2025 (4) TMI 1665 - HC - Income Tax

Maintainability of appeal by tax resident in United Kingdom a non-filer - as submitted a person who has not filed its return u/s 139 or in response to a notice issued u/s 148 of the Income Tax Act 1961 is barred from maintaining an appeal HELD THAT - We find that the aforesaid contention is bereft of any merit. The provisions of Section 260A of the Act is unambiguous and an appeal will lie against every order passed by the Tribunal provided that the court is satisfied that it involves the substantial question of law. In the present case the Assessee has projected several questions of law. In our view the following questions of law arise for consideration of this Court A. Whether the Appellant was taxable in respect of receipts of INR 3, 31, 98, 980/- under the provisions of the Act or the India - UK DTAA? B. Whether the Tribunal erred in law in re-characterising business receipts by the Appellant as FTS under Explanation 2 to section 9(1)(vii) of the Act and Article 13(4)(c) of the India UK DTAA? The appeal is admitted on the aforesaid questions. List for hearing on 13.05.2025.

Summary

The Delhi High Court, through Hon'ble Justices Vibhu Bakhr and Tejas Karia, addressed ITA 92/2025 concerning the maintainability of an appeal by a UK tax resident Assessee who had not filed returns under Sections 139 or 148 of the Income Tax Act, 1961. The respondent contended that non-filing barred the appeal. The Court rejected this, holding that Section 260A of the Act "is unambiguous and an appeal will lie against every order passed by the Tribunal provided that the court is satisfied that it involves the substantial question of law." The Court admitted the appeal on two substantial questions of law: (A) whether the Assessee was taxable under the Act or the India-UK DTAA for receipts of INR 3,31,98,980/-, and (B) whether the Tribunal erred in re-characterising the business receipts as fees for technical services (FTS) under Explanation 2 to Section 9(1)(vii) and Article 13(4)(c) of the DTAA. The matter was listed for hearing on 13.05.2025, with liberty granted to parties to file brief submissions.