PRINCIPAL COMMISSIONER OF INCOME TAX, INTERNATIONAL TAXATION, DELHI- 1 vs. BENNETT WILLIAMSON ENGINEERS LTD

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ITA/599/2026HC DelhiDLHC01034004202630 July 2026Author: HON'BLE MR. JUSTICE DINESH MEHTA,HON'BLE MR. JUSTICE RAJNEESH KUMAR GUPTA3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no question of law, much less a substantial question of law, arises for consideration in these appeals. This conclusion is based on the consistent view of the Delhi High Court and the clear statutory position. The Court noted that the ITAT had annulled the assessment orders, which were passed by the Assessing Officer without following the procedure under Section 144C of the Income Tax Act, 1961, for foreign companies deemed controlled and managed in India. This aligns with previous judgments of the High Court in Rolland Enterprises Ltd. and Sumitomo Corporation India (P) Ltd. Furthermore, the Court observed that the amount involved in one of the appeals (ITA 596/2026, AY 2010-11) falls below the monetary limits prescribed by CBDT Circulars No. 5/2024 and 9/2024, making it liable for dismissal on that ground as well. Consequently, the appeals were dismissed.

What were the facts?

The appeals were filed by the Principal Commissioner of Income Tax, International Taxation, Delhi, against the respondent, Bennett Williamson Engineers Ltd. The appeals challenged orders passed by the Income Tax Appellate Tribunal (ITAT) which had annulled assessment orders. The Assessing Officer had determined that the assessee, a foreign company, was controlled and managed in India and thus taxable under the Income Tax Act, 1961. However, the Assessing Officer failed to follow the mandatory procedure under Section 144C of the Act by not issuing draft assessment orders, instead directly passing final assessment orders. The ITAT annulled these orders based on previous High Court judgments in similar cases. The appeals were filed with a significant delay, which the High Court condoned.

What were the issues?

1. Whether a substantial question of law arises for consideration regarding the annulment of assessment orders by the ITAT, which were passed without adhering to the procedure prescribed under Section 144C of the Income Tax Act, 1961, for foreign companies deemed to be controlled and managed in India. Assessee's Contention: The assessee would likely argue that the ITAT's decision to annul the assessment orders was correct because the Assessing Officer failed to follow the mandatory procedural requirement of issuing draft assessment orders under Section 144C, rendering the final assessment orders invalid. They would rely on the consistent view of the Delhi High Court in cases like Rolland Enterprises Ltd. and Sumitomo Corporation India (P) Ltd. Revenue's Contention: The revenue would likely contend that the assessment orders were valid and that the procedural lapse, if any, should not lead to annulment, or that the issue of control and management in India was correctly determined. They might argue for a substantial question of law to be framed, potentially challenging the interpretation of Section 144C or the applicability of the cited precedents.

Which sections of the Income-tax Act were involved?

Section 144C

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~121 & 124 * IN THE HIGH COURT OF DELHI AT NEW DELHI # CNR No. DLHC010339672026 + ITA 596/2026 PRINCIPAL COMMISSIONER OF INCOME TAX, INTERNATIONAL TAXATION, DELHI .....Appellant versus BENNETT WILLIAMSON ENGINEERS LTD .....Respondent # CNR No. DLHC010340042026 + ITA 599/2026 PRINCIPAL COMMISSIONER OF INCOME TAX, INTERNATIONAL TAXATION, DELHI- 1 .....Appellant versus BENNETT WILLIAMSON ENGINEERS LTD .....Respondent Appearances: For Appellant/Department: Mr. Indruj Singh Rai, SSC with Mr.Sanjeev Menon, Mr. Rahul Singh & Ms. Priya Sarkar, JSCs, Mr.Gaurav Kumar & Mr. Prateek Bhati, Advs. For Respondent/Assessee: Mr. Vaibhav Kulkarni & Mr. Akash Shukla, Advs. CORAM: HON'BLE MR. JUSTICE DINESH MEHTA HON'BLE MR. JUSTICE RAJNEESH KUMAR GUPTA

O R D E R %

30.07.

2026 CM APPL. 49028/2026 in ITA 596/2026 CM APPL. 49104/2026 in ITA 599/2026

1.

Exemptions allowed, subject to all just exceptions. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/08/2026 at 11:08:12

2.

The applications stand disposed of. CM APPL. 49027/2026 (delay in re-filing) in ITA 596/2026 CM APPL. 49103/2026 (delay in re-filing) in ITA 599/2026

3.

These are applications filed by the appellants-Department seeking condonation of 170 days’ delay in re-filing the appeals.

4.

For the reasons stated in the applications, the same are allowed and the delay of 170 days in re-filing the appeals stand condoned. ITA 596/2026 ITA 599/2026

5.

The issue involved in the present cases is that the Assessing Officer found that the assessee – a foreign company is controlled and managed in India and is, therefore, liable to be taxed under the Income Tax Act, 1961 (hereinafter referred to as ‘the Act of 1961’). However, having found so, the Assessing Officer did not follow the procedure provided under Section 144C of the Act of 1961 and instead of passing draft assessment orders, directly passed assessment orders, which assessment orders have been annulled by the Income Tax Appellate Tribunal, Delhi Bench ‘D’, New Delhi, vide order dated 19.09.2025 passed in ITA No.4055/Del/2015 (AY 2010-11) and ITA No. 4056/Del/2015 (AY 2011-12) in light of the order dated 02.12.2024 passed by this Court in ITA 556/2024 titled The Commissioner of Income Tax - International Taxation -3 v. Rolland Enterprises Ltd. The said judgment of Rolland Enterprises Ltd. (supra) relies upon an earlier judgment of this Court in Pr. Commissioner of Income Tax-7 v. Sumitomo Corporation India (P) Ltd. reported in 2024 SCC OnLine Del 6125. 6. In view of the consistent view of the Delhi High Court and otherwise This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/08/2026 at 11:08:12

also, in light of the clear statutory position, we are of the view that no question of law, much less substantial question of law arises.

7.

In any event, the amount involved in ITA 596/2026 arising out of assessment proceedings of AY 2010-11 falls below the limits prescribed in Circular No.5/2024 dated 15.03.2024 read with Circular No. 9/2024 dated 17.09.2024 issued by the Central Board of Direct Taxes and thus liable to be dismissed.

8.

The appeals along with pending application are, accordingly, dismissed.

DINESH MEHTA, J.

RAJNEESH KUMAR GUPTA, J. JULY 30, 2026 kk

This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/08/2026 at 11:08:12

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