Perfetti Van Melle Holding B V vs Commissioner Of Income Tax Ii
2021 Latest Caselaw 2817 Del

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                         *    IN THE HIGH COURT OF DELHI AT NEW DELHI
                         +     W.P.(C) 11618/2021
                               PERFETTI VAN MELLE HOLDING B V                             ..... Petitioner
                                                  Through      Mr.Deepak Chopra, Advocate.

                                                  versus

                               COMMISSIONER OF INCOME TAX II           ..... Respondent
                                           Through  Mr.Kunal Sharma, Advocate.

                         %                                      Date of Decision: 11th October, 2021
                               CORAM:
                               HON'BLE MR. JUSTICE MANMOHAN
                               HON'BLE MR. JUSTICE NAVIN CHAWLA

                         MANMOHAN, J. (Oral)

1. The petition has been heard by way of video conferencing.

2. Present writ petition has been filed seeking directions to the Respondent to dispose of the application dated 18th August, 2021 filed by t h e Petitioner under Section 264 of the Income Tax Act , 1961 ("t he Act") in a time bound manner and in accordance with law.

3. Learned counsel for the petitioner states that the petitioner is a company incorporated under the laws of Netherlands an d is en gaged in t he manufacture and sale of sugar confectionary/gum and provision of operational and other support services for the benefit of companies of Perfetti Van Melle Group (Perfetti Group) situated in various countries. He states that the Petitioner holds 99.999% of the shares of Perfet ti Van Melle In dia Private Limited ("Perfetti India") in the form of equ ity sh ares sin ce in ception. He

W.P.(C) No.11618 /2021

Digitally Signed By:JASWANT SINGH RAWAT Signing Date:13.10.2021 15:53:43 further states that during the current Financial Year ("FY") i.e. 2021-22, Perfetti India proposes to distribute a dividend of INR 30,00,00,000 (estimated) to its equity shareholders out of which dividend of INR 29,99,98,913 is estimated to be received by the Petitioner by 31st October 2021.

4. Learned counsel for the petitioner st ates t hat t he Petitioner filed an application dated 12th June, 2021 under Section 197 of the Act before the Assessing Officer (AO) requesting him to issue a certificate au thorizing t he Petitioner to receive dividend income from Perfetti India subject to lower withholding tax rate of 5% as applicable under the Double Taxation Avoidance Agreement ("DTAA") between India and Netherlands read wit h the Protocol. He submits that the Protocol to India Netherlands DTAA provides for "Most Favoured Nation" ("MFN") clause in terms of which when India enters into a DTAA with another member country of the Organisation for Economic Cooperation and Development ("OECD") wherein India limits its tax deduction at source ("TDS") to a lower rat e t h an the one agreed between India and Netherlands, then from the date such agreement comes into force, the rates or scope con t emplated in su ch other treaty shall apply to India-Netherlands DTAA. He states that though the India-Netherlands DTAA prescribes a withholding rate of 10%, yet as In dia has entered into DTAAs with other OECD member countries being Slovenia / Lithuania / Colombia wherein tax rate on dividend in come was agreed at a lower rate of 5%, owing to the MFN clause, the lower withholding rat e sh all also be applicable to any dividend income covered under the India- Netherlands DTAA. He further states that the Petitioner filed a detailed reply to all the queries raised by the AO however, the Pet itioner's application t o

W.P.(C) No.11618 /2021

Digitally Signed By:JASWANT SINGH RAWAT Signing Date:13.10.2021 15:53:43 withhold tax at a lower rate was rejected vide order dated 27 th July, 2021 an d a certificate under Section 197 of the Act at the rate of 10% was issued t o t h e Petitioner.

5. Learned counsel for the petitioner states that in the order rejecting t he Petitioner's application, the AO observed that the benefit of the MFN clau se could not be availed by the Petitioner as Slovenia / Lithuania / Colombia were not OECD countries at the time when the India - Net herlands Treaty came into effect. He states that aggrieved by the withholding cert ificate issued by the AO, the Petitioner filed an application dated 18th August, 2021 before t h e Respondent under Section 264 of the Act. He states that, however, t he sam e has not been decided till now despite repeated reminders. He further su bmits that the principle issue involved in the present case i.e. wit hholding t ax at a lower rate of 5% in respect of dividend income has already been decided in the Petitioner's favour by this court in Concentrix Services Netherlands B.V. v. ITO (TDS), W.P.(C) 9051/2020 [2021] 127 taxmann.com 43 (Delhi) and Nestle SA v. Assessing Officer, Circle (International Taxation), W.P.(C) 3243-2021.

6. Issue notice. Mr.Kunal Sharma, Advocate accepts notice on beh alf of the Respondent. He states that he has no objection if the Respondent is directed to dispose of the application filed by the Petitioner under Section 264 of the Act in a time bound manner.

7. Keeping in view the limited prayer made, t his Court disposes of t h e present writ petition directing the Respondent to decide the Petitioner's application dated 18th August, 2021 filed under Sect ion 264 of t h e Act , by way of a reasoned, order in accordance with law, within eight weeks.

W.P.(C) No.11618 /2021

Digitally Signed By:JASWANT SINGH RAWAT Signing Date:13.10.2021 15:53:43

8. The order be uploaded on the website forthwith. Copy of t h e order be also forwarded to the learned counsel through e-mail.

MANMOHAN, J

NAVIN CHAWLA, J OCTOBER 11, 2021 KA

W.P.(C) No.11618 /2021

Digitally Signed By:JASWANT SINGH RAWAT Signing Date:13.10.2021 15:53:43