DigiCert Inc Vs ACIT (ITAT Delhi)
ITAT Delhi order Whether the receipts from Indian resellers for digital certificate licences and related services constitute royalty or fees for technical services (FTS) under the IT Act, 1961 and the India–US DTAA
1. Background and Facts
The assessee, DigiCert Inc, a company incorporated and tax resident in the United States, is engaged globally in the business of issuing and managing digital security certificates (SSL/TLS) that authenticate and encrypt online communications.
During the relevant assessment year, the assessee received consideration from Indian resellers/distributors for supply of digital certificates and related limited support.
The Assessing Officer (AO) characterised these receipts as “Fees for Technical Services (FTS)” or “royalty” taxable in India under section 9(1)(vi)/(vii) of the Income-tax Act, 1961 and Article 12 of the India–US Double Taxation Avoidance Agreement (DTAA).
The assessee contended that the receipts represented business income from sale of standard digital certificates and restricted software licences, not involving any transfer of IP rights or “making available” of technical knowledge. As there was no PE in India, the income was not taxable under the DTAA.
2. Issues Before the Tribunal
Issue 1: Whether the receipts from Indian resellers for digital certificate licences and related services constitute royalty or fees for technical services (FTS) under the Income-tax Act, 1961 and the India–US DTAA.
