GE Nuovo Pignone Vs CIT (Delhi High Court)
Delhi High Court held that that attribution of profits to PE in India is fact based, depending upon role played by PE in overall generation of income. Such activities carried out by the PE in India resulting in generation of income, may vary from case to case, and attribution of income has to be in line with the extent of activities of PE in India.
Facts- The question of law involved in the present appeal is that whether ITAT was justified in holding action of AO in exercising jurisdiction under Section 147/148 of the Income Tax Act, 1961 [“Act”] and assessing the income of the appellant for Assessment Year [“AY”] 2009-10 even in the absence of any material whatsoever in the possession of the AO relating to the relevant AY and whether on facts and in the circumstances of the case and in law, the ITAT was justified in upholding the finding of the AO that the appellant herein had a fixed place permanent establishment [“PE”] in India under Article 5(1) of the Double Taxation Avoidance Agreement [“DTAA”].
Conclusion- The power to reassess can be invoked only on the basis of material that may be pertinent to a particular AY, that principle would pale into insignificance where the assessee fails to assert a change or a fundamental alteration of the facts which are asserted to have remained unaltered. Viewed in that light, we find no merit in the challenge which stands raised to the initiation of reassessment action.
What has additionally weighed upon the Court is the attempt on the part of the appellant to seek a review and reconsideration of aspects which had come to be conclusively answered by this Court in the previous round of litigation which had ensued. The appellant has woefully failed to draw our attention to any material or circumstance which would justify such a course being tread or contemplated.
