Ge Steam Power Systems Vs ACIT (Delhi High Court)
Delhi High Court held that reassessment under section 148 of the Income Tax Act cannot be sustained since there is no tangible material for forming a belief that petitioners had a dependent Permanent Establishment (PE) or Fixed Place PE in India
Facts- The petitioners have filed the present petitions impugning notices issued by the Assessing Officer [AO] under Section 148 of the Income Tax Act, 1961 [Act] seeking to assess / reassess the income of the Petitioner/s for Assessment Years [AY] ranging from 2013-14 to 2017-18.
Notably, the Petitioner objected to the initiation of the assessment proceedings under Section 147 of the Act primarily on the ground that there was no tangible material for the AO to conclude that the Petitioner had a PE in India during the previous year relevant to the assessment years in respect of which the impugned notices have been issued. However, the objections raised by the Petitioner were rejected.
Conclusion- Held that a plain reading of the reasons as recorded clearly indicates that there was no tangible material for forming a belief that the Petitioners had a dependent PE or a Fixed Place PE in India during the previous years relevant to the said assessment years in respect of which the impugned notices under Section 148 of the Act are issued, was sustainable. Concededly, the question involved in the present petitions is covered in favour of the Petitioners.
