BNP PARIBAS NET LIMITED,UNITED KINGDOM V. DEPUTY COMMISIONER OF INCOME TAX (INTERNATIONAL TAX) - 1(3)(1), MUMBAI

ITITA 1599/MUM/2025

AI Insights

The case involves BNP Paribas Net Limited, a UK-based company, appealing against the assessment order passed by the Deputy Commissioner of Income Tax, which treated income from telecom connectivity services provided to its Indian affiliates as Fees for Technical Services (FTS) under the India-UK tax treaty. The Tribunal examined whether the services provided constituted FTS by assessing if the technical knowledge, experience, skill, or know-how was 'made available' to the Indian affiliates, a requirement under Article 13 of the India-UK Tax Treaty. The Tribunal concluded that the services did not meet this criterion, leading to the allowance of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 787598 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 12 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 17-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2022-2023
• Appeal Filed On: 06-03-2025
• Other Referred Cases: De Beers India Minerals Pvt. Ltd. 346 ITR 467 (Kar), Sky Cell Communication Ltd. [2001] 251 ITR 53 (Mad)
• Laws Referred To: Income-tax Act, 1961, India-UK Tax Treaty
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Additional evidence; Initiation of penalty proceedings; Double taxation relief; Permanent establishment
• Section: 143(3); 142(1); 234B; 37

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH MUMBAI BEFORE SHRI SAKTIJIT DEY, HON'BLE VICE PRESIDENT AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No. 1599/MUM/2025 Assessment Year: 2022-23 BNP PARIBAS NET LIMITED 10 Harewood Avenue, London, NW16AA, United Kingdom, United Kingdom - 999999 (PAN: AAFCB0778A) Vs Deputy Commissioner of Income Tax (International Tax) - 1(3)(1), Mumbai (Appellant) (Respondent) Present for: Assessee : Shri Siddesh Chaugule and Ms. Harshita Bihani, CAs Revenue : Shri Krishna Kumar, Sr. DR Date of Hearing : 19.08.2025 Date of Pronouncement : 17.11.2025 O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the assessment order passed under the directions of Dispute Resolution Panel-1, Mumbai, vide order no. ITBA/DRP/F/144C(5)/2024-25/1071366156(1), dated 19.12.2024, u/s. 144C(5) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), for Assessment Year 2022-23. Printed from counselvise.com 2 IT(IT)A No. 1599/Mum/2025 BNP Paribas Net Ltd. AY 2022-23 2. Grounds taken by the assessee are reproduced as under: “Ground No. 1: Invalid service of notices under Section 142(1) of the Act and accordingly, order passed u/s. 143(3) read with section 144C(13) of the Act is bad in law 1. On the facts and circumstances of the case, the learned AO has erred in passing the draft assessment order without giving reasonable opportunity of being heard as the learned AO failed to serve the notices u/s. 142(1) of the Act. 2. On the facts and circumstances of the case, the learned AO failed to send the notices to the registered email address of the Appellant and these notices were only uploaded on income tax web portal. Thereafter, several reminders in respect to the aforesaid notice and show cause notice were also published only on the e- portal without any email notification to the Appellant thereby not complying with provisions of Rule 127 of the Income tax Rules, 1962 read with section 282 of the Act in relation to mode of service of notice. Ground No. 2: Taxing the income from rendering telecom connectivity services as Fees for Technical Services (FTS) under the India-UK tax treaty 3. Based on the facts and circumstances of the case, the learned AO has erred in law and on facts, in treating the income in relation to telecom connectivity services rendered to Indian affiliate entities of the Appellant under the head Income from Other Sources as Fees for Technical Services (\"FTS') under Article 13 of the India- UK Tax Treaty (the Tax Treaty) without appreciating the fact that such telecommunication network service is a standard activity undertaken by the Appellant and no customized activities are being undertaken, therefore, such activity should not qualify as FTS. 4. Without prejudice to Ground No. 3, the learned AO has erred in contending that the telecommunication services are taxable at the rate of 15% without appreciating that the said income is exempt as per the provisions of Article 13 of the tax treaty since it does not 'make available any technical knowledge, experience, skill, know-how or processes, Ground No. 3: Erroneous application of tax rate on income treated as FTS 5. Without prejudice to the above grounds, the learned AO has erred in applying tax rate of 15% as per the Tax Treaty as against 10% u/s. 9(1)(vii) read with section 115A of the Act applicable prior to amendment introduced by Finance Act, 2023 (effective from AY 2024-25). 