Delhi ITAT Rejects The "Back-Office = PE" Equation

In the case of Concentrix CVG Customer Management Group, Inc. v. Deputy Commissioner of Income Tax (ITA No. 7727/Del/2017 & Ors., order dated September 30, 2025), the Income Tax Appellate Tribunal, Delhi (the "Delhi ITAT"), ruled that Concentrix CVG Customer Management Group, Inc. ("CVG"), a US tax resident, did not have permanent establishment ("PE") in India under Article 5 of the India-US double taxation avoidance agreement. This is a favourable ruling for US companies operating call centres, global capability centres, and back‑office operations in India through an Indian subsidiary.

Background

CVG, a US tax resident, provides outsourced customer and marketing support services, and comprehensive customer management services, to its US clients. Its Indian subsidiary, Convergys India Services Private Limited ("CIS"), provided IT-enabled call centre and back-office support services to CVG under a subcontracting arrangement on a cost-plus basis (with a service