THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -1 vs. GE AVIATION SERVICE OPERATION LLP

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ITA/1357/2018HC DelhiDLHC01071626201830 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 by stating that the issue concerning the levy of interest under Section 234B of the Income Tax Act, 1961, is covered by its own previous judgment in Director of Income Tax (International Taxation) vs. GE Packaged Power Inc. (2015). The Court noted that a Special Leave Petition against this precedent is pending before the Supreme Court and that the Supreme Court's decision would be binding on the present appeal. Consequently, the appeal was disposed of with a direction that if any difficulty arises after the Supreme Court's decision, parties can file an application in this appeal. The ratio decidendi is that appeals involving issues pending before the Supreme Court should be disposed of in line with the established practice, awaiting the apex court's final verdict, especially when a clear precedent exists at the High Court level.

What were the facts?

This case involves an appeal by the Commissioner of Income Tax - International Taxation -1 (the Revenue) against an order concerning GE Aviation Service Operation LLP (the assessee). The appeal pertains to the assessment year(s) not explicitly stated but implied to be covered by the cited precedents. The core issue revolves around the levy of interest under Section 234B of the Income Tax Act, 1961. The procedural history indicates that the parties agreed 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 appeal is based on a question of law already decided against them by the Delhi High Court in Director of Income Tax (International Taxation) vs. GE Packaged Power Inc. (2015). A Special Leave Petition against this decision is pending 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. The Revenue contended that the issue of levy of interest under Section 234B is covered against them by the judgment of the Delhi High Court in Director of Income Tax (International Taxation) vs. GE Packaged Power Inc., (2015) 373 ITR 65 (Delhi). They acknowledged that a Special Leave Petition against this decision is pending before the Supreme Court and that the ruling of the Supreme Court would apply to the present appeal. The assessee's specific arguments are not recorded, but the agreement to dispose of the appeal based on the precedent suggests they would rely on the High Court's ruling.

Which sections of the Income-tax Act were involved?

Section 234B,Section 158A,Section 158AA

AI-generated summary — verify with the full judgment below

$~33 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 1357/2018 THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -1 ..... Appellant Through: Mr. Ruchir Bhatia, Adv. versus GE AVIATION SERVICE OPERATION LLP ..... 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. 50075/2018 (exemption) Allowed subject to all just exceptions. CM APPL. 50076/2018 (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 1357/2018 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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