Case Number: ITA No. 2035/DEL/2022
Appellant: GE Global Parts & Products GMBH, Switzerland
Respondent: ACIT, Circle-1(3)(1) Int. Taxation, New Delhi
Assessment Year: 2019-20
Date of Case Filing: 2022-08-26
Order Type: Final Tribunal Order
Date of Order: 2023-07-25
Date of Pronouncement: 2023-07-25
The case titled GE Global Parts & Products GMBH vs. ACIT, Circle-1(3)(1) Int. Taxation, New Delhi involves an appeal against the assessment order for the year 2019-20, focusing on the issue of Permanent Establishment (PE) in India.
GE Global Parts & Products GMBH, a tax resident of Switzerland, is engaged in the offshore supply of plants, equipment, spare parts, and related services for the maintenance of power plants in India. The controversy revolves around whether the appellant had a PE in India for the assessment year 2019-20.
In past assessments, notably from 2002-03 to 2006-07 and 2008-09, the Assessing Officer (AO) had determined that GE Global Parts & Products GMBH had a PE in India through its association with General Electric International Operation Company (GEIOC) at the AIFACS building in New Delhi. This conclusion was based on the premises being used for soliciting orders and concluding contracts, supported by expatriate employees and GE India Industrial Pvt. Ltd. (GEIIPL).
For the assessment years under consideration (2018-19 and 2019-20), the AO continued to attribute profits to the alleged PE. However, the appellant contended that the factual scenario had significantly changed:
Despite these changes, the departmental authorities upheld the existence of a PE in India for the assessment years 2018-19 and 2019-20, following the earlier judgments without fully examining the current facts presented by the appellant.
The Tribunal considered the submissions and evidence presented by the appellant, noting that the facts had indeed changed significantly since the earlier assessments. The key points were:
The Tribunal emphasized that the existence of a PE must be assessed on a year-to-year basis, and past conclusions cannot be applied blindly without considering the current facts. It highlighted the importance of independent application of mind by the departmental authorities.
The Tribunal concluded that the appellant did not have a PE in India for the assessment years 2018-19 and 2019-20. Consequently, no profits could be attributed to an alleged PE. All other issues raised in the appeals were rendered academic and did not require adjudication.
Final Judgment: The appeals were partly allowed, and it was held that GE Global Parts & Products GMBH did not have a PE in India for the assessment years 2018-19 and 2019-20.
Order Pronounced: 25th July, 2023
Signed by:
Shri G.S. Pannu, Hon’ble President
Shri Saktijit Dey, Vice President
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform