MONGODB LIMITED,IRELAND V. ASSISTANT COMMISSIONER OF INCOME TAX, CIVIC CENTER

SA 99/DEL/2026

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MongoDB Ltd., a tax resident of Ireland, filed an application seeking a stay on the recovery of an outstanding demand for the Assessment Year 2023-24. The demand arose from the Assessing Officer's classification of subscription revenue from MongoDB Atlas as 'royalty', which is taxable under the Income Tax Act, 1961. The assessee argued that the revenue should be exempt under the India-Ireland Double Tax Avoidance Agreement (DTTA) and cited a favorable ruling from the Delhi High Court. The department opposed the stay, emphasizing the specialized nature of the software provided by the assessee. The Tribunal, after considering the arguments and the payment of the equalization levy, decided to grant the stay.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 838670 (ITAT-DELHI)
• Duration Of Justice: 3 day(s)
• Appeal Type: Stay Application
• Pronouncement Date: 20-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2023-2024
• Appeal Filed On: 17-02-2026
• Other Referred Cases: Honble Delhi High Court
• Laws Referred To: Income Tax Act, 1961, India-Ireland Double Tax Avoidance Agreement
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SINGH SHARMA
• Keywords: Reasonable cause; Application of stay
• Section: 2

Judgement Text

" आयकर अपीलीय अधिकरण धिल्ली पीठ “डी”, धिल्ली श्री धिकास अिस्थी, न्याधयक सिस्य एिं श्री मनीष अग्रिाल, लेखाकार सिस्य क े समक्ष IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “D”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI MANISH AGARWAL, ACCOUNTANT MEMBER SA No. 99/Del/2026 (Arising out of IT(IT)A No. 49/Del/2026, A.Y 2023-24) MongoDB Ltd., Number One Building Two, Ballsbridge, Dublin, 999999 PAN: AAACZ-7071-R ...... आवेदक/Applicant बनाम Vs. Assistant Commissioner of Income Tax, E-2, Block, Third Floor, Civic Centre, New Delhi 110002 ..... प्रधििािी/Respondent आवेदक/Applicant by : S/Shri Manuj Sabharwal, D. Tiwari, D. Negi & Manish Kumar, Advocates प्रधििािीद्वारा/Respondent by : Shri Vikram Singh Sharma, Sr. DR सुनिाई की धिधि/ Date of hearing : 20/02/2026 घोषणा की धिधि/ Date of pronouncement : 20/02/2026 आिेश/ORDER PER VIKAS AWASTHY, JM: This application has been filed by the assessee seeking stay on recovery of outstanding demand for AY 2023-24. 2. Shri Manuj Sabharwal, appearing on behalf of the assessee submits that the assessee is a tax resident of Ireland and is eligible to claim benefit of India-Ireland Double Tax Avoidance Agreement (DTTA). During the period relevant to assessment year under appeal, the assessee has earned revenue from subscription of software MongoDB Atlas Printed from counselvise.com 2 SA No.99/DEL/2026 Rs.71,33,49,199/- and claimed the same as exempt u/s.10(50) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). The Assessing Officer (AO) held the said subscription received by the assessee as ‘royalty’. He further submitted that the said issue is squarely covered in favour of the assessee by the order of Hon’ble Delhi High Court. The ld. Counsel submits, dehors the above submissions the assessee has already paid equalization levy of 2%. Hence, the assessee has paid nearly 20% of total outstanding demand. Therefore, the recovery of balance amount may be stayed. 3. Per contra, Shri Vikram Singh Sharma, representing the department strongly opposed the Stay Application. The ld. DR referring to para 6.2 of the assessment order submits that the assessee is not simplicitor providing any software, the assessee is selling specialized software which provides automated provisioning and healing, comprehensive system monitoring, manage back and restores, default security and performance optimization, etc. Therefore, the subscription amount received by the assessee was held as royalty by the AO. 4. Both sides heard. Considering relevant facts necessary for extending the benefit of stay and keeping in view the fact that the assessee has already paid equalization levy of 2% (copy of challan receipt and form no. 2 furnished by the assessee), we are of the view that the benefit stay on recovery of outstanding demand should be allowed to the assessee. The recovery of outstanding demand for AY 2023-24 is stayed for a period of 180 days from the date of this order or till the disposal of appeal, whichever is earlier. 5. The Registry is directed to list the appeal for hearing on 06.05.2026. Since, the date of hearing of appeal has been announced in the open court in presence of both sides, issuance of separate notice of hearing to the parties is dispensed with. Printed from counselvise.com 3 SA No.99/DEL/2026 6. The assessee shall furnish paper book, if any on or before the date of hearing of appeal, with an advance copy to opposite side in accordance with ITAT Rules. 7. The assessee shall not seek adjournment on the date fixed for hearing, without their being any reasonable cause. 8. In the result, Stay Application of the assessee is allowed in the terms aforesaid. Order pronounced in the open court on Friday the 20th day of February, 2026. Sd/- Sd/- (MANISH AGARWAL) (VIKAS AWASTHY) लेखाकार सदस्य/ACCOUNTANT MEMBER न्यायिक सदस्य/JUDICIAL MEMBER धिल्ली / Delhi, धिनांक/Dated 20/02/2026 NV/- प्रतिलिपि अग्रेपििCopy of the Order forwarded to : 1. अपीलािी/The Appellant , 2. प्रधििािी/ The Respondent. 3. The PCIT/CIT(A) 4. धिभागीय प्रधिधनधि, आय.अपी.अधि., यदल्ली /DR, ITAT, धिल्ली 5. गाडड फाइल/Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, DELHI Printed from counselvise.com "