Income Tax: High Court Allows NIL TDS for Rs. 65.97 Cr Receipts

Income Tax: High Court Allows NIL TDS for Rs. 65.97 Cr Receipts

In W.P.(C) 17674/2025, Refinitiv US LLC, a US-incorporated non-resident company, challenged before the Delhi High Court the order dated 22.07.2025 and certificate dated 11.07.2025 issued under Section 197 of the Income Tax Act, 1961 prescribing 15% withholding tax. The case concerned payments for Matching Solutions, an electronic forex trading platforms and related Support Services supplied under agreements with its Indian affiliate.

The petitioner contended that the services did not constitute “Fees for Included Services” under Article 12(4) of the India-US DTAA and sought a NIL withholding certificate. Although the Assessing Officer partly accepted the application, a 15% certificate was issued. Relying on the earlier judgment in Financial And Risk Organisation Limited v. Income Tax Officer, the petitioner argued that Matching Solutions were not taxable. The Revenue did not seriously contest this aspect but maintained the 15% rate for Support Services.

Main Issue: Whether the petitioner was entitled to a NIL rate certificate under Section 197 for Matching Solutions and Support Services.

HC Held: The ITAT partly allowed the writ petition. The Court held that the issue was covered by its earlier decision dated 10.02.2026 and that the petitioner was entitled to a NIL rate certificate. The impugned order and certificate were set aside to that extent, and the competent authority was directed to issue a NIL rate certificate within 15 days for Matching Solutions (Rs. 65,97,09,956/-). For Financial Year 2025-26 (AY 2026–27) and subsequent years, NIL certificates were directed to be issued within 30 days of application in respect of Matching Solutions.

The Court permitted the certificate prescribing 15% withholding to continue for the current year and refrained from adjudicating on the merits of taxability. Liberty was granted to the competent authority to examine the issue in future years in accordance with law, and to the petitioner to seek appropriate remedies thereafter. The Court further clarified that the authority may depart from the NIL direction for Matching Solutions in future if a reasoned finding is recorded regarding existence of a Permanent Establishment or taxability in India, after issuing prior notice, and subject to full and true disclosure by the petitioner

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