6. On the facts and circumstances of the case, the learned AO has failed in appreciating that section 90(2) of the Act provides that where the Central Government has entered into an agreement with the Government of any country outside India for granting relief of tax, or as the case may be, avoidance of double taxation, then, in relation to an assessee to whom such agreement applies, the provisions of the Act shall apply to the extent they are more beneficial to the assessed. Printed from counselvise.com 3 IT(IT)A No. 1599/Mum/2025 BNP Paribas Net Ltd. AY 2022-23 7. Without prejudice to our contention that the services are not in the nature of FTS, the Act being more beneficial than the Tax Treaty, FTS income should be chargeable to tax at the rate of 10% under the Act for the year under consideration. Ground No. 4: Erroneous and excess levy of interest u/s. 234B of the Act 8. On the facts and circumstances of the case, the learned AO has erred in levying interest u/s. 234B of the Act. Ground No. 5: Excess computation of total interest 9. On the facts and circumstances of the case, the learned AO has erred in levying excess interest of 6,30,963 while computing the total interest liability. Ground No. 6: Incorrect amount of refund issued 10. On the facts and circumstances of the case, the learned AO has erred in considering a refund of INR 1,04,992 as granted to the Appellant without appreciating the fact that such refund has not been received by the Appellant. Ground No. 7: Penalty u/s. 270A of the Act 11. On the facts and circumstances of the case, the learned AO erred in initiating penalty proceedings u/s. 270A of the Act for underreporting of income.” 3. Ground No. 1 raised by the assessee is not pressed. Accordingly, the same is dismissed as not pressed. The effective ground in the present appeal is ground No. 2 in respect of taxing the income from rendering telecom connectivity services as fees for technical services (FTS) under the India-UK tax treaty. 4. Brief facts of the case are that assessee filed its return of income on 30.11.2022 reporting total income at Rs. 8,36,04,370/-. Assessee is a company incorporated in United Kingdom and is engaged in the business of providing telecom/network connectivity related services. Assessee is a tax resident of the country United Kingdom and does not have a permanent establishment (PE) in India. In the year under consideration, assessee reported its income under the head ‘income from other sources’ for Rs. 8,36,04,372/- in respect of group Printed from counselvise.com 4 IT(IT)A No. 1599/Mum/2025 BNP Paribas Net Ltd. AY 2022-23 infrastructure and telecommunication services rendered to its Indian affiliate entities. According to the ld. Assessing Officer, assessee has reported the income of Rs. 8,36,04,372/- under item No. 37 of schedule SI in the return of income, wherein the applicable tax rate is reflected as 1%. Ld. Assessing Officer issued show cause notice in respect of assessee claiming this amount as exempt for which nothing was submitted in the course of assessment proceedings. Ld. Assessing Officer, in absence of any supporting documents nor any justification furnished by the assessee held that the said amount is treated as fees for technical services, taxable at the rate of 15% under Article 13(1)(aa) of India-UK tax treaty. According to him, assessee could not justify how the services provided by the assessee to its group entities does not “make available”, any technical knowledge, experience, skill, know how to the recipient of the services and how as per Article 13 of the India- UK tax treaty, the said income does not qualify as FTS. Thus, a variation was proposed by the ld. Assessing Officer for the aforesaid treatment by passing a draft order u/s. 144C(1), dated 28.03.2024. 4.1. According to the assessee, in the said draft assessment order, ld. Assessing Officer had recharacterized the entire income of Rs. 8,36,04,370/- as FTS and brought the same to tax under Article 13 of the India-UK tax treaty. Aggrieved by the said draft assessment order, assessee filed its objections before the ld. Dispute Resolution Panel (DRP). Directions given by ld. DRP while adjudicating on the grounds of objections raised by the assessee are tabulated below for ready reference: Ground No. Brief ground taken before DRP DRP Directions Printed from counselvise.com 5 IT(IT)A No. 1599/Mum/2025 BNP Paribas Net Ltd. AY 2022-23 1 Invalid service of notices under section \"In this regard it is stated that the DRP proceedings are an extension of the assessment proceedings and adequate opportunity has been given to the assessee at this stage: The submissions of the assessee have been remanded to theAO for his comments and he has also submitted the same by way of a remand report, which has been shared with the assessee. Hence, there should not be any grievance with regard to the lack of opportunity of being heard. Hence the objection is dismissed.