Court Annuls Reassessment Order on Software Sales Income, Citing Lack of Permanent Establishment in India.

The High Court considered the validity of reassessment proceedings regarding the taxability of income without Permanent Establishment in India under India-Japan DTAA, specifically income from the sale/trade of canned software. The Court found the respondent's failure to address fundamental challenges raised by the petitioner, including the contention that the income from software sales did not constitute royalty and the absence of a Permanent Establishment in India. The respondent's responses were deemed inadequate as they deferred critical determinations on royalty and Permanent Establishment for further verification, contrary to the requirement of subjective satisfaction before initiating reassessment. Consequently, the Court quashed the order and notice under sections 148A (d) and 148 in favor of the assessee. .....

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