HC Directs NIL TDS Certificate for British Airways Under DTAA

Case Details: British Airways PLC vs. Assistant Commissioner of Income-tax, (Int. Tax) [2026] 184 taxmann.com 3 (Delhi)

Judiciary and Counsel Details

• Dinesh Mehta & Vinod Kumar, JJ.
• Vishal Kalra, Anil Kumar & S.S. Tomar, Advs. for the Petitioner.
• Anurag Ojha, SSC for the Respondent.

Facts of the Case

The petitioner, British Airways PLC, was a company and a tax resident of the United Kingdom. The disputed services fall under Airline services, which are essentially “Operation of Airline & Cargo Service”. The petitioner was operating in India under a Tax Residency Certificate issued by the UK authorities. The petitioner’s income was exempt under Article 8 of the India-UK Double Taxation Avoidance Agreement (DTAA), read with Section 90 of the Income Tax Act.

The petitioner applied for a certificate under Section 197 of the Income Tax Act from the competent authority. The application was made for the transactions, which amounted to roughly Rs. 3.98 crores. Surprisingly, a certificate at 0.1% has been issued to it, even though a NIL rate certificate was issued for the earlier part of the current Financial Year (2025-26).

Aggrieved by the order, the petitioner filed a writ petition to the Delhi High Court.

High Court Held

The High Court held that the main reason for issuing the certificate at 0.1% was the fact that there were outstanding demands for assessment years 2013-14, 2014-15, 2015-16 and 2016-17, as per the ITBA portal, which turned out to be incorrect. It was to be noted that the petitioner’s assessment had been made, and so far as airline services are concerned, no tax was payable.

Further, it was noted that a certificate at NIL rate had been issued for the last fifteen-sixteen years, and even for part of the current financial year, a certificate at 0.1% cannot be countenanced. It reflected the non-application of mind by the competent authority on the one hand, showed an inconsistent approach by the officers of the country, and thus portrayed an unhealthy picture of the bureaucracy.

Accordingly, the writ petition was allowed, and the impugned order and certificate were set aside. The competent authority was directed to issue a certificate at a NIL rate.