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2023 (9) TMI 555 - BOMBAY HIGH COURTTDS u/s 201(1) - TDS u/s 195 - assessment order in the hands of the non-resident payee - payment for purchase of subscription as taxable as per the provisions of Article 7 read with Article 5 of the India Singapore Double Taxation Avoidance Agreement (“DTAA”) - AO held that the impugned subscription fees liable to be taxed as ‘royalty’ within the meaning of Section 9(1)(vi) of the Act as well as Article 12(3) under the DTAA - ITAT held that the order passed under Section 201(1) within time in case of resident prayer had become invalid just because subsequently there was no assessment made in the hands of the non-resident payee within 6 years - HELD THAT:- Considering the provisions of Section 201 of the Act, one thing, therefore, is certain, in order to treat the payer as an assessee-in-default, it is of utmost importance that income so paid or credited to the account of payee is capable of being brought within the purview of tax net and such assessment can be lawfully made on the payee. The ITAT also came to the conclusion that assessment should be lawfully made by AO on the payee/recipient. Since that has not been done, the order of AO under Section 201(1) read with Section 201(1A) of the Act was unsustainable. We are unable to fault this conclusion arrived at by the ITAT.
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