\" 2. Without prejudice to Ground 1 above, the learned AO erred in treating the income of the Ass essee as Fees for Technical Services as per the double taxation avoidance agreement between India and UK (India-UK Tax Treaty) The DRP while distinguishing the case laws that have been relied on has held as follows - \"6.6. 12. 1 1t is seen that the technical services provided by the assessee were not standard services but were customized according to the requirement of the customer. The services involved research and making available specialized knowledge and technical skills to the customers, which remained with these customers and could be used by these customers for their benefit on a permanent basis thereby satisfying the \"make available\" clause under Article 13(4)(c) of the DTAA. 6.6.17.. .In view of the above, the Panel is of the considered view that theAO has rightly treated the sum of Rs. 8,36,04,370/- as FTS taxable @ 15% as per Article 13 of the India-UK DTAA. The objection is accordingly dismissed.\" 3. Proposed levy of penalty under section 270A of the Act for underreporting of income The DRP has dismissed the aforesaid ground and has held as follows - \"In the scheme of DRP proceedings, an applicant assessee can file objections before the DRP in respect of any proposed variations prejudicial to its interest. Initiation of penalty proceedings are not a variation as envisaged in sub- section 144Cf1) of the Act. Initiations of penalties are separate and distinct proceedings under the Act and it is within the powers of the assessing officer. Objection to initiation of penalty proceedings cannot be a subject matter for consideration by the DRP. Therefore, this ground of objection is not maintainable and, hence, dismissed. \" 5. From the above, we note that on the issue relating to adequate opportunity to be given to the assessee, ld. DRP had accepted the submissions made by the assessee and called for a remand report from the ld. Assessing Officer which was shared and opportunity was given to furnish the rejoinder. Hence, this aspect of the case was taken care of by ld. DRP. Printed from counselvise.com 6 IT(IT)A No. 1599/Mum/2025 BNP Paribas Net Ltd. AY 2022-23 5.1. Crux of directions given by ld. DRP for holding the nature of income as FTS under Article 13 of the India-UK tax treaty is that services provided by the assessee are not standard services but are customized according to the requirements and involves making available specialized knowledge and technical skill to the customers, satisfying the “make available” clause under Article 13(4)(c) of the India- UK tax treaty. 6. As against the directions of ld. DRP, contention of the assessee is that, the said income is exempt as per the provisions of Article 13 of the India-UK tax treaty since it does not “make available” any technical knowledge, experience, skill, know how or processes. Assessee had submitted notes to the computation providing justification as to why the income received by it should not fall within the definition of FTS under Article 13 of the India-UK tax treaty. Assessee asserted on the provisions of section 90(2) to contend on the well established principle that the provisions of tax treaty overrides the domestic law to the extent that the provisions of tax treaty are more beneficial. Based on this well established principle, according to the assessee, who is a tax resident of UK, fact of which is undisputed, the provisions of India-UK tax treaty to the extent they are more beneficial than the provisions of the Act will apply, in determining the Indian tax liability for the assessee. 6.1. According to the assessee, there is a fundamental difference in the manner in which FTS is defined under the Act vis-a-vis under the India- UK tax treaty. Under Section 9 of the Act, mere rendering of technical services is enough for the services to be taxable as FTS. However, Article Printed from counselvise.com 7 IT(IT)A No. 1599/Mum/2025 BNP Paribas Net Ltd. AY 2022-23 13 of the India-UK tax treaty requires that technical knowledge, experience, etc., should be “made available” to the recipient. According to the assessee, since the definition of FTS is narrower under the India- UK tax treaty than under the Act, the provisions of the said treaty are more beneficial than the provisions of the Act and thus, assessee resorted to the provisions of the said treaty. It was thus asserted by the assessee that under the India-UK tax treaty, the services shall be taxable in India only if such services are technical or consulting in nature and which “make available” the technical knowledge, experience, skill, know-how or processes or consist of development or transfer of a technical plan or design. Technology can be said to have been made available when the person acquiring the service is enabled to apply the technology embedded in the services provided to him. According to the assessee, technical knowledge or skills of the provider should be imparted to and absorbed by the receiver such that the receiver can deploy similar technology or techniques in the future without depending on the provider. Mere fact that provision of the service may require technical input by the person providing the service would not per se mean that technology has been made available. Thus, payment of consideration would be regarded as FTS only if the twin test of rendering services and making technical knowledge, etc., available at the same time is satisfied. In the present case, according to the assessee, services provided by it do not “make available” technical knowledge used by it in providing the technical services to its affiliates, more particularly to the Indian company. 