TMI Blog2008 (8) TMI 480X X X X Extracts X X X X X X X X Extracts X X X X ..... ucting the tax at source it had remitted the entire fees collected by it on behalf of the IIT, Chicago to the foreign company. - we are of the opinion that there is no necessity for the assessee to deduct the tax at source when a foreign company has not earned any profit or income in India by conducting a trade or business in India. - 11 of 2004 - - - Dated:- 6-8-2008 - K. L. MANJUNATH and A. S. PACHHAPURE JJ. M. V. Seshachala for the appellants. Kumar for M/s. King and Partridge for the respondent. JUDGMENT K. L. MANJUNATH J. This appeal is by the Revenue challenging the order passed by the Income-tax Appellate Tribunal, Bangalore Bench, in I. T. A. No. 8l6/Bang/2002 dated August 26, 2003, for the assessment year 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a and it is not carrying on any business or trade in India, therefore, there was no necessity for the assessee to deduct tax at source as required under section 195 of the Income-tax Act and requested the Commissioner of Income-tax (Appeals), to allow the appeal and set aside the order passed by the Assessing Officer. The contentions urged by the assessee were turned down and the appeal ultimately came to be dismissed. Against which, a second appeal before the Income Appellate Tribunal, Bangalore, was filed. The Income-tax Appellate Tribunal, Bangalore having heard the counsel for the parties held that in view of the agreement entered into between IITC and the assessee and in view of the Double Taxation Avoidance agreement for United States ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out considering the pith and substance of the agreement entered into between the assessee and IIT, Chicago has passed an order in favour of the assessee. Therefore, he requests the court to set aside the order passed by the Tribunal. 6. Per contra, the learned senior counsel appearing for the assessee submits that IIT, Chicago is having a permanent establishment in USA and it is not conducting any business and it is imparting education through internet and any fees collected by the IIT, Chicago for rendering services to the students of India through internet with the assistance of the assessee, can not be treated as an income from the business. To support his argument he has relied upon the judgment of the Supreme Court in J. P. Unni K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent assessment year, in the case of the assessee and IIT, Chicago. 9. From the judgment of T. M. A. Pai Foundation v. State of Karnataka [2002] 8 SCC 481, it is no longer in dispute that imparting education can not be treated as a business or commerce. It is also not in dispute in the present case what is imparted is an education and IIT, Chicago has not conducted any business in India. If IIT, Chicago has not conducted any business in India, if the assessee has collected fees and transferred it to IIT, Chicago without deducting the tax at source as contemplated under section 195 of the Income-tax Act, we are of the opinion that there is no necessity for the assessee to deduct the tax at source when a foreign company has not earned an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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