Facts of the Case

The Revenue filed appeals before the Delhi High Court challenging the order of the Income Tax Appellate Tribunal (ITAT) dated 09.11.2020. The Tribunal had dismissed the Revenue’s appeal concerning Assessment Years 2008-09 and 2010-11 on the ground of limitation under Section 153 of the Income-tax Act.

The central issue arose from assessment proceedings involving the respondent assessee, Travelport L.P. USA, where a portion of revenue generated from bookings in India was attributed to its Permanent Establishment (PE) in India.

The Revenue also filed applications seeking condonation of delay of 430 days in re-filing the appeals, which the High Court condoned in order to decide the matter on merits.

Issues Involved

  1. Whether the assessment order was barred by limitation under Section 153 of the Income-tax Act.
  2. Whether provisions of Section 144C override Section 153 in the context of draft assessment orders.
  3. Whether any substantial question of law arises in light of prior Supreme Court rulings in the assessee’s own case.

Petitioner’s Arguments (Revenue)

  • The Revenue contended that the Tribunal erred in dismissing the appeal on limitation grounds.
  • It was argued that Section 144C (relating to draft assessment orders in cases involving eligible assessees) should apply and override the limitation prescribed under Section 153.
  • The Revenue attempted to challenge the Tribunal’s findings regarding the time-barred nature of the assessment order.

Respondent’s Arguments (Assessee)

  • The respondent relied on earlier decisions, including the Supreme Court ruling in its own case, where similar issues had been decided against the Revenue.
  • It was contended that the assessment order was clearly barred by limitation under Section 153.
  • The assessee also supported the Tribunal’s view that Section 144C was not applicable in the relevant assessment years, as no draft assessment order was required.

Court’s Findings / Order

  • The High Court noted that the Supreme Court had already settled the issue in the assessee’s own case for earlier assessment years.
  • It observed that the question regarding attribution of revenue to Permanent Establishment had already been decided and attained finality.
  • The Tribunal’s finding that the assessment order was time-barred under Section 153 was upheld.
  • The Court agreed that Section 144C would not override Section 153 in cases where draft assessment procedure was not applicable.
  • Since the matter on merits stood concluded by the Supreme Court, no substantial question of law survived.

Important Clarifications

  • Section 144C (draft assessment procedure) does not automatically override limitation provisions under Section 153.
  • If draft assessment is not required for a particular assessment year, Section 144C cannot be invoked to extend limitation.
  • Once the Supreme Court settles an issue in the assessee’s own case, similar matters become academic and cannot be re-agitated.


Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/RAS07122023ITA7082023_151938.pdf

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