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“service PE”

International TaxDTAA Article 5DTAA Article 5225 judgments

The decision most relied on for service PE is DIT v. Morgan Stanley & Co. (292 ITR 416), cited in 360 judgments on BharatTax.

Leading authorities on service PE

DIT v. Morgan Stanley & Co.
292 ITR 416 · 2007 · Supreme Court
360
citing judgments

A Permanent Establishment (PE) signifies a foreign enterprise's virtual projection into another country, with a fixed place PE existing where an MNE's business is wholly or partly carried on. A dependent agent PE requires the agent to act as such and/or have the authority to conclude contracts for the foreign enterprise under DTAA provisions.

DIT v. Nokia Networks OY
358 ITR 259 · 2013 · High Court
276
citing judgments

Payments for the supply of software along with telecom equipment are not in the nature of royalty if they are for the use of a copyrighted article, not the copyright itself. Such payments are not taxable in India in the absence of a Permanent Establishment (PE).

National Petroleum Construction Company v. DIT
383 ITR 648 · 2016 · High Court
69
citing judgments

An Indian agent providing marketing services, without the authority to conclude contracts on behalf of a foreign company, does not constitute a Dependent Agent Permanent Establishment (DAPE) for the foreign company in India under DTAA provisions.

DIT v. E-Funds IT Solution
364 ITR 256 · 2014 · High Court
61
citing judgments

A subsidiary is an independent legal entity, and the mere relationship of holding-subsidiary or control by itself does not result in a Permanent Establishment (PE) for the foreign company in India, whether it be a fixed place PE or a dependent agent PE, even when the subsidiary provides outsourced services.

CIT(A) v. Eon Technology Pvt. Ltd.
343 ITR 366 · 2012 · High Court
58
citing judgments

Payments to a non-resident agent for services rendered outside India, where the agent has no permanent establishment (PE) or business connection in India, are not chargeable to tax in India. Consequently, there is no obligation to deduct tax at source under Section 195, and no disallowance under Section 40(a)(i) can be made.

Delmas France v. Asstt. DIT (IT)
17 Taxmann.com 91 · 2012 · ITAT
49
citing judgments

The ITAT evaluates the profit neutrality theory for a Dependent Agent Permanent Establishment (DAPE), stating that unlike a service PE, a DAPE assumes entrepreneurship risk which must be considered for arm's length remuneration.

DIT v. HCL Infosystems Ltd.
144 Taxmann 492 · 2005 · High Court
45
citing judgments

Reimbursement of salary costs of employees is not taxable as Fees for Technical Services (FTS) under the Act. Additionally, for a fixed place Permanent Establishment (PE) or place of management to exist, business premises must be made available or a right to use them must be established.

Galileo International Inc. v. DCIT
116 ITD 1 · 2009 · ITAT
41
citing judgments

Income is chargeable to tax in India only to the extent it is reasonably attributable to operations carried out in India, especially when the amounts paid to associated enterprises are at arm's length.

Judgments citing service PE

Ncr Global Solutions Limited, Ireland vs. DCIT, Circle 2(2)(2) Int. Taxation, New Delhi

In the result, the appeal of the assessee is allowed

ITA 381/DEL/2023[2020-21]Status: DisposedITAT Delhi06 Oct 2026AY 2020-21

Bench: Shri Saktijit Dey, Hon’Ble & Dr. B. R. R. Kumar

For Appellant: Sh. Nageshwar Rao, AdvFor Respondent: Sh. Vizay B.Vasanta, CIT-DR

Stanely & Co. (supra) has held as under:- 33. “To conclude, we hold that the AAR was right in ruling that MSAS would be a Service PE in India under Article 5(2)(l), though only on account of the services to be performed by the 6 NCR Global Solutions

Bajaj Auto Limited, Mumbai vs. The Principal Commissioner of Income-Tax - 3, Mumbai

ITA 2666/MUM/2025[2019-20]Status: DisposedITAT Mumbai23 Jan 2026AY 2019-20

Bench: Shri Om Prakash Kant () & Shri Narender Kumar Choudhry ()

