ACIT Vs Aditya Birla Sun Life Insurance Co (ITAT Mumbai)
Summary: The appeal was filed by the Revenue against the order dated 25.06.2025 passed by the Commissioner of Income Tax (Appeals), Mumbai for Assessment Year 2014-15. The dispute concerned whether Aditya Birla Sun Life Insurance Co. was required to deduct tax at source on reinsurance premiums remitted to two overseas entities and could consequently be treated as an assessee in default under Section 201 of the Income-tax Act, 1961.
The assessee, a resident corporate entity engaged in providing life insurance services, had entered into Risk Premium Reinsurance Agreements with RGA International Reinsurance Company Limited, Ireland and Munich Reinsurance, Germany. During the relevant year, it remitted Rs.53,31,41,051/- to RGA International Reinsurance Company Limited and Rs.7,03,19,188/- to Munich-Re towards reinsurance premium. The Assessing Officer issued a notice under Section 133(6) of the Act seeking details regarding the payments and tax deducted thereon.
The assessee explained that the overseas entities did not have any business connection or Permanent Establishment (PE) in India and that the reinsurance premium, being business income in their hands, was not taxable in India. The Assessing Officer did not accept the explanation. In relation to RGA International Reinsurance Company Limited, he considered its wholly owned Indian subsidiary, RGA Services India Private Limited, to constitute its PE, relying upon the decision in the case of Bharti Axa Life Insurance Co. Ltd. for Assessment Years 2011-12 to 2014-15. In relation to Munich Re, the Assessing Officer relied upon its Indian subsidiary and concluded that the services provided by the Indian subsidiaries were connected with the reinsurance business of their parent companies. He further considered the payments attributable to Indian PEs and liable as Fees for Technical Services (FTS).
