Facts of the Case

The appellant/revenue, i.e., Commissioner of Income Tax (International Taxation)-3, filed multiple appeals challenging a common order passed by the Income Tax Appellate Tribunal dated 13.10.2021 concerning Assessment Years 2007-08 to 2014-15.

The core issue pertained to profit attribution to Indian operations of the respondent, Travelport Global Distribution System B.V. (earlier Galileo Nederlands BV), a foreign entity engaged in distribution systems.

There was also a delay of 460 days in re-filing the appeals, for which condonation was sought.

Issues Involved

  1. Whether the delay of 460 days in re-filing appeals should be condoned.
  2. Whether 15% of profits attributed to Indian operations (as held by CIT(A) and upheld by ITAT) was legally sustainable.
  3. Whether any substantial question of law arose for consideration by the High Court.

Petitioner’s Arguments (Revenue)

  • The Revenue sought to challenge the Tribunal’s order regarding profit attribution to Indian operations.
  • It was contended that the Tribunal erred in accepting the attribution rate determined by CIT(A).
  • The Revenue also sought condonation of delay in re-filing the appeals.

However, the Revenue fairly conceded that the issue on merits was already covered by the decision of the Hon’ble Supreme Court in a related group entity case.

Respondent’s Arguments (Assessee)

  • The respondent relied on prior judicial precedents, including decisions in its group entities.
  • It supported the Tribunal’s findings that only 15% of profits could be attributed to Indian operations.
  • It argued that the issue was already settled and no substantial question of law arose.

Court’s Findings / Order

  • The High Court condoned the delay of 460 days in re-filing the appeals in the interest of justice.
  • On merits, the Court observed:
    • The issue was already settled by the Hon’ble Supreme Court in:
      • Commissioner of Income-tax (International Taxation) v. Travelport L.P. USA
      • DIT v. Travelport Inc.
  • The Tribunal’s view that 15% of profits attributable to Indian operations was valid had already been upheld.
  • Therefore, the Court held that:
    • No substantial question of law arose for consideration.
    • All appeals were dismissed/closed.

Important Clarification

  • The judgment reinforces that when an issue is squarely covered by Supreme Court precedent, High Courts will not entertain appeals raising identical questions.
  • It also clarifies that profit attribution in international taxation matters, once settled judicially, should not be repeatedly litigated unless new legal grounds arise.
  • Even if delay is condoned, merits remain decisive, especially when binding precedents exist.

Sections Involved

  • Income-tax Act, 1961
    • Provisions relating to International Taxation
    • Attribution of Profits to Permanent Establishment (PE)
    • Appellate provisions concerning ITAT and High Court appeals

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/RAS08122023ITA7182023_153642.pdf

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