BECHTEL LTD,LONDON vs. ACIT, CIRCLE 1(1)(2), INTERNATIONAL TAXATION, NEW DELHI

ITA 756/DEL/2023Status: DisposedITAT Delhi31 December 2025AY 2020-2119 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the AO exceeded his jurisdiction by taxing the income on a substantive basis when the DRP had directed taxation on a protective basis. Consequently, the final assessment order was deemed void ab initio and quashed.

What were the facts?

The assessee, Bechtel Limited, received payments for engineering and procurement services from Reliance Industries Limited. The Assessing Officer (AO) treated these receipts as taxable income in India, considering them as Fees for Technical Services (FTS) and the existence of a Permanent Establishment (PE). The Dispute Resolution Panel (DRP) directed the AO to tax the income on a protective basis, but the AO ultimately taxed it on a substantive basis.

What were the issues?

Whether the AO correctly taxed the assessee's income on a substantive basis when the DRP directed taxation on a protective basis, and if the AO's non-adherence to DRP directions renders the assessment order void.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C,Section 9(1)(vii)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(4)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, DELHI BENCH ‘D’: NEW DELHI

Before: SHRI VIKAS AWASTHY & SHRI MANISH AGARWAL

For Appellant: Shri Deepak Chopra, Ms. Priya Tandon and Shri Adwiteya Grover, Advs
For Respondent: Shri M.S. Nethrapal, CIT- DR
Hearing: 09/10/2025Pronounced: 31/12/2025

[ PER MANISH AGARWAL, AM: Captioned appeals are filed by the assessee against the order passed by the Assessing Officer u/s 143(3) r.w.s. 144C dated 09.06.2022 in term of the directions given by the DRP dated 02.05.2022 for Assessment Years 2018-19 and 2020-21. 2. Since the issues involved in both the appeals are common and interlinked, they are heard together and decided by a common order. First, we take the assessee’s appeal in ITA No. 1816/Del/2022 for AY 2018-19. Bechtel Limited vs. ACIT

3.

Briefly stated the facts are that the assessee had filed its return of income on 09.10.2018 declaring to

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 144C

All 3,699 judgments and leading authorities on Section 144C →

Recent GST High Court judgments

Search GST case law →