For Appellant: Mr. P.J. Pardiwala a/wFor Respondent: Mr. Satyaprakash R. Singh, CIT-DR
Section 143(3)Section 144C(3)Section 145(2)Section 263Section 37(1)Section 40

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “B” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI NARENDER

Saic Motor Corporation Ltd, China vs. DCIT, International Tax, Gurgaon

In the result, the appeal of the assessee is partly allowed

ITA 1191/DEL/2025[2022-23]Status: DisposedITAT Delhi07 Jan 2026AY 2022-23

Bench: Shri Vimal Kumar & Shri Brajesh Kumar Singh[Assessment Year: 2022-23] Saic Motor Corporation Assistant Commissioner Of Income Limited, Tax, International Taxation, Gurgaon, Room No.509, Building No.1, Vs Hsiidc Building, Vanijya Nikunj, Tower No.563, Songtao Road, Udyog Vihar, Phase-V, Gurgaon, Pilot Free Trade Zone, Sanghai, Haryana-122001 China, Pan-Abfcs0870H Assessee Revenue Assessee By Shri Ajay Vohra, Sr. Adv. Shri Kunal Pandey, Adv. Revenue By Shri Rohit Garg, Cit-Dr Date Of Hearing 10.10.2025 Date Of Pronouncement 07.01.2026 Order

Section 142(1)Section 143(2)Section 143(3)Section 144CSection 153(1)

employees performed supervisory activities in connection with manufacturing and assembling process of MG Cars by India AE, thereby holding that the assessee had a service PE as per India China DTAA. The Ld. DRP further noted that AO had also made reference to the findings of the Investigating Wing subsequent ... India- Image of the brands, China DTAA which deals with supervisory PE assessee has to control (erroneously concluded as Service PE) in the draft and supervise the order. quality of product. (ii) Assessee has not submitted any response stating that Therefore, since the assessee is engaged in supervisory activities

ITO, Ward-1(2), Siliguri vs. Binoy Agarwal, Siliguri

In the result, the appeal of the Revenue is dismissed

ITA 1584/KOL/2024[2021-22]Status: DisposedITAT Kolkata02 Jan 2026AY 2021-22

Bench: Shri Rajesh Kumar, Am & Shri Pradip Kumar Choubey, Jm

For Appellant: Shri Siddharth Agarwal, ARFor Respondent: Shri Pankaj Pandey, DR
Section 143(2)

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM

Oracle Systems Corporation, New Delhi vs. DDIT, New Delhi

In the result, assessee’s appeals in :

ITA 3313/DEL/2013[2005-06]Status: DisposedITAT Delhi02 Jan 2026AY 2005-06

Bench: Shri Vikas Awasthy & Shri Naveen Chandra

For Appellant: Shri G.C. Srivastava, AdvFor Respondent: Shri Indruj Sngh Rai, Spl. Counsel
Section 234ASection 250(1)(a)Section 9(1)(vi)

Fixed Place PE (under Article 5(1) of the DTAA) allegedly through which the business of the assessee is partly carried out. (b) Service PE (under Article 5(2)(ii) of the DTAA) for allegedly rendering supervisory services. (c) Agency PE (under Article 5(4) read with Article ... business of the subsidiary will be regarded as business of the principal. 14. The ld AR further submitted that there is no Service PE under Article 5(2)(l) as no Services has been furnished by the assessee in India. It is the say of the ld AR that

Oracle Systems Corporation, New Delhi vs. ADIT, New Delhi

In the result, assessee’s appeals in :

ITA 1836/DEL/2009[2004-05]Status: DisposedITAT Delhi02 Jan 2026AY 2004-05

Bench: Shri Vikas Awasthy & Shri Naveen Chandra

For Appellant: Shri G.C. Srivastava, AdvFor Respondent: Shri Indruj Sngh Rai, Spl. Counsel
Section 234ASection 250(1)(a)Section 9(1)(vi)

