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

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ITA/1168/2018HC DelhiDLHC01071911201826 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 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.'. The Court noted that the question raised by the Revenue regarding 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 further acknowledged that an appeal against this decision was pending before the Supreme Court and that the Supreme Court's ruling would equally apply to the present appeal. The appeal was disposed of with the understanding that if any difficulty arose after the Supreme Court's decision, parties could file an application. The operative direction was to treat the appeal as disposed of.

What were the facts?

The Commissioner of Income Tax (International Taxation)-1 (Revenue) filed an appeal before the Delhi High Court against an order concerning GE Engine Service-Tri Remanufacturing Inc (Assessee). The appeal pertains to the assessment year(s) not specified in the judgment. The core issue revolves around the levy of interest under Section 234B of the Income Tax Act, 1961. The Revenue stated that the present appeal could be disposed of 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 further acknowledged that the issue of interest under Section 234B was decided against them in 'Director of Income Tax (International Taxation) vs. GE Packaged Power Inc.', a decision currently under 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 in the facts and circumstances of the case? Assessee's contentions: The assessee relies on the Delhi High Court's decision in 'Director of Income Tax (International Taxation) vs. GE Packaged Power Inc.' (2015) 373 ITR 65 (Delhi), which held against the Revenue on the issue of interest under Section 234B. The assessee's appeal is to be decided in consonance with this ruling. Revenue's contentions: The Revenue acknowledges that the issue is covered against them by the Delhi High Court's decision in 'Director of Income Tax (International Taxation) vs. GE Packaged Power Inc.'. They also state that the present appeal may be disposed of in terms of a previous order in ITA No. 661/2018, citing Sections 158A and 158AA of the Income Tax Act, 1961, though not strictly applicable. The Revenue notes that an appeal against the 'GE Packaged Power Inc.' decision is pending before the Supreme Court, and the ruling of the Supreme Court would apply to the present appeal.

Which sections of the Income-tax Act were involved?

Section 234B,Section 158A,Section 158AA

AI-generated summary — verify with the full judgment below

$~27 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 1168/2018 & CM APP No. 44572/2018 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.44571/2018 Allowed, subject to all just exceptions. The application stands disposed of. ITA 1168/2018 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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