DCIT Vs Orange & Anr. (Supreme Court of India)
The Supreme Court dismissed the Special Leave Petition filed against the Karnataka High Court judgment concerning the taxability of interconnect service charges, thereby declining to interfere under Article 136 of the Constitution. The High Court had examined whether payments made for interconnect services to non-resident telecom operators constitute “royalty.” Relying on a prior Co-ordinate Bench decision dated 14.07.2023, the High Court held that such charges do not qualify as royalty. The earlier judgment had noted that payments for interconnect services and transfer of telecom capacity in foreign jurisdictions were not chargeable to tax as royalty, and that the Income Tax Appellate Tribunal had also taken a consistent view that no tax was deductible on such payments to non-resident telecom operators. This position was not disputed by the Revenue. The High Court found no infirmity in the order under challenge and dismissed the appeal. The Supreme Court, by refusing to interfere, effectively affirmed the High Court’s ruling that interconnect service charges are not taxable as royalty.
Read HC Judgment in this case: Interconnect Charges Not Royalty Due to Binding Precedent, Karnataka HC Dismisses Appeal
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1. Delay condoned.
