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

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ITA/645/2018HC DelhiDLHC01071509201828 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 it was bound by its previous ruling in the assessee's favour in the case of 'Director of Income-Tax (International Taxation) vs. GE Packaged Power Inc.'. The Court found that the ITAT had not committed any error in following this previous order. However, the Court clarified that the parties would ultimately be bound by the final judgment of the Supreme Court in the pending batch of appeals and special leave petitions concerning the same issue. The appeals were consequently dismissed subject to these observations. The operative direction was the dismissal of the appeals.

What were the facts?

The appeals were filed by the Commissioner of Income Tax (International Taxation) against the order of the Income Tax Appellate Tribunal (ITAT). The assessee is GE Transportation Parts LLC. The appeals concern the levy of interest under Section 234-B of the Income Tax Act, 1961. The High Court noted that the issue was covered in favour of the assessee by its previous judgment in 'Director of Income-Tax (International Taxation) vs. GE Packaged Power Inc.'. The Revenue had appealed this previous judgment to the Supreme Court, and leave had been granted, with appeals pending.

What were the issues?

1. Whether the High Court is bound by its previous judgment in 'Director of Income-Tax (International Taxation) vs. GE Packaged Power Inc.' (2015) 373 ITR 65 (Delhi) regarding the levy of interest under Section 234-B of the Income Tax Act, 1961, when the Revenue has filed an appeal against that judgment before the Supreme Court. Assessee's Contention: The assessee would argue that the High Court is bound by its own previous ruling, which was in their favour, and that the ITAT correctly followed this precedent. Revenue's Contention: The Revenue would argue that while the previous judgment exists, their pending appeal before the Supreme Court on the same issue creates a situation where the High Court's decision should be considered in light of the pending higher court decision. The Revenue's sole question of law urged was with respect to the interest levied under Section 234-B.

Which sections of the Income-tax Act were involved?

Section 234-B

AI-generated summary — verify with the full judgment below

$~9 & 10 * IN THE HIGH COURT OF DELHI AT NEW DELHI 9 + ITA 644/2018 & CM APPL. 22623-25/2018

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

..... Appellant

Through: Mr. Ruchir Bhatia, Advocate.

versus

GE TRANSPORTATION PARTS LLC

..... Respondent

Through: Mr. Siddharth Joshi, Advocate.

AND 10

ITA 645/2018 & CM APPL. 22626-28/2018

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

..... Appellant

Through: Mr. Ruchir Bhatia, Advocate.

versus

GE TRANSPORTATION PARTS LLC

..... Respondent

Through: Mr. Siddharth Joshi, Advocate.

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

O R D E R %

28.05.2018

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 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 appeals are consequently dismissed subject to the above observations.

S. RAVINDRA BHAT, J

A. K. CHAWLA, J MAY 28, 2018 nn

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