MJVS Fashions Private Limited Vs ITO (ITAT Mumbai)
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) allowed the assessee’s appeal for statistical purposes and restored the matter to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh adjudication on merits in relation to the assessment year 2021-22.
The assessee had challenged the order passed by the CIT(A) under section 250 of the Income Tax Act, 1961. The dispute related to payments made to Facebook Netherlands Ltd. without deduction of tax at source (TDS). The assessee contended that Facebook did not have a Permanent Establishment (PE) in India and that the Double Taxation Avoidance Agreement (DTAA) with the Netherlands applied. According to the assessee, the income had arisen in the Netherlands and deducting TDS would amount to double taxation. The assessee further argued that the payments were digitally debited without human intervention and that TDS could not be recovered in such circumstances.
The Tribunal observed that the CIT(A) had passed the impugned order ex parte because there was no appearance on behalf of the assessee during the appellate proceedings. Before the Tribunal, however, the assessee was represented by authorised counsel and expressed its intention to pursue the appeal against the addition made by the Assessing Officer (AO).
