Supreme Court dismissed MFN review petition filed by the taxpayers in case of Nestle SA
Hon’ble SC dismissed the review petition filed by taxpayers in case of Nestle SA vide order dated 6th August 2024 holding that no case for review of the original order dated 19.10.2023 is made out.
Hon’ble Supreme Court in the case of Nestle SA & Others [Civil Appeal No 1420/2023] vide order dated 19.10.2023 had ruled that the issuance of a notification under Section 90 of the Income Tax Act, 1961 (the Act) is an indispensable and obligatory requirement. A stipulation in a DTAA or a Protocol with one nation, requires same treatment to another nation does not apply automatically, without amending such DTAA through separate notification.
Furthermore, the Supreme Court held that, for a party to claim benefit of a “same treatment” clause, based on entry of DTAA between India and another state which is member of OECD, the relevant date is entering into treaty with India, and not a later date, when, after entering into DTAA with India, such country becomes an OECD member, in terms of India’s practice.
The SC ruling and observations has far reaching impact for the taxpayers who were claiming MFN benefit relying on HC rulings including Delhi HC. The taxpayers who were party to the dispute had filed review petition before SC which was admitted in April 2024. The same has been dismissed by SC stating the reason that after careful perusal of review petition, no case is made out by the taxpayers for review of original order. The issue has thus attained finality and become a law of land.
For details, please refer judgement of SC in case of Nestle SA vs Assessing Officer Intl Tax 2(2)(2). Toyota in Review Petition 77 of 2024.
DISCLAIMER: – The summary information herein is based on SC ruling in review case of Nestle SA vide order dated 06.08.2024. While the information is believed to be accurate, we make no representations or warranties, express or implied, as to the accuracy or completeness of it. Readers should conduct and rely upon their own examination and analysis and are advised to seek their own professional advice. This note is not an offer, advice or solicitation. We accept no responsibility for any errors it may contain, whether caused by negligence or otherwise or for any loss, howsoever caused or sustained, by the person who relies upon it.
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