THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -1 vs. GE ENGINE SERVICE-TRI REMANUFACTURING INC

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ITA/1164/2018HC DelhiDLHC01071994201826 October 2018Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI2 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court disposed of the appeal in terms of the parties' agreement. The Court noted that the question raised by the Revenue concerning the levy of interest under Section 234B of the Income Tax Act, 1961, was covered against them by the High Court's own judgment in 'Director of Income Tax (International Taxation) vs. GE Packaged Power Inc.' (2015) 373 ITR 65 (Delhi). The Court was informed that an appeal against this decision was pending before the Supreme Court, and the ruling of the Supreme Court would apply to the present appeal. The Court recorded this understanding and disposed of the appeal. The operative direction was to treat the appeal as disposed of, with liberty to the parties to file an application if any difficulty arose after the Supreme Court's decision. No specific issue was left undecided; the appeal was disposed of based on the pending Supreme Court decision.

What were the facts?

The Commissioner of Income Tax - International Taxation -1 (the Revenue) filed an appeal before the Delhi High Court against an order concerning GE Engine Service-Tri Remanufacturing Inc (the Assessee). The appeal pertains to the assessment year(s) not explicitly stated in the judgment. The core issue is the levy of interest under Section 234B of the Income Tax Act, 1961. The Revenue sought to dispose of the present appeal in terms of a previous order in ITA No. 661/2018, citing Sections 158A and 158AA of the Act, though acknowledging their non-strict applicability. The Revenue's contention is that the issue of interest under Section 234B is covered by a High Court judgment against them, which is now pending appeal before the Supreme Court.

What were the issues?

1. Whether the levy of interest under Section 234B of the Income Tax Act, 1961, is sustainable, considering the High Court's prior ruling in 'Director of Income Tax (International Taxation) vs. GE Packaged Power Inc.' (2015) 373 ITR 65 (Delhi). Assessee's Contention: The Assessee relies on the Delhi High Court's judgment in 'Director of Income Tax (International Taxation) vs. GE Packaged Power Inc.' (2015) 373 ITR 65 (Delhi), which ruled against the Revenue on the issue of interest under Section 234B. The Assessee's position is that this ruling covers the present appeal. Revenue's Contention: The Revenue acknowledges that the issue is covered against them by the aforementioned High Court judgment. They state that an appeal against this decision is pending before the Supreme Court, and the ruling of the Supreme Court would apply to the present appeal. The Revenue also proposed disposing of the appeal in terms of a previous order in ITA No. 661/2018, citing Sections 158A and 158AA of the Income Tax Act, 1961, though noting their non-strict applicability.

Which sections of the Income-tax Act were involved?

Section 234B,Section 158A,Section 158AA

AI-generated summary — verify with the full judgment below

$~23 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 1164/2018 & CM APP No. 44517/2018 THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -1 ..... Appellant Through: Mr.Ruchir Bhatia, Adv. versus GE ENGINE SERVICE-TRI REMANUFACTURING INC ..... Respondent Through: Mr.Sachit Jolly, Adv. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI O R D E R % 26.10.2018 CM APP No.44516/2018 Allowed, subject to all just exceptions. The application stands disposed of. ITA 1164/2018 Counsel for the parties state that the present appeal may be disposed of in terms of the order dated 01.06.2018 passed in ITA No. 661/2018, The Pr. Commissioner of Income Tax-1 (International Taxation) vs. General Electric Power Systems INC. It is stated that this would be in consonance with Sections 158A and 158AA of the Income Tax Act, 1961, though these provisions are not strictly applicable. 2. The question raised by the Revenue in these appeals relates to levy of interest under Section 234B of the Income Tax Act, 1961 which issue is

covered against them vide the judgment of this Court in ‘Director of Income Tax (International Taxation) vs. GE Packaged Power Inc.’, (2015) 373 ITR 65 (Delhi). 3. The appeal against the said decision is pending before the Supreme Court as special leave to appeal has been granted. 4. Counsel for the parties state that the ruling by the Supreme Court would equally apply to the present appeal. Recording the above, this appeal is disposed of. 5. In case of any difficulty, it will be open to the parties to file an application in this appeal after the decision of the Supreme Court. 6. The appeal for the purpose of registry would be treated as disposed of. SANJIV KHANNA, J. ANUP JAIRAM BHAMBHANI, J. OCTOBER 26, 2018 neelam

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