Vedanta Netherlands Investments B V V. Deputy Commissioner of Income Tax & ANR.

W.P.(C)/10907/2022

AI Insights

The case involves Vedanta Netherlands Investments B V, a non-resident company from the Netherlands, challenging an order and certificate issued by the Income Tax Department of India. The petitioner sought a lower withholding tax rate of 5% on estimated dividend income from Vedanta Limited, based on the India-Netherlands Double Tax Avoidance Agreement. Initially, the Income Tax Department issued a certificate for a 20% withholding tax rate, which led to the filing of this writ petition. However, due to the developments in a connected case, where the main assessment and penalties were addressed, the court found the current petition to be infructuous.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 822401 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 09-12-2025
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, India-Netherlands Double Tax Avoidance Agreement
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: GIBRAN NAUSHAD; ANANT MANN
• Assessee Lawyers: AJAY VOHRA; HIMANSHU AGGARWAL
• Keywords: Dividend income; Double Tax Avoidance Agreement; Tax residency; Withholding Tax; General Anti-Avoidance Rules
• Section: 197(1)

Judgement Text

"W.P.(C) 10907/2022 & connected matter Page 1 of 3 $~21 & 38 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 10907/2022 VEDANTA NETHERLANDS INVESTMENTS B V .....Petitioner Through: Mr. Ajay Vohra, Sr. Adv. with Mr. Himanshu Aggarwal, Adv. versus DEPUTY COMMISSIONER OF INCOME TAX & ANR. .....Respondents Through: Mr. Gibran Naushad, SSC. AND + W.P.(C) 12256/2025 & CM APPL. 49952/2025 VEDANTA NETHERLANDS INVESTMENTS BV .....Petitioner Through: Mr. Ajay Vohra, Sr. Adv. with Mr. Himanshu Aggarwal, Adv. versus DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 3(1)(1) & ANR. .....Respondents Through: Mr. Anant Mann, Adv. CORAM: JUSTICE PRATHIBA M. SINGH JUSTICE SHAIL JAIN O R D E R % 09.12.2025 1. This hearing has been done through hybrid mode. W.P.(C) 10907/2022 2. The challenge in this petition was for, inter alia, quashing of the impugned order dated 17th June, 2022 and the certificate dated 16th June, 2022 passed by the Income Tax Department. The further prayer is for issuance of the certificate with a lower withholding tax at the rate of 5% on the estimated dividend income from M/s. Vedanta Limited. 3. The Petitioner had sought the said certificate on the ground that it is a non-resident company incorporated in the Netherlands and is a tax resident of 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 12/12/2025 at 13:45:45 Printed from counselvise.com W.P.(C) 10907/2022 & connected matter Page 2 of 3 the Netherlands holding a valid tax residency certificate. It claims to have no place of business or office in India, or any permanent establishment in India. 4. The brief background of the case is that in terms of the India- Netherlands Double Tax Avoidance Agreement (hereinafter “DTAA”) the Petitioner had made investment into M/s. Vedanta Limited, an Indian company, through which it was estimated that the Petitioner could receive some dividend income to the tune of approximately Rs 343 crores. On the said basis the Petitioner had projected the computation of income tax to include the said dividend income. The documents etc., were all filed and queries which were also sought by the Income Tax Department were duly replied. 5. However, the impugned order dated 17th June, 2022 was passed rejecting the Petitioner’s application for issuance of the certificate of 5% rate of withholding tax on the estimated dividend income. On the contrary, a certificate dated 16th June, 2022 directing M/s. Vedanta Limited to deduct tax at 20% was issued. 6. It was this order and certificate that was under challenge. The prayer in this writ petition is as under: “(A) a writ in the nature of certiorari, mandamus or any other appropriate writ for quashing of the impugned order dated 17.06.2022 and certificate dated 16.06.2022 passed / issued by Respondent No.1 under section 197(1) of the Income Tax Act, 1961 (‘the Act’) and; (B) a writ in the nature of certiorari, mandamus or any other appropriate writ or an order directing Respondent No.1 to issue certificate with the lower withholding rate of 5% in favour of the Petitioner for financial year 2022- 23;” 7. In this petition, on 31st October, 2022 notice was issued in this matter, and thereafter the matter had remained pending. In the meantime, the Income 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 12/12/2025 at 13:45:45 Printed from counselvise.com W.P.(C) 10907/2022 & connected matter Page 3 of 3 Tax Department had made a reference to the Approving Panel under the General Anti-Avoidance Rules (hereinafter “GAAR Panel”) which gave its directions on 31st March, 2025 after which assessments were framed on 8th May, 2025. After framing of the assessment, a penalty has also been imposed on the Petitioner. 8. The direction of the GAAR Panel and the subsequent assessment and penalty are the subject matter of W.P.(C)12256/2025. In view of the subsequent events which have taken place, the present petition would be infructuous as the challenge has already been mounted to the main assessment order and the penalty in the second writ petition. 9. Accordingly, the present writ petition is disposed of as infructuous. 10. All arguments and contentions on merit are left open. W.P.(C) 12256/2025 & CM APPL. 49952/2025 11. Let a counter affidavit be filed by the Income Tax Department within a period of four weeks as requested. 12. Let rejoinder be filed within 4 weeks, thereafter. 13. Let the scanned record of W.P.(C)10907/2022 be tagged with the present petition and shall be sent along with W.P.(C) 12256/2025 on the next date. 14. Interim order granted on 25th August 2025 shall continue till the next date of hearing. 15. List on 5th May, 2026. PRATHIBA M. SINGH, J. SHAIL JAIN, J. DECEMBER 9, 2025/Rahul/msh 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 12/12/2025 at 13:45:45 Printed from counselvise.com "