SC Refuses to Reopen Taxability of Foreign Payments, Applies Engineering Analysis Ratio

The Revenue filed Special Leave Petitions before the Supreme Court challenging the judgment dated 02.09.2024 passed by the Karnataka High Court in Writ Appeal No. 663/2024 in the case of Maxis International SDN BHD. The dispute concerned the taxability of payments made to the foreign entity and whether such receipts were liable to be taxed in India.

The Deputy Commissioner of Income Tax sought to assail the High Court’s ruling by contending that the issue required reconsideration. There was delay in filing the Special Leave Petitions, for which applications seeking condonation were moved.

Main Issue: Whether the Revenue’s challenge to the Karnataka High Court judgment survived for consideration when the legal issue stood conclusively settled by the Supreme Court in Engineering Analysis Centre of Excellence Pvt. Ltd.

SC’s Order: The Supreme Court first condoned the delay in filing the Special Leave Petitions. The Court noted that the controversy raised by the Revenue was squarely covered by its earlier authoritative judgment in Engineering Analysis Centre of Excellence Private Limited vs. Commissioner of Income Tax.

The Court observed that nothing survived for adjudication in the present matters. Thus, the Special Leave Petitions were dismissed. All pending applications were also disposed of.

To Read Full Judgment, Download PDF Given Below