In a major relief to Travelport LP USA, the Delhi High Court dismissed the plea of the department against attribution of only 15% of revenue assessable to the Permanent Establishment (PE) in India by the Commissioner of Income Tax (Appeals) [CIT(A)].
The Delhi High Court Bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia, addressed the Income Tax Appeal, where the Commissioner of Income Tax – International Taxation-3 was the appellant, and Travelport L P USA was the respondent.
The court granted a decision after considering the matter on merits, despite a delay of 430 days in re-filing the appeal. The delay was condoned, and the court proceeded to dispose of the applications filed by the appellant seeking condonation of delay.
2121170 ONTARIO INC.,TAXSC
The appeals pertained to Assessment Year (AY) 2010-11 (ITA 708/2023) and AY 2008-09 (ITA 709/2023). The appellant sought to challenge the order by the Income Tax Appellate Tribunal that upheld the decision of CIT(A).
Ruchir Bhatia, the senior standing counsel representing the appellant-revenue, acknowledged the decision of the Supreme Court in the case of Commissioner of Income-tax (International Taxation) v. Travelport L.P. USA (2023) as relevant to the merits of the case.
The Supreme Court had considered and dismissed a special leave petition, affirming a judgment against the Revenue. Bhatia conceded that, based on this decision, no substantial question of law arose for consideration in the present appeals.
The crux of the matter revolved around the attribution of 15 percent of the revenue generated from bookings made within India to the Permanent Establishment (PE) of Travelport L.P. USA. The court noted that this issue had already been settled in favor of the respondent/assessee in the earlier decision concerning AY 2006-07.
Despite the Tribunal not ruling on the merits of the case for AYs 2007-08 to 2010-11, the court found that, given the earlier decision and the dismissal on grounds of limitation, the appeals need not be entertained on the proposed questions by the appellant.
The bench of Justice Rajiv Shakdher and Justice Girish Kathpalia also noted that, “Furthermore, the appellant’s/revenue’s plea that the provisions of Section 144C of the Act would come into play was repelled by the Tribunal for the reason that framing a draft assessment order was not required for the periods in issue, and therefore, the non-obstante clause under Section 144C of the Act would not override Section 153 of the Act.”
It was thus held that, “Since on merits the matter stands closed, in our view, these appeals need not be entertained vis-à-vis the questions proposed by the appellant/revenue as they have, in a sense, been rendered academic.”
Consequently, the Delhi High Court dismissed the appeals, being infructuous, on both merits and on limitation.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