6.2. There is no knowledge sharing but a pure rendition of services as contended by the assessee. Assessee provides private integrated data, voice and video services over BNPP global network system and hence, Printed from counselvise.com 8 IT(IT)A No. 1599/Mum/2025 BNP Paribas Net Ltd. AY 2022-23 there is no knowledge sharing but a pure rendition of services whenever need arises. Assessee has placed on record master service agreements (MSA) in the paper book entered into with India affiliates which are subject matter for the year under consideration. During the year, assessee has provided two types of network connectivity that is WIN connect (WIN data) and backbone (WIN core). WIN data facility allows entities in India to connect to the group network that is backbone facility. In order to provide this service, wherever local connectivity is required, assessee outsources the same to telecommunication service providers that operate locally in India to provide the network connectivity to the group entities in India. The backbone facility allows the assessee to maintain a resilient international telecommunication network which can be used by the entire BNPP group. Stand of the assessee is that provision of telecommunication network service to its group entities is a standard activity undertaken by it and no customized activities are being undertaken and therefore, it cannot qualify as FTS. According to the assessee, Indian affiliates are not at liberty to use the functionality in their own right nor can they apply the services independent of BNPP net. Thus, the services provided by assessee do not “make available” technical knowledge used by it in providing the technical services to the affiliates. There is no knowledge sharing but pure rendition of services. It does not result in “making available” technical knowledge, experience, skill, know-how or processes to India affiliates because such facility does not enable Indian affiliates to apply on their own in future the technical knowledge, skill, know-how or process embedded in such technological facility without recourse to BNPP net. Printed from counselvise.com 9 IT(IT)A No. 1599/Mum/2025 BNP Paribas Net Ltd. AY 2022-23 6.3. Master Service Agreement (MSA) placed on record with its Indian affiliates include that for Sher Khan Ltd, BNP Paribas Securities India Pvt Ltd and BNP Paribas India Solutions Pvt Ltd. The same have been perused. From these MSAs ld. Assessing Officer inferred that since research will be carried out by the assessee to provide options to its India affiliates, the process of carrying out such research will definitely require significant amount of human intervention, technical knowledge, experience and skills. Thus, considering Article 13(4)(c) of the India-UK Tax Treaty, he held that in providing the services under the MSA, assessee has provided research and technical skills to its India affiliates and therefore, the same tantamounts to FTS under India-UK Tax Treaty and hence taxable at 15%. 6.4.. When the matter went before the ld. DRP wherein, assessee made submissions including additional evidences for which remand report was called for from the ld. Assessing Officer and assessee also furnished its rejoinder, after considering all these submissions, ld. DRP also observed that since research will be carried out by the assessee, it cannot be said that assessee was providing standard services. According to it, technical services provided by the assessee were customized to meet specific requirements of individual customers. These services were not generic or routine in nature. According to ld. DRP, services provided involve research and “making available” specialized knowledge and technical skills to the customers. Thus, the entire thrust of both, ld. Assessing Officer and ld. DRP had been on the aspect of research which assessee carried out in order to provide options to its India affiliates. Accordingly, both concludee that the nature of service provided by the assessee falls within the parameters of Article Printed from counselvise.com 10 IT(IT)A No. 1599/Mum/2025 BNP Paribas Net Ltd. AY 2022-23 13(4)(c) of the India-UK tax treaty which tantamounts to FTS, liable to tax at the rate of 15%. 