THE PR.COMMISSIONER OF INCOME TAX -1 (INTERNATIONAL TAXATION) vs. GE ENGINE SERVICES MALAYSIA SDN BDH

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ITA/1361/2018HC DelhiDLHC01072123201830 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 of levy of interest under Section 234B of the Income Tax Act, 1961, is covered against the Revenue by their own judgment in Director of Income Tax (International Taxation) vs. GE Packaged Power Inc., (2015) 373 ITR 65 (Delhi). The Court noted that an appeal against this decision is pending before the Supreme Court. The parties agreed that the ruling by the Supreme Court would apply to the present appeal. Consequently, the appeal was disposed of in terms of the order passed in ITA No. 661/2018. The operative direction is that the appeal is disposed of, with liberty to the parties to file an application in this appeal after the decision of the Supreme Court if any difficulty arises. No specific issue was left undecided, as the appeal was disposed of based on the pending Supreme Court decision.

What were the facts?

The appeal was filed by the Pr. Commissioner of Income Tax -1 (International Taxation) against GE Engine Services Malaysia Sdn Bhd. The appeal concerns the assessment year(s) not explicitly stated in the provided text. The order or action under challenge is the levy of interest under Section 234B of the Income Tax Act, 1961. The appeal was filed with a delay in re-filing, which was condoned. The parties agreed to dispose of the present appeal in terms of a previous order passed in ITA No. 661/2018, citing Sections 158A and 158AA of the Income Tax Act, 1961, although noting their strict inapplicability. The core issue revolves around the levy of interest under Section 234B, which has been decided against the Revenue by the Delhi High Court in a prior case.

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's contention is 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). The Revenue acknowledges that an appeal against this decision is pending before the Supreme Court. The Assessee's arguments are not explicitly recorded, but it is implied that they would rely on the High Court's decision. The parties have agreed to dispose of the present appeal in terms of a previous order in a similar case, aligning with 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

$~37 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 1361/2018 THE PR.COMMISSIONER OF INCOME TAX -1 (INTERNATIONAL TAXATION) ..... Appellant Through: Mr. Ruchir Bhatia, Adv. versus GE ENGINE SERVICES MALAYSIA SDN BDH ..... 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. 50088/2018 (exemption) Allowed subject to all just exceptions. CM APPL. 50089/2018 (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 1361/2018 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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