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

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ITA/1368/2018HC DelhiDLHC01072084201830 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 earlier order in ITA No. 661/2018. The Court noted that the issue of levy of interest under Section 234B of the Income Tax Act, 1961, was covered against the Revenue by the High Court's own judgment in Director of Income Tax (International Taxation) vs. GE Packaged Power Inc., (2015) 373 ITR 65 (Delhi). While an SLP against this judgment was pending before the Supreme Court, the parties agreed that the Supreme Court's ruling would apply to the present appeal. The Court recorded this agreement and disposed of the appeal, allowing parties to file an application after the Supreme Court's decision if any difficulty arose. The specific finding on the levy of interest under Section 234B is not detailed as the appeal was disposed of based on the pending Supreme Court decision.

What were the facts?

The Principal Commissioner of Income Tax - 1 (International Taxation) (the Revenue) filed an appeal against the order of the Income Tax Appellate Tribunal (ITAT). The assessee is GE Aviation Service Operation LLP. The appeal concerns the assessment year(s) not explicitly stated in the judgment. The dispute revolves around the levy of interest under Section 234B of the Income Tax Act, 1961. The Revenue's appeal is being disposed of in terms of a previous order of the Delhi High Court in a similar case, ITA No. 661/2018, which dealt with the same issue. The Revenue acknowledges that a Special Leave Petition (SLP) against a related High Court judgment is pending before the Supreme Court, and the outcome of that SLP will govern the present appeal.

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 judgment 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 levy of interest under Section 234B. Revenue's Contention: The Revenue acknowledges that the issue is covered against them by the Delhi High Court's decision in GE Packaged Power Inc. However, they state that an SLP against this decision is pending before the Supreme Court, and the ruling of the Supreme Court would apply to the present appeal. The Revenue also mentions that the appeal is being disposed of in consonance with Sections 158A and 158AA of the Income Tax Act, 1961, though these provisions are not strictly applicable.

Which sections of the Income-tax Act were involved?

Section 234B,Section 158A,Section 158AA

AI-generated summary — verify with the full judgment below

$~44 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 1368/2018 THE PR.COMMISSIONER OF INCOME TAX -1 (INTERNATIONAL TAXATION) ..... 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. 50143/2018 (exemption) Allowed subject to all just exceptions. CM APPL. 50144/2018 (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 1368/2018 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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