CIT Vs Coursera Inc. (Delhi High Court)
The Delhi High Court adjudicated an appeal filed by the Revenue under Section 260A of the Income Tax Act, challenging an order of the Income Tax Appellate Tribunal (ITAT) for Assessment Year 2020–21. The ITAT had allowed the assessee’s appeal and held that receipts from services provided by the assessee were not taxable as fees for technical services (FTS) under the Act or as fees for included services (FIS) under Article 12 of the India–USA Double Taxation Avoidance Agreement (DTAA).
Read SC Judgment in this case: SC Upholds Non-Taxability of Online Platform Income Due to Failure of ‘Make Available’ Test
The assessee, a company incorporated in the United States and a tax resident there, operated a global online learning platform providing courses and degrees from various universities and institutions. During the relevant assessment year, the assessee received substantial income from providing access to such courses through its platform. The Assessing Officer (AO) treated these receipts as FTS under Section 9(1)(vii) of the Act and as FIS under Article 12 of the DTAA, primarily on the ground that the services involved user support, customized services, and a degree of human intervention.
The assessee contended that it merely acted as an intermediary or facilitator by providing access to course content created and delivered by third-party educational institutions. It argued that it did not provide any technical services nor did it “make available” any technical knowledge, skill, or know-how to its users, which is a necessary condition for classification as FIS under the DTAA.