Fixed Place PE (under Article 5(1) of the DTAA) allegedly through which the business of the assessee is partly carried out. (b) Service PE (under Article 5(2)(ii) of the DTAA) for allegedly rendering supervisory services. (c) Agency PE (under Article 5(4) read with Article ... business of the subsidiary will be regarded as business of the principal. 14. The ld AR further submitted that there is no Service PE under Article 5(2)(l) as no Services has been furnished by the assessee in India. It is the say of the ld AR that

Oracle Systems Corporation, New Delhi vs. ADIT, New Delhi

In the result, assessee’s appeals in :

ITA 1835/DEL/2009[2003-04]Status: DisposedITAT Delhi02 Jan 2026AY 2003-04

Bench: Shri Vikas Awasthy & Shri Naveen Chandra

For Appellant: Shri G.C. Srivastava, AdvFor Respondent: Shri Indruj Sngh Rai, Spl. Counsel
Section 234ASection 250(1)(a)Section 9(1)(vi)

Fixed Place PE (under Article 5(1) of the DTAA) allegedly through which the business of the assessee is partly carried out. (b) Service PE (under Article 5(2)(ii) of the DTAA) for allegedly rendering supervisory services. (c) Agency PE (under Article 5(4) read with Article ... business of the subsidiary will be regarded as business of the principal. 14. The ld AR further submitted that there is no Service PE under Article 5(2)(l) as no Services has been furnished by the assessee in India. It is the say of the ld AR that

Oracle Systems Corporation, New Delhi vs. ADIT, New Delhi

In the result, assessee’s appeals in :

ITA 1834/DEL/2009[2002-03]Status: DisposedITAT Delhi02 Jan 2026AY 2002-03

Bench: Shri Vikas Awasthy & Shri Naveen Chandra

For Appellant: Shri G.C. Srivastava, AdvFor Respondent: Shri Indruj Sngh Rai, Spl. Counsel
Section 234ASection 250(1)(a)Section 9(1)(vi)

Fixed Place PE (under Article 5(1) of the DTAA) allegedly through which the business of the assessee is partly carried out. (b) Service PE (under Article 5(2)(ii) of the DTAA) for allegedly rendering supervisory services. (c) Agency PE (under Article 5(4) read with Article ... business of the subsidiary will be regarded as business of the principal. 14. The ld AR further submitted that there is no Service PE under Article 5(2)(l) as no Services has been furnished by the assessee in India. It is the say of the ld AR that

Oracle Systems Corporation, New Delhi vs. ADIT, New Delhi

In the result, assessee’s appeals in :

ITA 1833/DEL/2009[2001-02]Status: DisposedITAT Delhi02 Jan 2026AY 2001-02

Bench: Shri Vikas Awasthy & Shri Naveen Chandra

For Appellant: Shri G.C. Srivastava, AdvFor Respondent: Shri Indruj Sngh Rai, Spl. Counsel
Section 234ASection 250(1)(a)Section 9(1)(vi)

Fixed Place PE (under Article 5(1) of the DTAA) allegedly through which the business of the assessee is partly carried out. (b) Service PE (under Article 5(2)(ii) of the DTAA) for allegedly rendering supervisory services. (c) Agency PE (under Article 5(4) read with Article ... business of the subsidiary will be regarded as business of the principal. 14. The ld AR further submitted that there is no Service PE under Article 5(2)(l) as no Services has been furnished by the assessee in India. It is the say of the ld AR that

Lm Wind Power As, Denmark vs. Assistant Commissioner of Income Tax, Circle International Tax 2(2)(1), Delhi

