Facts of the Case

Convergys Customer Management Group Inc., the appellant/assessee, had multiple pending appeals before the Delhi High Court concerning income tax disputes involving international taxation for various assessment years.

During the pendency of these appeals, the tax dispute between the assessee and the Indian tax authorities was settled through the Mutual Agreement Procedure (MAP) under the India-USA DTAA.

The Competent Authority of India (CBDT) issued a resolution order under Section 90 of the Income Tax Act, 1961 read with Article 27 of the India-USA DTAA on 11.12.2017 covering Assessment Years 2002-03 to 2004-05 and 2006-07 to 2012-13.

Pursuant to acceptance of the MAP resolution, the assessee agreed to withdraw all pending litigation.

Issues Involved

  1. Whether pending tax appeals can be withdrawn after settlement under Mutual Agreement Procedure (MAP) under the DTAA?
  2. Whether Revenue appeals arising from the same settled dispute should also be withdrawn?
  3. What is the legal effect of a resolution passed under Section 90 read with Article 27 of the India-USA DTAA?

Petitioner’s Arguments (Assessee’s Contentions)

  • The assessee submitted that the tax disputes stood resolved under the Mutual Agreement Procedure under the India-USA DTAA.
  • The assessee accepted the resolution passed by the Competent Authority of India.
  • In view of the settlement, continuation of the appeals became unnecessary.
  • Accordingly, permission was sought to withdraw the pending appeals.

Respondent’s Arguments (Revenue’s Contentions)

  • The Revenue acknowledged the settlement under the Mutual Agreement Procedure.
  • It informed the Court that several Revenue appeals involving the same issues were also covered by the same DTAA settlement mechanism.
  • The Revenue stated that instructions had been received for withdrawal of its own pending appeals as well.
  • A formal communication from DCIT International Taxation Circle was placed on record confirming the settlement and acceptance by the assessee.

Court Findings / Court Order

The Delhi High Court recorded that the dispute had been amicably resolved through the Mutual Agreement Procedure under the India-USA Double Taxation Avoidance Agreement.

Considering the settlement and the assessee’s acceptance of the resolution:

  • The applications seeking withdrawal of the appeals were allowed.
  • The appeals filed by the assessee were dismissed as withdrawn.
  • The Revenue’s connected appeals, being covered by the same settlement framework, were also dismissed as withdrawn.

Thus, the Court formally closed the litigation in light of the DTAA-based settlement.

Important Clarification

This judgment does not decide the substantive tax issues on merits. The High Court merely recognized and gave effect to the settlement reached through the Mutual Agreement Procedure under the DTAA framework.

Hence, this case serves as an important precedent on procedural closure of tax litigation after MAP settlement, rather than adjudication on tax liability

Link to download the order - https://delhihighcourt.nic.in/app/case_number_pdf/2018:DHC:8711-DB/SRB13032018ITA32014_125651.pdfTop of Form

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