ACIT Vs GE Steam Power Systems (Supreme Court of India)
The Supreme Court dismissed the Special Leave Petitions filed by the Revenue against the Delhi High Court judgment in matters relating to reassessment notices issued under Section 148 of the Income Tax Act to several foreign entities of the GE Group for Assessment Years 2013-14 to 2017-18. The Supreme Court stated that, after hearing the parties and examining the record, it found no good ground to interfere with the High Court’s orders. Accordingly, the SLPs were dismissed and pending applications were disposed of.
The underlying proceedings before the Delhi High Court concerned reassessment notices issued to various foreign entities including companies incorporated in the USA, France, China, Germany, Malaysia, Switzerland, and Poland. These entities were engaged in businesses relating to power generation equipment, technical support services, power plant systems, generators, turbines, and engineering services. None of the petitioners were tax residents of India.
Some of the entities had filed returns of income in India for income characterized as Fees for Technical Services (FTS), while others claimed that they had not earned any income chargeable to tax in India during the relevant years and therefore had not filed returns.
The reassessment notices under Section 148 were based primarily on a survey conducted under Section 133A at the premises of GE Power India Ltd. and GE T&D India Ltd. in June 2019. According to the Assessing Officer (AO), the survey revealed that companies of the erstwhile Alstom Group engaged in the “Power” business had a Permanent Establishment (PE) in India in the form of a Dependent Agent PE and a Fixed Place PE.
