MIXPANEL INC V. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE INTERNATIONAL TAX 221 NEW DELH

W.P.(C)/17569/2025

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The case involves Mixpanel Inc., a company registered in the United States, which contested the rejection of their application for a zero tax certificate under Section 197 of the Income Tax Act, 1961. The rejection was based on the non-acceptance of previous ITAT orders by the Income Tax Department, which ruled that the services provided by Mixpanel do not fall under 'Fee for Technical Services'. The petitioner argued that the Department's refusal to issue a zero tax certificate was contrary to law and amounted to contempt of court, as it disregarded the ITAT's decisions. The respondent countered that appeals were pending before the Supreme Court for some ITAT decisions, which could potentially alter the situation. However, the High Court found the respondent's apprehension about the irreversibility of the situation if the ITAT's orders were accepted and the appeals were allowed, to be untenable. The court emphasized that the ITAT's orders, being the final fact-finding authority, must be followed by the Jurisdictional Assessing Authorities regardless of the status of appeals.

• Counselvise Citation: [] 140 COUNSELVISE.COM (IT) 828007 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 06-01-2026
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ABHISHEK MARATHA; APOORV AGARWAL; PARTH SAMWAL; NUPUR SHARMA; GAURAV SINGH; BHANUKARAN JODHA; MUSKAAN GOEL; HIMANSHU GAUR; NISCHAY PUROHIT
• Assessee Lawyers: KAMAL SAWHNEY; NISHANK VAHISTHA
• Keywords: Fee for Technical Services; Income tax appellate tribunal; Section 197; Zero tax certificate; Impugned certificate
• Section: 197

Judgement Text

"$~20 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 17569/2025 CM APPL. 72559/2025 MIXPANEL INC .....Petitioner Through: Mr. Kamal Sawhney and Mr. Nishank Vahistha, Advs. versus DEPUTY COMMISSIONER OF INCOME TAX CIRCLE INTERNATIONAL TAX 221 NEW DELH .....Respondent Through: Mr. Abhishek Maratha, Sr. Standing Counsel, Mr. Apoorv Agarwal, Mr. Parth Samwal, Jr. SCs, Ms Nupur Sharma, Mr. Gaurav Singh, Mr. Bhanukaran Singh Jodha, Ms Muskaan Goel, Mr. Himanshu Gaur and Mr. Nischay Purohit Advs. CORAM: HON'BLE MR. JUSTICE DINESH MEHTA HON'BLE MR. JUSTICE VINOD KUMAR % 06.01.2026 O R D E R 1. Learned counsel for petitioner invited court’s attention towards the certificate dated 17.10.2025 (hereinafter referred to as ‘impugned certificate’), respondent has passed pursuant to the petitioner’s application under Section 197 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act of 1961’) and submitted that the sole reason given while rejecting petition’s application under Section 197 is that the Department has not This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 12/01/2026 at 12:42:53 Printed from counselvise.com accepted the orders dated 25.07.2024, 25.09.2024 and 21.05.2025 passed by the Income Tax Appellate Tribunal (hereinafter referred to as ‘ITAT’) for Assessment Years (hereinafter referred to as ‘AY’) 2018-19, 2021-22 and 2022-23. 2. Learned counsel for the petitioner submitted that once the final fact finding authority under the Act of 1961 has held the facts and legal issue in petitioner’s favour, clearly ruling that the services provided by the petitioner do not fall within the ambit ‘Fee for Technical Services’, no tax under the Act of 1961 is payable by the petitioner company, which is registered in United States. And therefore, the petitioner is entitled to get a certificate of zero tax under the Act of 1961. Learned counsel for petitioner argued that the approach of the respondent is contrary to law and as a matter of fact, amounts to contempt of court as the respondent has not followed, rather flouted the orders passed by the ITAT. 3. Mr. Abhishek Maratha, SSC for the respondent on the other hand submitted that out of the three orders referred hereinabove, passed by the ITAT, the department has filed two SLPs before Hon’ble the Supreme Court for AYs 2021-22 and 2022-23 and since the tax effect in the appeal for AY 2018-19 was less than the permissible limit, no appeal was filed against the same. He added that in case the appeals filed by the Department are allowed (in which notice has been issued), the situation would be irreversible and the respondent company will take a plea that since the Department has accepted the order passed by the ITAT, the appeals be disposed of as such. 4. Heard learned counsel for the parties. 5. We are of the view that the apprehension expressed by the Mr. Maratha is untenable in law. Simply because the Department follows the This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 12/01/2026 at 12:42:53 Printed from counselvise.com order passed by the ITAT, which order is otherwise binding on it, the plea that since the Department has issued the certificate and accepted the orders, the appeal should not be heard and decided on merit is misconceived. According to us, the orders of the ITAT being the final fact finding authority under the Act of 1961 are required to be followed by the Jurisdictional Assessing Authorities, regardless of the fact whether an appeal has been preferred or not. 6. That apart, only notice has been issued in the subject appeals and even substantial question of law has not been framed. As a matter of fact, no stay application has been filed by the department and the orders of the ITAT are existing and subsisting. 7. The present writ petition is therefore allowed. The impugned certificate dated 17.10.2025 requiring to deduct tax at 15% is hereby quashed and set aside. 8. In order to meet the ends of justice, the respondent is directed to issue a fresh certificate to the petitioner requiring deduction of tax at the rate of 2% in place of 15%. 9. The respondent shall continue to issue TDS certificate at such rate (2%) for the subsequent assessment years i.e. AY 2026-27 and onwards as well until the orders of the ITAT are reversed or otherwise modified by the High Court or any other change in relation to the services provided by the petitioner company takes place. 10. Needless to observe that on furnishing the Income Tax Return (ITR) by the petitioner company, the Assessing Officer shall be free to pass assessment order as per his own wisdom, against which the right of the petitioner to file statutory appeal shall stand reserved. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 12/01/2026 at 12:42:53 Printed from counselvise.com 11. The fresh certificate be issued within a period of four weeks’. 12. List on 08.04.2026. DINESH MEHTA, J VINOD KUMAR, J JANUARY 6, 2026/dd This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 12/01/2026 at 12:42:53 Printed from counselvise.com "