Financial And Risk Organisation Limited Vs ITO (Delhi High Court)
The petitioner filed a writ petition under Article 226 challenging the order dated 23.06.2025 (passed on 21.08.2025) and the consequential certificate dated 21.08.2025 issued under Section 197 of the Income Tax Act, 1961, whereby a tax withholding certificate at the rate of 15% was granted instead of the ‘NIL’ rate sought.
The petitioner, a United Kingdom incorporated company and tax resident of the UK for AY 2026–27, provides subscription-based information and software products, including access to financial and regulatory data, market data, reports, news, and FXall electronic trading platform services. It entered into a non-exclusive distribution agreement on a principal-to-principal basis with Refinitiv India Private Limited (RIPL) and Refinitiv India Transaction Services Private Limited (RITSPL), which purchase and distribute its products in India. Payments received were to be considered under the Income Tax Act and the India-UK DTAA.
Claiming that no income chargeable to tax arose in India, the petitioner applied under Section 197 for a NIL withholding certificate for AY 2026–27. However, the competent authority issued a certificate at 15%.
The petitioner argued that its services were not taxable under the Act or the India-UK Treaty and relied on a Tribunal order dated 21.12.2020 in the case of its erstwhile group entity, wherein distribution fees were held not to constitute royalty. It contended that the authority wrongly relied on an assessment order for AY 1999–2000 that had already been set aside by the Tribunal, and that the impugned finding treating the transactions as royalty was based on conjectures and surmises.
