Baker Hughes Energy Technology UK Ltd. Vs ACIT (ITAT Delhi)
The assessee, a UK-based company, appealed against the assessment order dated 16.01.2025 passed under Sections 143(3) read with 144C for Assessment Year 2022-23. The principal dispute concerned whether the assessee had a Permanent Establishment (PE) in India and whether receipts from offshore supply of goods could be taxed under Section 44BB of the Income-tax Act.
The assessee had entered into a contract with ONGC along with other consortium members for offshore supply of goods. It filed its return declaring income of Rs. 3,22,67,490. During scrutiny, the Assessing Officer concluded that the assessee’s project office constituted a fixed place PE in India and that it also had a deemed PE under Article 5 of the India-UK tax treaty. Based on these findings, the Assessing Officer applied Section 44BB and treated 10% of offshore supply receipts amounting to Rs. 99,50,84,946 as taxable profits in India. The final assessment assessed income at Rs. 1,02,73,52,436.
The assessee challenged the assessment, contending that the issue had already been decided in its favour by the Tribunal in earlier assessment years and that there was no change in facts. The Dispute Resolution Panel (DRP) also recorded that the factual matrix was similar to preceding years and directed the Assessing Officer to verify whether the Department had filed any further appeal against the earlier Tribunal orders. Since the Revenue had appealed before the High Court, the Assessing Officer retained the addition.
