THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -1 vs. GE JENBACHER GMBH & CO. OHG

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ITA/1352/2018HC DelhiDLHC01071713201830 November 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 its prior order in ITA No. 661/2018, which was in consonance with the judgment in Director of Income Tax (International Taxation) vs. GE Packaged Power Inc. (2015) 373 ITR 65 (Delhi). This judgment addressed the levy of interest under Section 234B of the Income Tax Act, 1961, and was decided against the Revenue. The Court noted that an appeal against this decision was pending before the Supreme Court. The High Court held that the ruling by the Supreme Court would equally apply to the present appeal. Consequently, the appeal was disposed of with a liberty to the parties to file an application after the Supreme Court's decision in case of any difficulty. No specific finding was recorded on the merits of the present appeal, as it was disposed of based on the understanding that the Supreme Court's decision would be binding.

What were the facts?

This matter concerns an appeal filed by the Commissioner of Income Tax - International Taxation -1 (the Revenue) against GE Jenbacher GmbH & Co. OHG (the assessee). The appeal challenges an order related to the assessment year(s) not explicitly stated. The core issue revolves around the levy of interest under Section 234B of the Income Tax Act, 1961. The parties agreed to dispose of the present appeal in terms of a prior order of the High Court in ITA No. 661/2018, citing Sections 158A and 158AA of the Act, though acknowledging their non-strict applicability. The Revenue's contention is covered by a previous Delhi High Court judgment in Director of Income Tax (International Taxation) vs. GE Packaged Power Inc., which is 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 contention: 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 Section 234B interest. The assessee's counsel stated that the ruling in this precedent would equally apply to the present appeal. Revenue's contention: The Revenue's position on the levy of interest under Section 234B is covered by the aforementioned judgment, against which a special leave to appeal has been granted by the Supreme Court. The Revenue implicitly accepts that the current appeal would be decided based on the outcome of the Supreme Court's decision.

Which sections of the Income-tax Act were involved?

Section 234B,Section 158A,Section 158AA

AI-generated summary — verify with the full judgment below

$~28 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 1352/2018 THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -1 ..... Appellant Through: Mr. Ruchir Bhatia, Adv. versus GE JENBACHER GMBH & CO. OHG ..... Respondent Through: Mr. Sachin Jolly, Adv. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI O R D E R % 30.11.2018 CM APPL. 50065/2018 (exemption) Allowed subject to all just exceptions. CM APPL. 50066/2018 (delay in re-filing) Delay in re-filing is not opposed by the respondent-assessee. Accordingly, the application for condonation of delay is allowed. ITA 1352/2018 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. 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, the 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. SANJIV KHANNA, J. ANUP JAIRAM BHAMBHANI, J. NOVEMBER 30, 2018/uj

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