IBM Philippines not liable for TDS under I-T Act, says Karnataka HC

The High Court of Karnataka has ruled that IBM Philippines “shall not be liable for TDS under Section 195 of the Income Tax Act.”

It has therefore dismissed four appeals filed by the IT Department against IBM India Private Limited.

The appeals were in relation to four different assessment years starting from 2008-09. All the four appeals were filed in 2014 and were disposed of on January 16, 2023.

IBM USA had a global arrangement with Procter and Gamble, USA for rendering payroll related services.

In a companion agreement, IBM India entered into a pact with P&G India. IBM India outsourced this work as well as some human resource services to IBM Philippines.