THE COMMISSIONER OF INCOME TAX - (INTERNATIONAL TAXATION)-1 vs. GE TRANSPORTATION PARTS LLC

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ITA/638/2018HC DelhiDLHC01071499201823 May 2018Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE A. K. CHAWLA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the issue of interest levied under Section 234-B of the Income Tax Act, 1961, was covered in favour of the assessee and against the Revenue by the Court's prior judgment in 'Director of Income-Tax (International Taxation) vs. GE Packaged Power Inc.' (2015) 373 ITR 65 (Delhi). The Court found that the ITAT had not committed any error in following this previous ruling. The Court clarified that parties would ultimately be bound by the judgment of the Supreme Court on this question of law, given that the Revenue's appeals were pending before the apex court. The appeal was dismissed subject to these observations.

What were the facts?

The Revenue, Commissioner of Income Tax (International Taxation)-1, appealed against an order of the Income Tax Appellate Tribunal (ITAT). The appeal concerned the assessment year(s) not explicitly stated but related to the levy of interest under Section 234-B of the Income Tax Act, 1961. The assessee is GE Transportation Parts LLC. The ITAT had ruled in favour of the assessee on the issue of interest. The Revenue stated that it had appealed further to the Supreme Court, and leave had been granted, with appeals pending. The High Court noted that its previous ruling in a similar case, 'Director of Income-Tax (International Taxation) vs. GE Packaged Power Inc.', would bind it.

What were the issues?

1. Whether the interest levied under Section 234-B of the Income Tax Act, 1961, was correctly applied by the Revenue. The Revenue argued that the interest was leviable. The assessee contended that the issue was covered in its favour by a previous judgment of the High Court in 'Director of Income-Tax (International Taxation) vs. GE Packaged Power Inc.' (2015) 373 ITR 65 (Delhi). The High Court acknowledged that the Revenue had appealed this specific issue to the Supreme Court, and those appeals were pending.

Which sections of the Income-tax Act were involved?

Section 234-B

AI-generated summary — verify with the full judgment below

$~33 * IN THE HIGH COURT OF DELHI AT NEW DELHI

+ ITA 638/2018 & CM APPL. 21938-21940/2018

THE COMMISSIONER OF INCOME TAX - (INTERNATIONAL TAXATION)-1

..... Appellant Through: Mr. Ruchir Bhatia, Sr. Standing Counsel for Revenue.

versus

GE TRANSPORTATION PARTS LLC

..... Respondent

Through: None.

CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE A. K. CHAWLA

O R D E R %

23.05.2018

The sole question of law urged by the Revenue is with respect to the interest levied under Section 234-B of the Income Tax Act, 1961. This issue is covered in the assessee’s favour and against the Revenue by the judgment of this Court in ‘Director of Income-Tax (International Taxation) vs. GE Packaged Power Inc.’, (2015) 373 ITR 65 (Delhi).

It appears that the Revenue has appealed further to the Supreme Court and that its appeals are pending since leave has been granted.

In these circumstances, the Court is of the opinion that the previous ruling in the assessee’s case would bind it. The ITAT did ITA 638/2018

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not commit any error in following that previous order of this Court. However, it is also clarified that in any event, the parties shall be finally bound on the question of law by the judgment/ruling of the Supreme Court in the pending batch of appeals and the special leave petitions. The appeal is consequently dismissed subject to the above observations.

S. RAVINDRA BHAT, J

A. K. CHAWLA, J MAY 23, 2018 kks

ITA 638/2018

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