THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -1 vs. GE PACIFIC PTE LTD.

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ITA/1362/2018HC DelhiDLHC01071904201830 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 the order passed in ITA No. 661/2018, which was itself to be decided in consonance with the forthcoming ruling of the Supreme Court in the pending appeal against the decision in Director of Income Tax (International Taxation) vs. GE Packaged Power Inc. The Court noted that the issue of levy of interest under Section 234B was covered against the Revenue by the High Court's prior judgment in the GE Packaged Power Inc. case. The operative direction was to dispose of the present appeal, with the understanding that the Supreme Court's decision would be binding. The Court also granted liberty to the parties to file an application in the present appeal if any difficulty arose after the Supreme Court's decision. No specific finding was made on the merits of the Section 234B interest levy in this judgment, as it was deferred pending the Supreme Court's decision.

What were the facts?

The Commissioner of Income Tax (International Taxation)-1 (the Revenue) filed an appeal against an order concerning GE Pacific Pte Ltd. (the assessee). The appeal was filed with a delay in re-filing, which was condoned. The parties informed the Court 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 Income Tax Act, 1961, though acknowledging their strict inapplicability. The core issue for the Revenue concerned the levy of interest under Section 234B of the Income Tax Act, 1961. This issue was previously decided against the Revenue by the Delhi High Court in Director of Income Tax (International Taxation) vs. GE Packaged Power Inc. An appeal against that decision was 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). The Revenue acknowledged that an appeal against this judgment was pending before the Supreme Court. The Revenue stated that the ruling of the Supreme Court would apply to the present appeal. The judgment does not record any specific arguments made by the assessee on this issue, other than their agreement to dispose of the appeal in terms of the previous High Court order and the forthcoming Supreme Court 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

$~38 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 1362/2018 THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -1 ..... Appellant Through: Mr. Ruchir Bhatia, Adv. versus GE PACIFIC PTE LTD. ..... 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. 50094/2018 (exemption) Allowed subject to all just exceptions. CM APPL. 50095/2018 (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 1362/2018 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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