Section 194I of the Income Tax Act

The Supreme Court holds that for a service to qualify as 'fees for technical services' under Section 9(1)(vii) of the Income-tax Act or Article 12 of a DTAA, direct human involvement or intervention in rendering the service is essential. This principle applies to telecommunication services like interconnect charges and roaming charges, and also to services related to software use.

The onus is on the revenue to establish the nexus between expenses incurred and exempt income before making a disallowance under section 14A.

A statutory provision is not construed to have retrospective operation unless such a construction is explicitly stated in the Act or arises by necessary and distinct implication.

An order under section 201(1) of the Income Tax Act for Assessment Year 2009-10 can be passed when the TDS statement is required to be filed.

A one-time payment of lease rent, even if commuted and discounted over a long period like 90 years, is revenue in nature and therefore an allowable business expenditure. The Assessing Officer must record satisfaction before applying Rule 8D for disallowance under Section 14A.

An assessee is not liable for TDS default under section 201(1) on payments to NOIDA Authority for lease rents, but the interest liability under section 201(1A) may still apply if the deductee has offered such income. However, the conclusion regarding TDS default applies prospectively.

Interest under section 201(1A) cannot be levied if the recipient of income has already paid the due taxes. The onus is on the revenue to prove that taxes have not been recovered from the primary liable person.

Interest earned on funds parked in fixed deposits is considered business income if it's intrinsically linked to the assessee's business activities.

Interest on staff loans earned by an electricity company is business income, not income from other sources.