The case of Technip Energies Italy S.P.A. vs. DCIT, Circle-3(1)(1), International Taxation, New Delhi, heard by the Income Tax Appellate Tribunal Delhi Bench ‘D’, presents a significant analysis of the dispute over income assessed for the 2019-20 assessment year. Judicial Member Shri Saktijit Dey and Hon’ble President Shri G.S. Pannu presided over the case, filed against the final assessment order dated July 28, 2022.
The core of the dispute lies in the attribution of profits to the Permanent Establishment (PE) of Technip Energies Italy in India. The appellant, represented by Sh. Ajay Vohra, Sr. Advocate, and Sh. Anshul Sachhar, Advocate, challenged the assessment which significantly increased the income from Rs. 12,86,92,788 to Rs. 26,18,81,404 following directions from the Hon’ble Dispute Resolution Panel (DRP). The primary issues revolved around the rejection of the appellant’s audited financial statements and the correct application of income attribution rules to the PE.
The tribunal’s order delves into various legal and procedural irregularities cited by the appellant, including the failure to adhere to mandatory provisions of the Income Tax Act and improper application of transfer pricing rules and benchmarking analyses. The decision on February 28, 2023, highlighted the need for a fair and just hearing process, aligning with the principles of natural justice, and underscored the tribunal’s role in ensuring that assessments are conducted in a manner that is both lawful and reasoned.
This ruling is particularly significant for international companies operating in India through Permanent Establishments, as it clarifies several aspects of income attribution and the responsibilities of tax authorities under the Indian legal framework.
Challenging Final Assessment in ITA 2370/DEL/2022 by Technip Energies Italy
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