6.5. However, assessee contends that as per clause 5.2 of the MSA, customer issues request for telecommunication services and BNPP Net undertakes research and identify options of telecommunication service providers for the purpose of providing connectivity. Reference was also made to clause 5.7 of the MSA, whereby BNPP Net shall use reasonable skill and care for provisioning of services. Thus, it was submitted that these clauses require only basic research and human involvement for identifying outsourcing options for the customers. Such an exercise of identifying the options for outsourcing cannot be considered as “making available” technical knowledge, experience, skill, know-how or processes and accordingly, would not constitute FTS under the India- UK tax treaty. 6.6. It was asserted that there is no human involvement in the provision of network connectivity services. According to the assessee, mere human intervention to carry out basic research for outsourcing the services cannot be concluded as significant amount of human intervention and technology and therefore, should not be considered as FTS. Further, it was submitted that services rendered are in the nature of mere telecommunication and network connectivity and does not involve usage or access of any platform. The amount received by the assessee is solely for provision of services and there was no right to use of the assessee's equipment by any of its customers. According to the assessee, provision of telecommunication network service to its group entities is a standard activity undertaken by the assessee and no customized activities are undertaken. Printed from counselvise.com 11 IT(IT)A No. 1599/Mum/2025 BNP Paribas Net Ltd. AY 2022-23 6.7. According to the assessee, it had been providing telecom and network connectivity services to its Indian affiliates every year. Hence, the services provided are recurring in nature. Therefore, these services cannot be said to “make available” any technical knowledge as there would have been no need for the recipient of service to avail the services on a recurring basis. It was explained that “make available” means when the technical skills and knowledge of the provider is imparted and absorbed by the receiver such that the receiver can deploy similar technology or techniques in the future without depending on the provider. Hence, the use of a product which embodies technology shall not per se be considered to “make available” the technology. The payment of consideration would be regarded as FTS only if the twin test of rendering technical or consultancy services and “making available” technical knowledge is satisfied at the same time. Accordingly, the services provided by the assessee cannot be construed as FTS under the India-UK Tax Treaty. Merely identifying options for outsourcing cannot be considered as “making available” technical knowledge, experience and skill and know-how. 7. In the context of above discussion, we refer to Article 13 of the India-UK Tax Treaty which is reproduced below: \"For the purposes of paragraph 2 of this Article, and subject to paragraph 5, of this Article, the term \"fees for technical services\" means payments of any kind of any person in consideration for the rendering of any technical or consultancy services (including the provision of services of a technical or other personnel) which a) are ancillary and subsidiary to the application or enjoyment of the right, property or information for which a payment described in paragraph 3(a) of this article is received, or b) are ancillary and subsidiary to the enjoyment of the property for which a payment described in paragraph 3(b) of this Article is received; or Printed from counselvise.com 12 IT(IT)A No. 1599/Mum/2025 BNP Paribas Net Ltd. AY 2022-23 c) make available technical knowledge, experience, skill know-how or processes, or consist of the development and transfer of a technical plan or technical design.\" 7.1. From the above clause (c) of Article 13, it is noted that it requires technical knowledge, experience etc. should be “made available” to the recipient. Thus, the definition of FTS is narrower under the aforesaid Article of the treaty. The services can be brought to tax in India if such services are technical or consulting in nature and which “make available” the technical knowledge, experience, skill, know-how or processes or consist of development or transfer of technical plan or design. The requirement of “make available” in clause (c) construes that technology can be said to have been “made available” when the person acquiring the service is enabled to apply the technology embedded in the services provided to him. 7.2. To understand the term “make available”, we refer to the decision of Hon'ble High Court of Karnataka in the case of De Beers India Minerals Pvt. Ltd. 346 ITR 467 (Kar), which had elaborately interpreted the term “make available” in paragraph 22 of its judgment. The same is reproduced for ready reference. \"22 What is the meaning of \"make available\" The technical or consultancy service rendered should be of such a nature that it \"makes available\" to the recipient. Technical