2025 (5) TMI 15

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..... 263. The issue is whether tax has to be deducted in respect of payments made to M/s. Exprover in Belgium. Brief facts: 3. In the earlier round of proceedings, the Tribunal in its Order dated 29th October 2018 in ITA No.2394/Mds/2017, had directed the AO to consider whether the fees for technical services paid to M/s Exprover is not taxable in India particularly with reference to the provision regarding Most Favoured Nation Clause ("MFN") in the DTAA with Belgium. (Pages 77-82 @ pg 81 of the Paper Book). 4. The Assessing Officer ('AO' in short), while giving effect to the order of the ITAT (Page 83 of PB), had held that the most favoured nation clause of the DTAA will apply. Consequently, for fees for technical services to be taxable in I .....

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..... Paper Book) At page 10 of their order has held that a subsequent decision of the Supreme Court would not render an earlier decision of AO erroneous provided the earlier decision was made as per the law prevailing at the time of making the order. In this case, when the AO passed the order, there were High Court decisions in favour of the claim of the Assessee. 7. The ld. counsel further submitted that without entering into the controversy regarding the subsequent decision of an Apex Court which would render the earlier decision erroneous, it is submitted that order of the AO is not erroneous and even if it is set aside it will be only academic as the payment to M/s. Exprover is not taxable in India, with or without Most favoured Nation cla .....

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..... ary to apply to AO u/s. 195(2) for lower deduction if the Payer is of the opinion that no tax is deductible from the remittance (G.E Technology Centre P Ltd 327 ITR 456 SC).Therefore, the conclusion of the AO that payment to M/s Exproveris not subject to tax in India and hence no tax need be deducted therefrom is not erroneous in view of the decision of ITAT on same issue in Assessee's own and hence ld.CIT does not have jurisdiction to revise under section 263. He stated that even otherwise it is only academic, because if it is set aside lo AO, the AO has to follow the order of the Tribunal for subsequent years and hold that payment to M/sExproveris not taxable in India whether the Most Favored Clause of DTAA is applicable or not. 10. .....

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