No TDS on payment to non-resident which not taxable in India

Brief of the Case

Bombay High Court held In the case of M/s. Sesa Resources Ltd. vs. DCIT/Union of India that in the Judgment of the Division Bench in the case of Gujarat Reclaim & Rubber Products Ltd. Income Tax Appeal No.169/2014 dated 08.12.2015, it was held that before effecting deduction at source one of the aspects to be examined is whether such income is taxable in terms of the Income Tax Act. This aspect has not been considered by Tribunal while concluding that the Appellant has committed a default in not deducting the tax at source. As the said Division Bench Judgment was not available while passing the order by the learned Tribunal, we find it appropriate, in the interest of justice, to quash and set aside the impugned order of the Tribunal to the extent it holds that the Appellant has defaulted in not deducting tax at source and remand the matter to the Tribunal to examine the said aspect afresh in the light of the judgment of this Court.

Facts of the Case

The following substantial question of law was raised –

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