CIT (International Taxation)-1 Vs Coursera Inc. (Supreme Court of India)
The Supreme Court considered a Special Leave Petition filed by the Revenue against the judgment of the Delhi High Court, which had upheld the decision of the Income Tax Appellate Tribunal (ITAT) in favour of the assessee. The Supreme Court condoned the delay but declined to interfere with the High Court’s judgment, thereby dismissing the petition.
Before the High Court, the dispute concerned the taxability of receipts earned by a US-based company operating a global online learning platform, for Assessment Year 2020–21. The Assessing Officer (AO) had sought to tax such receipts as fees for technical services (FTS) under Section 9(1)(vii) of the Income Tax Act and as fees for included services (FIS) under Article 12 of the India–USA Double Taxation Avoidance Agreement (DTAA). The AO relied on the nature of services, including customized user services, user support, and elements involving human intervention, to conclude that the assessee provided technical services.
Read HC Judgment in this case: Online Platform Income Not Taxable as FTS Due to Failure of ‘Make Available’ Test: Delhi HC
The assessee contended that it merely operated a platform hosting courses created and delivered by third-party educational institutions and did not provide technical services or “make available” any technical knowledge, skill, or know-how to users. It argued that its role was limited to facilitating access to content and therefore its receipts were neither royalty nor FTS/FIS under the Act or the DTAA.
