Non-Resident Company Need Not Have Permanent Office In India To Be Taxed On Income Accruing Here: Supreme Court

The Supreme Court ruled that a non-resident company can be taxed in India for income accruing or arising here, even if it has no permanent office in the country. The bench clarified that under Sections 4, 5(2), and 9(1)(i) of the Income Tax Act, 1961, tax liability depends on the location of accrual and not on the taxpayer’s physical presence. Upholding the tax department’s appeal, the Court held that the foreign company’s contractual and operational links with Indian entities constituted a “business connection. ” The ruling strengthens India’s jurisdiction over cross-border income under domestic law and tax treaties.