In the result, ground raised by the assessee is allowed

ITA 4280/DEL/2024[2020-21]Status: DisposedITAT Delhi21 Nov 2025AY 2020-21

Bench: Shris.Rifaur Rahman & Shri Yogesh Kumar U.S.Lm Wind Power As, Vs, Acit, Circle Juptervej 6, 6000 Kolding, International Tax 2(2)(1), Denmark – 999999. Delhi (Pan :Aabcl8590Q) (Appellant) (Respondent) Assessee By : Shri Ajay Vohra, Sr. Advocate Shri Aditya Vohra, Advocate Shri Arpitgoyal, Ca Revenue By : Shri Saroj Kumar Dubey, Cit Dr Date Of Hearing : 27.08.2025 Date Of Order : 21.11.2025 Order Per S. Rifaur Rahman: 1. This Appealpreferred By The Assessee Is Directed Against The Assessment Order Dated 27.01.2025 Passed By The Acit, Circle Int. Tax 2(2)(1), Delhi Under Section 143(3) R.W.S. 144C(13) Of The Income-Tax Act, 1961 (For Short ‘The Act”) For Assessment Year 2020-21 Pursuant To The Directions Of The Dispute Resolution Panel U/S 144C(5) Of The Act Raising Following Grounds Of Appeal :- “1. That On The Facts & Circumstances Of The Case & In Law, The Assessment Order Dated 29.07.2024 Passed Under Section 143(3) Read With Section 144C(13) Of The Income-Tax Act, 1961 (He Act") For Assessment Year 2020-21 Assessing The Total Income Of The Assessee At Rs.81,14, 14,893 Is Bad In Law, Void- Ab-Initio & Therefore, Liable To Be Quashed And/ Or Set Aside.

For Appellant: Shri Ajay Vohra, Sr. AdvocateFor Respondent: Shri Saroj Kumar Dubey, CIT DR
Section 143(3)Section 144C(13)Section 144C(5)Section 271ASection 44DSection 5Section 92C

existed in India. It has not been specified as to which form of PE existed in India – whether Fixed Place or Dependent Agent or Service PE? He submitted that be that as it may, that the findings of the assessing officer regarding existence of PE of the assessee in India ... India, merely observing certain clause of global agreement. There is no record brought on record with regard to fixed place of business or service PE or any employee of the assessee company had visited in India to execute any of the contracts or utilize the place of business in India

Swiss Re Asia Pte Ltd, Singapore vs. Deputy Commissioner of Income Tax, (International Taxation) Circle - 4(2)(2), Mumbai

In the result, we hold that the assessee does not have any permanent establishment in India, whether as fixed place

ITA 4092/MUM/2023[2021-22]Status: DisposedITAT Mumbai20 Nov 2025AY 2021-22

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 144CSection 9(1)(i)

section 9(1) of the Act. The assessee does not have any PE in India. The facts on record show that there is neither Service PE nor Agency PE in the form of SRSIPL Considering the facts in totality in the light of the relevant provisions ... Likewise, there is no service permanent establishment of the assessee in India. Article 5 of the India Singapore treaty contemplates a service PE where an enterprise furnishes services in India through its employees or other personnel for a stipulated duration. The assessee does not furnish any services in India

Swiss Re Asia Pte Ltd, Singapore vs. Deputy Commissioner of Income Tax, (International Taxation) Circle - 4(2)(2), Mumbai

In the result, we hold that the assessee does not have

ITA 3178/MUM/2023[2020-21]Status: DisposedITAT Mumbai20 Nov 2025AY 2020-21
Section 144CSection 9(1)(i)

section 9(1) of the Act. The assessee does not have any PE in India. The facts on record show that there is neither Service PE nor Agency PE in the form of SRSIPL Considering the facts in totality in the light of the relevant provisions ... different view. 32. Likewise, there is no service permanent establishment of the assessee in India. Article 5 of the India Singapore treaty contemplates a service PE where an enterprise furnishes services in India through its employees or other personnel for a stipulated duration. The assessee does not furnish any services

Wts Energy Dmcc, Dubai vs. Assistant Commissioner of Income Tax, Delhi

In the result, assessment order is quashed, and appeal of the assessee is allowed

ITA 1891/DEL/2025[AY 2022-23]Status: DisposedITAT Delhi04 Nov 2025

Bench: SHRI VIKAS AWASTHY (Judicial Member), SHRI BRAJESH KUMAR SINGH (Accountant Member)

