THE PR.COMMISSIONER OF INCOME TAX -1 (INTERNATIONAL TAXATION) vs. GE AVIATION MATERIALS LP

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ITA/1366/2018HC DelhiDLHC01071163201830 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 High Court disposed of the appeal in terms of the order passed in ITA No. 661/2018, which was in consonance with Sections 158A and 158AA of the Income Tax Act, 1961, though these provisions were not strictly applicable. The Court noted that the question raised by the Revenue concerning the levy of interest under Section 234B of the Income Tax Act, 1961, was covered against them by the Delhi High Court's 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 judgment was pending before the Supreme Court. The parties agreed that the ruling by the Supreme Court would equally apply to the present appeal. Therefore, the appeal was disposed of with the understanding that if any difficulty arises, parties could file an application 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?

This is an appeal by the Pr. Commissioner of Income Tax -1 (International Taxation) against an order concerning GE Aviation Materials LP. The assessment year(s) are not explicitly stated. The appeal challenges the decision regarding 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 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 of Section 234B interest was previously decided against the Revenue by the Delhi High Court in Director of Income Tax (International Taxation) vs. GE Packaged Power Inc. (2015) 373 ITR 65 (Delhi), and an appeal 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 contends that the issue of interest under Section 234B is covered against them by the Delhi High Court's judgment in Director of Income Tax (International Taxation) vs. GE Packaged Power Inc., (2015) 373 ITR 65 (Delhi). The assessee's arguments are not explicitly recorded, but it is implied they rely on the aforementioned High Court ruling. The parties have agreed that the outcome of the present appeal should align with the Supreme Court's decision on the pending appeal against the GE Packaged Power Inc. judgment.

Which sections of the Income-tax Act were involved?

Section 234B,Section 158A,Section 158AA

AI-generated summary — verify with the full judgment below

$~42 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 1366/2018 THE PR.COMMISSIONER OF INCOME TAX -1 (INTERNATIONAL TAXATION) ..... Appellant Through: Mr. Ruchir Bhatia, Adv. versus GE AVIATION MATERIALS LP ..... 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. 50118/2018 (exemption) Allowed subject to all just exceptions. CM APPL. 50119/2018 (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 1366/2018 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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