Does Distribution rights be treated as Royalty

This ruling underscore a fundamental principle in tax jurisprudence: correctness of tax liability overrides procedural lapses. The Tribunal rejected the CIT(A)’s refusal to entertain a delayed claim, emphasizing that there is no estoppel in tax law and that appellate authorities are duty-bound to consider legitimate claims even if raised for the first time. 

By invoking the CBDT’s long-standing principle that only lawful tax should be collected, the Tribunal shifted the focus from procedural compliance to substantive justice. While it refrained from ruling on the royalty characterisation itself, the remand ensures that treaty interpretation will now be tested on merits, making this decision particularly relevant in international tax disputes involving evolving jurisprudence.