Higher tax rate for foreign companies not declaring & paying dividends in India is legal

Shinhan Bank Vs Deputy Director of Income Tax (International Taxation) (ITAT Mumbai) S.90 : Double taxation relief-Foreign Company-discrimination allowed-Company has not made prescribed arrangement-DTAA-India -Korea. [S. 2(22A), Art. 25(1)] We find that, by Finance Act 2001, an Explanation (now known as Explanation 1) was inserted below Section 90, and it was with retrospective effect i.e. effective 1st April 1962. This Explanation states that “For the removal of doubts, it is hereby declared that the charge of tax in respect of a foreign company at a rate higher than the rate at which a dom...