The Assessing Officer (AO) reopened the assessment and made a disallowance of 30% of these remittances for non-deduction of TDS. The Principal Commissioner (PCIT) invoked revisionary powers under Section 263, holding that the disallowance should have been 100% and the AO's order was erroneous and prejudicial to revenue.

What were the issues?

Whether the PCIT correctly invoked Section 263 powers when the AO's order was not erroneous or prejudicial to revenue, considering the discriminatory nature of Section 40(a)(i) vis-à-vis the India-USA tax treaty.

Which sections of the Income-tax Act were involved?

Section 263,Section 147,Section 143(3),Section 40(a)(i),Section 40(a)(ia),Section 195

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Income Tax Appellate Tribunal, DELHI ‘D’ BENCH,

Before: SHRI VIKAS AWASTHY & SHRI NAVEEN CHANDRA

For Appellant: Shri Sriram Seshadri, CA, Ms. Riddhi Maru, CA
For Respondent: Shri Nethrapal, CIT-DR
Hearing: 15.10.2025Pronounced: 09.01.2026

PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:

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This appeal by the assessee is preferred against the order of the PCIT, Delhi – 4, dated 29.03.2024 pertaining to A.Y 2018-19. ITA No. 2492/DEL/2024 [A.Y 2018-19]

2.

The grounds of the assessee are:

Ground No. 1 - Order passed under section 263 of the Act is bad in law and liable to be quashed. On the facts and in the circumstances of the case and in law, the Order passed by the Learned Principal Commissioner of Income-tax ('Ld. Pr. CIT") under section 263 of the Act is bad in law, void ab initio, without juri iction and hence, liable to be quashed. The appellant s

The order continues below.

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