knowledge, know-how and the like, the service should be aimed at and result in transmitting technical knowledge, etc, so that the payer of the service could derive an enduring benefit and utilize the knowledge or know how on his own in future without the aid, of the service provider. In other words, to fit into the terminology 'making available', the technical knowledge, skills, etc. must remain with the person receiving the services even after the particular contract comes to an end. It is not enough that the services offered are the product of intense technological effort and a lot of technical knowledge and experience of the service provider have gone into it. The technical knowledge or skills of the provider should be imparted to and absorbed by the receiver so that the receiver can deploy similar technology or techniques in the future without depending upon the provider. Technology will be considered 'made available' when the person acquiring the service is enabled to apply the technology. The fact that the provision of the service that may require technical knowledge skills, etc. does not mean that technology is made available to the person purchasing the service, within the meaning of paragraph (4)(b). Similarly, the use of a product which Printed from counselvise.com 13 IT(IT)A No. 1599/Mum/2025 BNP Paribas Net Ltd. AY 2022-23 embodies technology shall not per se be considered to make the technology available. In other words, payment of consideration would be regarded as \" fee for technical/included services\" only if the twin test of rendering services and making technical knowledge available at the same time is satisfied.\" 7.3. Essence of the above interpretation points to the requirement of imparting of technical knowledge or skill by the provider to the recipient who is to absorb the said knowledge so that when the person receiving the services is able to use that knowledge even after the particular contract which comes to an end. The essential test is whether the assessee has imparted technical knowledge, skill, experience etc. to its India affiliates so as to render them avail the service of telecom and network connectivity on their own, independent of the MSA, as and when it gets expired or gets terminated. Fact of the matter is that assessee provides telecom connectivity and telecom infrastructure to different entities of BNP Paribas Group worldwide. It engages with third party telecoms, telecom providers around the world by acting as the central procurement vehicle for the group. By using its procurement expertise to manage all the contracts and services, it is able to manage these costs more efficiently through economies of scale. It is also noted that there are no servers involved during the provision of the services. Assessee provides telecom services connecting BNPP India offices to other countries BNPP offices and data centers. Assessee has no employees but instead contracts with external IT companies and BNPP group companies to provide the services to customers and for administrative support. Under the MSA, customer issues request for telecommunication services and assessee undertakes research and identifies options of telecommunication service providers for the purpose of providing connectivity. The research is limited to identification of options of the telecommunication service providers which requires human intervention. Such human intervention is Printed from counselvise.com 14 IT(IT)A No. 1599/Mum/2025 BNP Paribas Net Ltd. AY 2022-23 required to carry out basic research for outsourcing the services. Hence, identifying options for outsourcing cannot be considered as making available technical knowledge, experience and skill or know-how so as to conclude that such services constitute FTS under Article 13 of the India-UK Tax Treaty. 7.4. Clause 5.2 of the MSA suggests that upon the receipt of request from the customer, the assessee has to undertake its research for the purpose of identifying options for the customer. Having identified the options, the same are proposed to the customer together with quotation, which has a limited period validity and the customer has to then take a decision and sign the service order form. Thus, the entire Clause 5 of MSA relating to provision of service suggest that the provider identifies the option for the customer, based on its request and the customer then, takes its decision from the proposal so made and then the services are provided in accordance with the service level agreement. On going through clause 5, it is difficult to discern that there is “make available” condition which gets satisfied resulting into technical skill and knowledge getting imparted to the assessee, who once having absorbed the technical knowledge and skill can deploy similar technology or technique in the future without depending upon the assessee. As already noted, services being provided by the assessee are from year on year basis and recurring in nature. If