In Brief
A UAE-incorporated company engaged in offshore fabrication and onshore installation of petroleum platforms challenged a TDS certificate requiring 4% deduction on all ONGC contract payments (both overseas and India-based work) for FY 2019-20. The company argued that only India-based activities should be taxable and sought 0% TDS as issued in prior years. The Supreme Court split 1-1 on whether the certificate was valid, resulting in a reference. Justice Banerjee upheld the certificate, noting that PE determination cannot be concluded in Section 197 proceedings and the company had requested the 4% rate itself. Justice Maheshwari would have allowed the appeal, finding the prescribed Rule 28AA procedure was not followed and consistency should govern where circumstances unchanged.
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