Ge Renewables Grid LLC Vs ACIT (International Taxation) Circle 1(1)(1) & Anr (Delhi High Court)
Delhi High Court has delivered a significant blow to the Income Tax Department, quashing reassessment notices issued to GE Renewables Grid LLC (formerly Alstom Grid Inc/LLC) for Assessment Years 2013-14 to 2016-17. The court found that the Assessing Officer (AO) lacked tangible evidence to suggest that the US-based company had a Permanent Establishment (PE) in India during the relevant periods, a crucial prerequisite for taxing its business income in the country.
Justice [Name of Judge(s) not available in the provided text] presiding over the division bench, in a common order disposing of four related writ petitions, set aside the reassessment notices issued under Section 148 of the Income Tax Act, 1961. The petitions challenged notices dated March 31, 2021 (for AY 2015-16), March 30, 2021 (for AY 2013-14 and 2014-15), and March 19, 2021 (for AY 2016-17).
GE Renewables Grid LLC, a company incorporated in the United States, is involved in the development and deployment of power grid transmission and distribution management software and applications, along with related engineering services. The company was part of the Alstom Group until November 2, 2015, when Alstom Grid’s business was acquired by GE. The petitioner contended that it is not a tax resident of India. While it claimed no taxable income in India for AY 2013-14 and AY 2014-15, it acknowledged receiving income taxable as Fees for Technical Services (FTS) or royalty for AY 2015-16 and AY 2016-17, for which it had filed its income tax returns.
