THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -1 vs. GE ENERGY PARTS INC.

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ITA/1369/2018HC DelhiDLHC01071096201830 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 by stating that the issue of levy of interest under Section 234B of the Income Tax Act, 1961, is covered against the Revenue by the Court's 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 precedent is pending before the Supreme Court and that the ruling of the Supreme Court would equally apply to the present appeal. The operative direction was to dispose of the appeal in terms of the previous order, with liberty to the parties to file an application after the Supreme Court's decision if any difficulty arises. The principle is that where a similar issue has been decided by the High Court and an appeal is pending before the Supreme Court, the High Court may dispose of the current appeal in line with the existing precedent, awaiting the apex court's final verdict.

What were the facts?

The Commissioner of Income Tax - International Taxation -1 (the Revenue) filed an appeal against an order concerning GE Energy Parts Inc. (the assessee). 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 by the High Court in ITA No. 661/2018, citing Sections 158A and 158AA of the Income Tax Act, 1961, although acknowledging their strict inapplicability. The core issue pertains to the levy of interest under Section 234B of the Income Tax Act, 1961. The Revenue's contention on this issue was previously decided against them by the Delhi High Court in Director of Income Tax (International Taxation) vs. GE Packaged Power Inc. A Special Leave Petition against that decision is pending before the Supreme Court. The parties agreed that the Supreme Court's ruling would apply to 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? The Revenue argued 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 stated that an appeal against this decision is pending before the Supreme Court. The assessee did not record any specific arguments, but the parties agreed to dispose of the appeal in terms of the previous High Court order, implying agreement with the assessee's position as decided in the cited precedent.

Which sections of the Income-tax Act were involved?

Section 234B,Section 158A,Section 158AA

AI-generated summary — verify with the full judgment below

$~45 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 1369/2018 THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -1 ..... Appellant Through: Mr. Ruchir Bhatia, Adv. versus GE ENERGY PARTS INC. ..... 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. 50137/2018 (exemption) Allowed subject to all just exceptions. CM APPL. 50138/2018 (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 1369/2018 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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