ITO IT 1.2.2, MUMBAI vs. BENNETT COLEMAN & CO LTD, MUMBAI

ITA 5250/MUM/2025Status: DisposedITAT Mumbai14 January 2026AY 2018-1918 pages
AI SummaryN/A

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s findings that transponder service fees paid to Intelsat UK are not taxable in India as 'Royalty' under the India-UK DTAA. It reiterated that the amendment to Section 9(1)(vi) of the Income Tax Act, 1961, through Explanation-6 (Finance Act, 2012), which expanded the definition of 'process' to include non-secret processes, does not unilaterally override the definition of 'Royalty' in Article 13 of the India-UK DTAA, which requires a 'secret process.' As Intelsat UK does not have a Permanent Establishment in India, the payments are not taxable in India.

What were the facts?

The assessee, an Indian media company, made payments to Intelsat Global Sales and Marketing Limited (Intelsat UK) for transponder services for broadcasting television channels in India. The assessee withheld tax out of caution but contended that the transponder service fees were not chargeable to tax in India as 'Royalty' or 'Fees for Technical Services' under the Income Tax Act or the India-UK DTAA. The CIT(A) had previously ruled in favor of the assessee, a decision that was remitted for de novo adjudication.

What were the issues?

Whether transponder service fees paid by the assessee to Intelsat UK are taxable as 'Royalty' under Section 9(1)(vi) of the Income Tax Act, 1961 (especially considering Explanation-6) or under the India-UK Double Taxation Avoidance Agreement, thereby requiring tax deduction at source.

Which sections of the Income-tax Act were involved?

Section 195,Section 248,Section 254,Section 9(1)(vi),Section 90(2)

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PER BENCH: The Revenue has filed the present appeals against the separate impugned orders of even date 27/06/2025, passed under section 248 read with section 254 of the Income Tax Act, 1961 (“the Act”), by the learned Commissioner of Income Tax (Appeals) – 55, Mumbai [“learned CIT(A)”], for the assessment years 2018-19 and 2019-20. 2. Since the issue raised in all these appeals by the Revenue is similar, arising out of a similar factual matrix, these appeals were heard together as a matter of convenience and are being decided by way of this consolidated order.

3.

As the Revenue has raised similar grounds in all these appeals, the grounds raised by the Revenue in ITA No.5246/Mum/2025 are reproduced as follows for ready reference:

"1. "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in upholding that the assessee was not liable to deduct tax at source w/s 195 of the Act on payments made to intelsat UK, for transponder charges on the ground that the payment did not constitute royalty u/s. 9(1) (vi) of the Act or under the India-UK DTAA?"

2.

"Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in in not taking

The order continues below.

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