2025 (4) TMI 1631 - SCH - Income Tax

Enforceability of treaty - Necessary notification not issued by the Government for brining the treaty into force - Most Favoured Nation (MFN) - Indian treaties with countries that are members of the Organisation for Economic Cooperation and Development ( OECD ) - as decided by HC 2023 (11) TMI 1373 - DELHI HIGH COURT notification u/s 90(1) is necessary and a mandatory condition for a court authority or tribunal to give effect to a DTAA or any protocol changing its terms or conditions which has the effect of altering the existing provisions of law. The fact that a stipulation in a DTAA or a Protocol with one nation requires same treatment in respect to a matter covered by its terms subsequent to its being entered into when another nation (which is member of a multilateral organization such as OECD) is given better treatment does not automatically lead to integration of such term extending the same benefit in regard to a matter covered in the DTAA of the first nation which entered into DTAA with India. In such event the terms of the earlier DTAA require to be amended through a separate notification u/s 90. And benefit of a same treatment clause based on entry of DTAA between India and another state which is member of OECD the relevant date is entering into treaty with India and not a later date when after entering into DTAA with India such country becomes an OECD member in terms of India s practice. HELD THAT - We are not inclined to interfere with the impugned judgment and order passed by the High Court. Hence the Special Leave Petitions are dismissed. Pending application(s) if any shall stand disposed of.

Summary

The Supreme Court, with Hon'ble Mr. Justice Pamidighantam Sri Narasimha and Hon'ble Mr. Justice Manoj Misra presiding, heard the Special Leave Petitions filed by the petitioner(s) represented by senior counsel Mr. Harish Salve. After considering the submissions, the Court stated, "We are not inclined to interfere with the impugned judgment and order passed by the High Court." Consequently, the Special Leave Petitions were dismissed, and any pending applications were disposed of.