Pr. Commissioner Of Income Tax (Intl Tax 2 v. M/S Planetcast International Pte

$~12 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 601/2023 PR. COMMISSIONER OF INCOME TAX (INTL TAX 2) ..... Appellant Through: Mr. Sanjeev Menon, Jr. Standing Counsel for Mr. Zoheb Hossain, Sr. Standing Counsel. Standing Counsel for Mr. Zoheb Hossain, Sr. Standing Counsel. versus M/S PLANETCAST INTERNATIONAL PTE. ..... Respondent Through: Mr. Ajay Vohra, Sr. Adv. with Mr. Kishore Kunal, Mr. Mahesh Singh and Mr. Jayesh S., Advs. CORAM:HON'BLE MR. JUSTICE YASHWANT VARMAHON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV O R D E R% 09.02.2024 1. 1.The Department in the instant appeal seeks to question the correctness of the view expressed by the Income Tax Appellate Tribunal [‘ITAT’] as per the impugned order dated 19 December 2022 for Assessment Year [‘AY’] 2017-18. The dispute itself emanates out of a playout service which was being provided by the respondent/assessee and which as per the explanation tendered embodied the following features :- “Playout Service Playout services are inextricably linked to Uplinking services and encompasses provision of equipment, infrastructure and manpower to manage continuous playing of channel content based on minute to minute schedule. 2. For providing Disaster recovery Uplinking and Playout services, the up linking and playout equipment installed at the teleport facility of Adore at Singapore is kept pre-configured and in readiness. In the event that the main uplink and playout equipment becomes unavailable/non-functional, the uplink at Singapore facility immediately gets activated. All operations are monitored by highly trained operators and supervisors of Adore in Singapore on a 24 x 7 basis.” 2.The ITAT has while dealing with the aforesaid aspect come to conclude that the nature of the service being provided would not fall within the ambit of managerial, technical or consultancy services. It has ultimately and on an appreciation of the facts as well as the structure of the playout service come to hold that it was an integral feature of broadcasting and transmission of channels and thus did not involve any decision making. It has been found that the service was essentially to ensure consistency in the broadcasting of channels and thus ensure uninterrupted availability thereof. It has ultimately and on that basis come to conclude in Para 42 that the recovery playout services would not fall within the scope of Fee for Technical Services. 3.While this would have been sufficient, the ITAT appears to have proceeded further to also notice the provisions made in Article 12(4)(b) of the Double Tax Avoidance Agreement [‘DTAA’] and alluded to the added requirement of the service including “making available of” technical knowledge, experience, skill, knowhow or processes enabling the person acquiring the service to apply the technology contained therein. 4.According to Mr. Menon, the ITAT has in that respect incorrectly appreciated the scope of the expression „making available‟ as well as the other facets of Article 12(4)(b) of the DTAA and which speak of enablement to apply the technology contained therein. 5.In our considered opinion, once the ITAT had come to conclude that the service in question would not qualify within the meaning of the expressions „managerial‟, „technical‟ or „consultancy‟, there perhaps was no occasion to travel further. 6.While we thus leave the question of the interpretation liable to be accordedto Article 12(4)(b) of the DTAA open to be addressed by the Department in an appropriate case, in light of the findings of fact which have ultimately been rendered by the ITAT and have been referred to above, we find that the appeal raises no substantial question of law. Consequently, it shall stand dismissed. YASHWANT VARMA, J. PURUSHAINDRA KUMAR KAURAV, J.FEBRUARY 09, 2024/RW