Case Title: VODAFONE MAURITIUS LIMITED Versus ACIT
Case No.: W.P.(C) 7622/2023 & CM Nos.29564-65/2023
Date: 30.05.2023
CORAM: HON’BLE MR. JUSTICE RAJIV SHAKDHER, HON’BLE MR. JUSTICE GIRISH KATHPALIA
Introduction
The legitimacy of the Tax Residence Certificate (TRC) has been challenged, and the Delhi High Court has ordered the AO to submit information to Vodafone Mauritius. Nothing has been presented to the petitioner, as noted by the bench of Justice Rajiv Shakdher and Justice Girish Kathpalia, that would lead them to believe that the TRC they were given is not a valid legal document. Despite having a Tax Residency Certificate (TRC) issued in its favour, the petitioner has nonetheless contested the order and notice issued by the Assessing Officer.
Facts of the Case
The petitioner is an Indian firm known as Bharti Infotel Pvt. Ltd., and the AO has attempted to apply the Income Tax Act, 1961 to a transaction involving the transfer of shares by the petitioner. The shares were sold by the petitioner to Bharti Enterprises (Holding) Pvt. Ltd. It is agreed that the deal was made during FY 2015-16. The share sale resulted in the petitioner receiving Rs. 1,295 crores. The petitioner was paid the amount in full, with no withholding for taxes. The petitioner argued that the India-Mauritius Double Taxation Avoidance Agreement (DTAA) should apply to it because it has been awarded a TRC under Mauritius legislation.
Courts Analysis and Decision
The AO decided that the petitioner was not entitled to treaty benefits since the TRC it was given was not sufficient evidence of its residence status. The court took note of the AO’s assertion that the assessed intended to engage in tax evasion via treaty shopping without providing any evidence or explanation to support this contention. While dismissing the notices and orders, the court ordered the AO to present the petitioner with evidence that the TRC on which she is relying is unreliable.
Judgment- click here to review the judgment
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Written by- Anushka Satwani
