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TMI Blog2025 (3) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... Grid Solutions OY [2025 (1) TMI 911 - DELHI HIGH COURT] we find ourselves unable to sustain the impugned action. Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... The findings detailed above conclusively establish that the foreign companies of the T&D Segments of the GE Group (erstwhile Alstom group companies) including GE Grid (Switzerland) GMBH have Dependent Agent PE and Fixed Place PE in India and that a part of their business profits arising from India deserves to be taxed in India as income of PE. 8. In view of the above I am satisfied that assessee has a business connection as per Income Tax Act as well as a PE in India as per India Switzerland DTAA and the PE is engaged in activities which cannot be termed as auxiliary and preparatory. Thus it is held that the activities carried out by the Assessee through the PE in India are in the nature of marketing and sale of the equipments/production in India and these activities were the core activity of marketing, pre bid, bid and post bid negotiation, identification of customer & selling of the products and the amounts received by the Assessee from its customers in India is held to be attributable to its PE in India." It was on the aforesaid basis that the AO formed the opinion that income liable to tax for AY 2013-14 had clearly escaped assessment. 6. Similar reasons are assigned in sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therein:- "1. The challenge in this case is to the reopening of the assessment of Raymond Woollen Mills Ltd. We have been shown the recorded reasons for reopening under Section 147-A (sic Section 147). The case of the Revenue was that the assessee was charging to its profit and loss account fiscal duties paid during the year as well as labour charges, power, fuel, wages, chemicals, etc. However, while valuing its closing stock, the elements of fiscal duty and the other direct manufacturing costs were not included. This resulted in the undervaluation of inventories and an understatement of profits. This information was obtained by the Revenue in a subsequent year's assessment proceeding. 2. Mr Vellapally, learned Senior Counsel appearing on behalf of the appellant, has argued that the Department has made a grievous error in coming to this conclusion. 3. In this case, we do not have to give a final decision as to whether there is a suppression of material facts by the assessee or not. We have only to see whether there was prima facie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question of fact, that has to be determined separately for each assessment year. * (2010) 327 ITR 456 (SC)." 19. In order to appreciate what the Supreme Court held in National Petroleum, it would be apposite to notice the more elaborate discussion which appears in the judgment of this Court in National Petroleum Con. Co. v. Deputy CIT 2019 SCC OnLine Del 12357, the relevant parts whereof are extracted hereunder:- "24. The respondents have granted the impugned certificate for deduction at 4 per cent. of the gross receipts. The assessment for the above noted contracts would be undertaken in the future, viz., the assessment years 2019-20 and 2017-18 respectively. As of now, we are not concerned with a regular assessment proceeding but, with determination of rate of tax deduction. On perusal of reasons, it becomes manifest that during the course of enquiry under section 197 of the Act, the petitioner was asked to furnish the details regarding the scope and nature of the aforenoted contracts. The Revenue contends that for the R-series contracts, the petitioner has made contradictory statement regarding commissioning period and period of as-built documentation etc. The petitioner, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Co. Ltd v. CIT (1963) 49 ITR (SC) 137]. "It is well settled that in matters of taxation there is no question of res judicata because each year's assessment is final only for that year and does not govern later years, because it determines only the tax for a particular period". [Ref: Installment Supply P. Ltd. v. Union of India [1962] AIR 1962 SC 53 (Constitution Bench)]. 25. The petitioner has argued that the need for consistency and certainty requires that there must exist strong and compelling reasons for a departure from a settled position, which must be spelt out and they are conspicuously absent in the present case. Mr. Balbir Singh has strongly argued that the stand taken by the respondents in the previous year should have been followed and in this regard, he relies upon the decision of the Supreme Court in the case of Radhasoami Satsang v. CIT [1992] 193 ITR321 (SC). Besides, Mr. Singh, as quoted earlier has also led considerable emphasis on the decision of this court dated May 9, 2017, wherein this court directed the respondents to issue certificate under section 197 of the Act, accepting the alternative plea of the petitioner that the Oil and Natural Gas Corporatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er's contention that the assessment proceedings for the assessment years 2007-08, 2008-09 and 2009-10 have already determined this question in favour of the petitioner and there is no change in any circumstances. This question would require to be determined and finding of the fact would have to be arrived at, by a careful consideration of terms of contract, determination whereof cannot be undertaken in the proceedings under section 197 of the Act." 20. The interplay between the principle of consistency and the facts of each year of assessment was lucidly explained by our Court in Galileo Nederland BV Vs. Assistant Director of Income Tax (International Taxation) 2014 SCC OnLine Del 4282 as under:- "19. We are aware that each assessment year is separate and distinct and principle of res judicata does not apply to proceedings for subsequent or other years. However, the decision on an issue or question though not binding should be followed and not ignored unless there are good and sufficient reasons to take a different view. Thus, it was/is possible for the Assessing Officer to depart from the finding or a decision in one year as it is final and conclusive only in relation to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adoption of new arrangements that modified the way in which business is carried on." 23. It is in the aforesaid backdrop that the observations of the Supreme Court in CIT v Gupta Abhushan (P) Ltd 2008 SCC OnLine Del 1468 also assume significance and where it was unambiguously held that a survey report pertaining to a particular tax period cannot ipso facto be read or countenanced as being relevant and binding for independent assessment years as is evidenced from paragraph 6 of the report which is extracted hereinbelow: "6. The second part of the reasons recorded by the Assessing Officer indicate that during the survey, it was noticed that extensive renovation work in the business premises of the assessee had been undertaken and that the renovation in respect of the ground floor had been completed and that the renovation in respect of the first floor was going on. It is further noted that the assessee had not booked any expenses on account of renovation of the said business premises. On the basis of these facts, the Assessing Officer noted that he was satisfied that investments made in the renovation work had escaped assessment. Here too, we note that the survey was conducted on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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