Synamedia Limited Vs CIT (ITAT Bangalore)
Relevant Facts
In Synamedia Ltd. v. CIT (International Taxation), the Bangalore ITAT examined the validity of a revisionary order u/s 263 for AY 2020–21. Synamedia Ltd., a company domiciled in the United Kingdom, had no permanent establishment or liaison office in India. It supplied open digital technology & services to digital pay-television operators & content providers, including integrated hardware systems containing embedded software.
The assessee filed its return declaring Nil income & claimed treaty protection u/s 90(2) under the India–UK DTAA. During scrutiny, the AO examined whether Indian receipts constituted royalty under domestic law or Article 12. The assessee furnished contractual provisions, customer agreements & Copyright Act submissions explaining that no copyright was transferred. Relying on Engineering Analysis Centre of Excellence Pvt. Ltd. v. CIT, the AO completed assessment u/s 143(3) on 6 June 2022 at returned income.
The CIT subsequently invoked section 263, reasoning that the assessee had not produced the end-user licence agreement during assessment. According to the CIT, the AO had failed to verify whether copyright had been fully transferred to Indian purchasers, rendering the assessment erroneous & prejudicial to Revenue’s interests. By order dated 9 October 2025, the CIT set aside the assessment & directed fresh examination.
