ACIT Vs GE Steam Power Systems (Supreme Court of India)
The case concerns Special Leave Petitions filed before the Supreme Court challenging a High Court decision that had set aside reassessment notices issued under Section 148 of the Income Tax Act, 1961 for Assessment Years 2013–14 to 2017–18. The notices were issued by the Assessing Officer (AO) seeking to reassess the income of several non-resident entities forming part of a global power business group.
The petitioners were companies incorporated in various foreign jurisdictions including the United States, France, China, Germany, Malaysia, Switzerland, and Poland. These entities were not tax residents of India but had engaged in activities such as supply of power generation equipment, technical services, and related operations. Some of the petitioners had received income in the nature of Fees for Technical Services (FTS) and had filed returns in India, while others claimed that they had not earned taxable income in India for certain assessment years and had not filed returns accordingly.
The reassessment notices were based primarily on findings from a survey conducted under Section 133A of the Act at the premises of Indian group entities. The AO formed a belief that the foreign entities had a Permanent Establishment (PE) in India in the form of a Dependent Agent PE or Fixed Place PE. It was alleged that these entities had made supplies to Indian entities without appropriate tax deduction, and that income attributable to such PE had escaped assessment.