For Appellant: S/Shri Sachit Jolly, Sr. Advocate along with Sohum Dua, Abhyudaya Shankar BajpaiFor Respondent: Shri M.S Nethrapal, CIT-DR
Section 143(3)Section 144C(13)Section 144C(5)Section 153Section 234ASection 270A

contra, Shri M.S Nethrapal representing the department vehemently supporting the impugned assessment order submits that the assessee is having service PE in India. The assessee is not only supplying manpower but is also maintaining and supervising activities carried out by the manpower supplied by the assessee. The ld. DR referred

Gau Jeev Parmarth Sewa Sanstha, Alwar vs. ITO(E), Ward-1, Jaipur

In the result, appeal filed by the assessee is allowed

ITA 1203/JPR/2025[2022-23]Status: DisposedITAT Jaipur03 Nov 2025AY 2022-23

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri P.C. Parwal, FCAFor Respondent: Shri Gautam Singh Choudhary, Addl. CIT
Section 11Section 12ASection 2Section 250

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Mk0 ,l- lhrky{eh

Ncr Global Solutions Limited, Ireland vs. Deputy Commissioner of Income-Tax, Circle-2(2)(2), International Tax, New Delhi

In the result, both the appeals of the assessee are allowed as indicated above

ITA 1885/DEL/2025[2022-23]Status: DisposedITAT Delhi30 Oct 2025AY 2022-23

Bench: Shri Vikas Awasthy & Shri Brajesh Kumar Singh

Section 142(1)Section 143(2)Section 143(3)

form of business presence in India which constitute a Permanent Establishment (in the form of Fixed place PE, Agency PE, Installation PE, Construction PE, Service PE) in India in accordance with Article 5 of the India- Ireland Tax Treaty or a business connection in terms of Section. Further, the assessee

Juniper Networks Solution India Private Limited, New Delhi vs. Assessment Unit, NFAC Itd, New Delhi

In the result, ground no 3 raised by the assessee is allowed in its favour

ITA 4400/DEL/2024[2020-21]Status: DisposedITAT Delhi24 Oct 2025AY 2020-21

Bench: Shri S. Rifaur Rahman & Shri Yogesh Kumar U.S.Juniper Networks Solution India Pvt. Ltd., Vs. Assessment Unit, Unit No.Iia, 06Th Floor, Dlf Centre, Nfac Itd, Parliament Street, Connaught Place, New Delhi – 110 001. (Pan : Aaecj1345A) (Appellant) (Respondent) Assessee By : Shri Sachit Jolly, Sr. Advocate Shri Sandeep Bhalla, Advocate Shri Anurag Singhal, Ca Revenue By : Shri S.K. Jadhav, Cit Dr Date Of Hearing : 05.08.2025 Date Of Order : 24.10.2025 O R D E R Per S. Rifaur Rahman: 1. This Appeal Preferred By The Assessees Is Directed Against The Assessment Order Dated 27.07.2024 Passed By The Income Tax Department, Assessment Unit U/S 143(3) Read With Section 144C(13)/144B Of The Income-Tax Act, 1961 (For Short ‘The Act”) For Assessment Year 2020-21 Pursuant To The Directions Of The Dispute Resolution Panel U/S 144C(5) Of The Act.

For Appellant: Shri Sachit Jolly, Sr. AdvocateFor Respondent: Shri S.K. Jadhav, CIT DR
Section 115JSection 142(1)Section 143(2)Section 143(3)Section 144C(13)Section 144C(5)Section 92C

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘H’: NEW DELHI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER and SHRI

Maruti Suzuki India Ltd., New Delhi vs. DCIT, New Delhi

In the result, all the three appeals of the assessee are allowed as indicated above and the appeal of Revenue is partly allowed

