Ge Steam Power Systems Vs ACIT (Delhi High Court)
Delhi High Court held that reassessment proceeding u/s. 148 of the Income Tax Act cannot be sustained as based on survey operations without there being any tangible material. Accordingly, petition allowed.
Facts- GE Steam Power Inc. (formerly known as Alstom Power Inc.) is a company incorporated in the United States of America and is engaged in the business of manufacturing, sales, marketing of power generation equipment and technical support services and is part of GE’s ‘Power’ business vertical.
Notably, notice u/s. 148 of the Income Tax Act was issued to the petitioner and AO’s reasons to believe that the Petitioner’s income has escaped assessment is primarily based on a survey that was conducted u/s. 133A(1) of the Act. The said survey was conducted on 06-07/06/2019 in the premises of GE Power India Ltd. which is a company incorporated in India and engaged in ‘Power’ business vertical of the GE Group, and GE T&D India Ltd., which is also a company incorporated in India and engaged in ‘Transmission and Distribution’ business vertical of the GE group.
AO recorded that it was found during the survey proceedings that the companies of the erstwhile Alstom Group which was engaged in ‘Power’ business have a Permanent Establishment [PE] in India in the form of a Dependent Agent PE and Fixed Place PE. Thus, part of their business income attributable to their PEs is chargeable to tax in India.