the India affiliates were “made available” with the technical skill and knowledge in respect of telecommunication services and networking, there would not have been any need of recurring services to be provided by the assessee for year on year basis. Printed from counselvise.com 15 IT(IT)A No. 1599/Mum/2025 BNP Paribas Net Ltd. AY 2022-23 7.5. Significant reliance placed on the research and human intervention aspect of providing of services by the assessee, both by ld. Assessing Officer and ld. DRP are misconstrued since the human intervention is only to carry out basic research for outsourcing the services for the purpose of identification. The research is limited for identification of the options for telecommunication services by way of outsourcing by the assessee. Thus, such an exercise conducted by the assessee for the purpose of identifying options for outsourcing cannot be considered as “making available” technical knowledge, experience, skill and know-how to constitute the services provided by the assessee as FTS within the meaning of Article 13 of the India-UK tax treaty. 7.6. We also refer to the decision of Hon'ble High Court of Madras in the case of Sky Cell Communication Ltd. [2001] 251 ITR 53 (Mad), wherein it is held that standardised service does not qualify as FTS. According to the Hon'ble Court, the provision of telecommunication service to its group entities is a standard activity undertaken by the assessee and no customised activities are being undertaken. Therefore, such activity should not qualify as FTS. 7.7. In the present facts of the case, assessee provides private integrated data, voice and video services over BNPPs global network system and hence there is no knowledge sharing but a pure rendition of services whenever need arises. We further note that assessee is merely a procurement entity providing telecom connectivity and telecom infrastructure to different entities of BNP Paribas Group world wide at a 5% mark up on its cost. It engages with third party telecom providers around the world by acting as the central procurement vehicle for the group. Thus, no case is made out whereby it can be factually held that Printed from counselvise.com 16 IT(IT)A No. 1599/Mum/2025 BNP Paribas Net Ltd. AY 2022-23 assessee makes available technical knowledge, skill and experience to the affiliates to whom it provides its services enabling them to independently avail such services from the assessee. 7.8. We also take note of clause 15 from the MSA which deals with intellectual property rights. From the perusal of the same, it is noted that the intellectual property rights in or arising out of or in connection with the services are either owned by or licensed to the provider. Title or ownership interest in any of the intellectual property rights do not get conveyed to customers nor any rights or licences granted under the agreement to any intellectual property right. Undoubtedly, services rendered by the assessee requires technical inputs but that alone does not bring it in the ambit of fees for technical services taxable under Article 13 of India-UK Tax treaty. 8. Considering the facts on record and detailed discussions made above, in respect of MSA as well as nature of services provided by the assessee, also considering the judicial precedents referred above, we find that the services provided by the assessee do not fall within the meaning of fees for technical services as enunciated in Article 13 of India-UK Tax treaty, so as to bring it to tax in India. Accordingly, addition made by the ld. Assessing Officer treating the receipt in the hands of the assessee as FTS under Article 13 of India-UK Tax treaty is deleted. In the result, ground No.2 raised by the assessee is allowed. 8.1 Ground No.3 is without prejudice ground and is in alternate to ground No.2. Since ground No.2 has been already allowed by us, ground No.3 is rendered infructuous. Ground No.4 and 5 are in respect of levy of interest u/s. 234B which are consequential in nature, hence ld. Printed from counselvise.com 17 IT(IT)A No. 1599/Mum/2025 BNP Paribas Net Ltd. AY 2022-23 Assessing Officer is directed to re-compute the interest, if applicable, based on the order giving effect of this appeal. Ground No.6 relates to incorrect amount of refund issued to the assessee. In this respect, it is a matter of verification at the end of ld. Assessing Officer. Accordingly, ld. Assessing Officer is directed to verify the claim of the assessee and grant the same based on the outcome of verification. Ground No.7 is premature and therefore not dealt with. 9. In the result, appeal of the assessee is allowed. Order is pronounced in the open court on 17th November, 2025 Sd/- Sd/- (Saktijit Dey) (Girish Agrawal) Vice President Accountant Member Dated: 17th November, 2025 MP, Sr.P.S. Copy to : 1 The Appellant 2 The Respondent 3 DR, ITAT, Mumbai 4 5 Guard File CIT BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai Printed from counselvise.com "