The Indian Supreme Court has ruled that a Double Taxation Avoidance Agreement (DTAA)
cannot be enforced by any court, authority or tribunal until it has been notified by the Central
Government as defined by the Income Tax Act’s Section 90. The DTAA treaty will not be
enforceable per se in Indian courts until the Government of India issues a notification as per
Section 90. The Income Tax Department had filed a batch of appeals against the judgments of
the Delhi High Court, which were allowed by a bench comprising Justices S Ravindra Bhat and
During the judgment, Justice Ravindra Bhat stated that they had considered arguments related to
Section 90’s requirement, India’s treaty practice, the treaty practice of other countries, and
international treaty practice, especially Article 31 (3)(b). They concluded that treaty practice is
not bilateral; it can be unilateral, and as long as India issues the notification, the courts are
bound. Until then, the treaty is not enforceable per se in Indian courts. Justice Bhat stated that the
following are the conclusions in the judgment:
A Notification under Section 90 of the Income Tax Act is a necessary and mandatory condition
for a court, authority or tribunal to give effect to a Double Taxation Avoidance Agreement or
any protocol changing its terms and conditions that alter the existing provisions of law.
A stipulation in a DTAA or protocol with one nation does not automatically lead to integration
of such term extending the same benefit in regard to a matter covered in the DTAA of the first
nation which enters into DTAA with India. In such an event, the terms of the earlier DTAA
required to be amended through a separate notification under Section 90.
The Supreme Court set aside the judgment delivered by the Delhi High Court in Concentrix
Services Netherlands BV v/s Income Tax Officer TDS & Anr on 22.04.2021 and the subsequent
judgments that followed Concentrix Services in Assessing Officer Circle (International Taxation)
New Delhi v. M/s Nestle SA.
Written by N.Yogendra Mani of KL University Vijayawada Andhra Pradesh ( 5th semester) an intern under Legal Vidhiya