ITA 901/DEL/2017[2012-13]Status: DisposedITAT Delhi08 Oct 2025AY 2012-13

Bench: Shris.Rifaur Rahman & Shri Vimal Kumar

For Appellant: Shri Ajay Vohra, Sr. AdvocateFor Respondent: Shri G.C. Srivastava, Spl. Counsel for the Department
Section 143(3)Section 144CSection 144C(1)Section 144C(5)Section 14ASection 32Section 35Section 43B

decisions in the interest of SMC. 10.6 That the assessing officer erred on facts and in law in alleging that the assessee also had service PE in India alleging that the nominee directors were rendering managerial services on behalf of SMC to the appellant. 10.7 Without prejudice, the assessing officer ... erred on facts and in law in not appreciating that there is no concept of service PE under the Treaty 10.8 Without prejudice, the assessing officer erred on facts and in law in computing the profits attributable to the alleged PE of SMC in India at Rs.238

Maruti Suzuki India Ltd., New Delhi vs. DCIT, Circle- 16(1), New Delhi

In the result, all the three appeals of the assessee are allowed as indicated above and

ITA 6949/DEL/2017[2013-14]Status: DisposedITAT Delhi08 Oct 2025AY 2013-14

Bench: Shris.Rifaur Rahman & Shri Vimal Kumar

For Appellant: Shri Ajay Vohra, Sr. AdvocateFor Respondent: Shri G.C. Srivastava, Spl. Counsel for the Department
Section 143(3)Section 144CSection 144C(1)Section 144C(5)Section 14ASection 35Section 43B

decisions in the interest of SMC. 0.6 That the assessing officer erred on facts and in law in alleging that the assessee also had service PE in India alleging that the nominee directors were rendering managerial services on behalf of SMC to the appellant. 0.7 Without prejudice, the assessing officer ... erred on facts and in law in not appreciating that there is no concept of service PE under the Treaty 0.8 Without prejudice, the assessing officer erred on facts and in law in computing the profits attributable to the alleged PE of SMC in India at Rs.238

M/S Maruti Suzuki India Ltd., New Delhi vs. DCIT, New Delhi

In the result, all the three appeals of the assessee are allowed as indicated above and

ITA 287/DEL/2016[2011-12]Status: DisposedITAT Delhi08 Oct 2025AY 2011-12

Bench: Shris.Rifaur Rahman & Shri Vimal Kumar

For Appellant: Shri Ajay Vohra, Sr. AdvocateFor Respondent: Shri G.C. Srivastava, Spl. Counsel for the Department
Section 143(3)Section 144CSection 144C(1)Section 144C(5)Section 14ASection 35Section 43B

decisions in the interest of SMC. 0.6 That the assessing officer erred on facts and in law in alleging that the assessee also had service PE in India alleging that the nominee directors were rendering managerial services on behalf of SMC to the appellant. 0.7 Without prejudice, the assessing officer ... erred on facts and in law in not appreciating that there is no concept of service PE under the Treaty 0.8 Without prejudice, the assessing officer erred on facts and in law in computing the profits attributable to the alleged PE of SMC in India at Rs.238

DCIT, New Delhi vs. M/S. Maruti Suzuki India Ltd., New Delhi

In the result, all the three appeals of the assessee are allowed as indicated above and the appeal of Revenue is partly allowed

ITA 1024/DEL/2016[2011-12]Status: DisposedITAT Delhi08 Oct 2025AY 2011-12

Bench: Shris.Rifaur Rahman & Shri Vimal Kumar

For Appellant: Shri Ajay Vohra, Sr. AdvocateFor Respondent: Shri G.C. Srivastava, Spl. Counsel for the Department
Section 143(3)Section 144CSection 144C(1)Section 144C(5)Section 14ASection 32Section 35Section 43B

decisions in the interest of SMC. 10.6 That the assessing officer erred on facts and in law in alleging that the assessee also had service PE in India alleging that the nominee directors were rendering managerial services on behalf of SMC to the appellant. 10.7 Without prejudice, the assessing officer ... erred on facts and in law in not appreciating that there is no concept of service PE under the Treaty 10.8 Without prejudice, the assessing officer erred on facts and in law in computing the profits attributable to the alleged PE of SMC in India at Rs.238