Income Tax Escaped Assessment Notices Against Non‑Resident GE Entities Invalid: Supreme Court Upholds Delhi HC Ruling [Read Order]
This decision reinforces judicial scrutiny over reopening of assessments under Section 147/148, emphasizing that “reason to believe” must rest on tangible evidence, not conjecture drawn from group‑level surveys.
![Income Tax Escaped Assessment Notices Against Non‑Resident GE Entities Invalid: Supreme Court Upholds Delhi HC Ruling [Read Order]](https://images.taxscan.in/h-upload/2026/04/18/2133624-income-tax-escaped-assessmentjpg.webp "Income Tax Escaped Assessment Notices Against Non‑Resident GE Entities Invalid: Supreme Court Upholds Delhi HC Ruling [Read Order]")
In a recent ruling, the Supreme Court of India has dismissed the Income Tax Department’s appeal against the Delhi High Court’s decision that quashed reassessment notices issued under Section 148 of the Income Tax Act, 1961, one of the several foreign entities of the General Electric Group. The dispute centered on whether the Department could reopen assessments...
In a recent ruling, the Supreme Court of India has dismissed the Income Tax Department’s appeal against the Delhi High Court’s decision that quashed reassessment notices issued under Section 148 of the Income Tax Act, 1961, one of the several foreign entities of the General Electric Group.
The dispute centered on whether the Department could reopen assessments for the years 2013–14 to 2017–18 on the grounds that the non‑resident GE companies had a Permanent Establishment (PE) in India.
The Delhi High Court had earlier held that the notices were unsustainable because the Assessing Officer’s “reason to believe” was based solely on a 2019 survey at the premises of GE Power India Ltd. and GE T&D India Ltd. The survey suggested that foreign GE entities might have a Dependent Agent PE or Fixed Place PE in India.
But the Court found no tangible evidence linking the overseas companies to any taxable presence in India. It noted that the entities were non‑residents, engaged in offshore supply or technical services, and had already filed returns for the relevant years wherever income was taxable.
In the High Court, findings observed that the Department’s belief of escaped income was unsupported by material facts. The reasoning relied entirely on employee statements recorded during the survey, without independent inquiry or corroboration.
The bench cited earlier rulings, Grid Solutions OY v. ACIT, GE Hydro France v. ACIT, and GE Renewables Grid LLC v. ACIT, which had already clarified that mere group affiliation or shared business verticals do not establish a PE in India. The High Court set aside all Section 148 notices and disposed of the petitions in favor of the GE entities.
Upon hearing the counsel, the apex court bench comprising Justice J.B. Pardiwala and Justice Vijay Bishnoi observed that “Having heard the learned counsel appearing for the petitioner and having gone through the materials available on record, we do not find any good ground to interfere with the impugned order passed by the High Court “
After condoning the delay in filing, the Court held that there was no good ground to interfere with the Delhi High Court’s order and dismissed the petition.
Accordingly, the special leave petition was dismissed.
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