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

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ITA/596/2026HC DelhiDLHC01033967202630 July 2026Author: HON'BLE MR. JUSTICE RAJNEESH KUMAR GUPTA,HON'BLE MR. JUSTICE DINESH MEHTA3 pages
AI SummaryDismissed

What did the High Court hold?

The Delhi High Court held that no question of law, let alone 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 regarding the mandatory procedure under Section 144C of the Income Tax Act, 1961. The Court noted that the ITAT had annulled the assessment orders precisely because the Assessing Officer failed to follow this procedure. Furthermore, the Court observed that the amount involved in ITA 596/2026, pertaining to 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 Bennett Williamson Engineers Ltd. The Assessing Officer 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 procedure under Section 144C of the Act by not issuing draft assessment orders, instead passing final assessment orders directly. These assessment orders were annulled by the Income Tax Appellate Tribunal (ITAT) based on previous High Court judgments in similar cases. The Department sought condonation of a 170-day delay in re-filing the appeals.

What were the issues?

1. Whether a substantial question of law arises for consideration in these appeals, given the Assessing Officer's failure to follow the mandatory procedure under Section 144C of the Income Tax Act, 1961, by directly passing assessment orders instead of draft assessment orders, when the assessee, a foreign company, was determined to be controlled and managed in India. Assessee's Contention: The assessee would likely argue that the Assessing Officer's failure to follow the mandatory procedure under Section 144C renders the assessment orders invalid, as established by the ITAT and supported by High Court precedents. They would rely on the judgments in *Rolland Enterprises Ltd.* and *Sumitomo Corporation India (P) Ltd.*. Revenue's Contention: The revenue's primary contention would be that a substantial question of law arises, or they might argue for the validity of the assessment orders despite the procedural lapse. However, the judgment indicates no specific arguments were made by the revenue on the merits of the procedural lapse, focusing instead on the monetary limit for appeals.

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 11:08:38

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 11:08:38

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 11:08:38

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