Using LinkedIn Profiles as Evidence in Tax Dispute

The Tribunal admitted LinkedIn profiles as additional evidence to determine the existence of a Permanent Establishment (PE) and the attribution of profits. The validity of reopening under Section 148 was upheld due to the assessing officer's prima facie belief of income escapement. The Tribunal stressed the significance of considering all relevant evidence for an accurate factual finding and scheduled further hearings on the appeals.

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Issues Involved:
1. Admissibility of additional evidence filed by the department.
2. Validity of reopening under Section 148.
3. Existence of a Permanent Establishment (PE).
4. Attribution of profits.

Issue-wise Detailed Analysis:

1. Admissibility of Additional Evidence:
The department sought to admit additional evidence, including LinkedIn profiles of employees and a whistleblower's writ petition. The proceedings highlighted that the hearing commenced on 28-1-2014 and continued on various dates. The department filed an application for admission of additional documents on 19-2-2014. The assessee objected to this on the grounds that the department had not moved any formal application for admission of additional evidence and argued that LinkedIn profiles were hearsay evidence with no probative value. The Tribunal referred to the decision in Mascon Global Ltd. Vs. ACIT, which allowed the admission of additional evidence even without a formal application if it served substantial justice. The Tribunal concluded that the LinkedIn profiles were relevant and necessary for determining the issue of PE and admitted them, while the whistleblower's writ petition was not admitted due to adverse comments made against the whistleblower by the Hon'ble Delhi High Court.

2. Validity of Reopening Under Section 148:
Ld. CIT(DR) pointed out that a survey under Section 133A was conducted, revealing that GE group was engaged in sales activities in India through expatriate employees working for various GE entities. The income attributable to such PE was taxable in India but was not disclosed in the returns. The assessee had not provided full information on employees, leading to the issuance of notice under Section 148. The Tribunal noted that the assessing officer had recorded a finding that information regarding employees was not provided by the assessee, which was not objected to by the assessee. The Tribunal upheld the validity of reopening under Section 148 as the assessing officer had a prima facie belief of income escapement.

3. Existence of a Permanent Establishment (PE):
The department argued that GE group entities were conducting business in India through a PE, as evidenced by the activities of expatriate employees and the documents found during the survey. The LinkedIn profiles were admitted to substantiate the department's claim that these employees were responsible for sales and business development in India, indicating the existence of a PE. The Tribunal noted that the LinkedIn profiles provided relevant information on the employees' job profiles and responsibilities, which were crucial for determining the existence of a PE. The Tribunal held that the LinkedIn profiles were akin to admissions made by the employees and were not hearsay evidence.

4. Attribution of Profits:
The department contended that the income attributable to the PE in India was taxable but was not disclosed by the assessee. The Tribunal observed that the LinkedIn profiles would assist in appreciating the facts regarding the functions performed by the employees and the attribution of profits. The Tribunal emphasized that the correct determination of taxability should guide the proceedings and admitted the LinkedIn profiles to ensure a judicial determination of the facts.

Conclusion:
The Tribunal admitted the LinkedIn profiles as additional evidence to determine the existence of a PE and the attribution of profits but declined to admit the whistleblower's writ petition. The validity of reopening under Section 148 was upheld, and the Tribunal emphasized the importance of considering all relevant evidence to arrive at a correct factual finding. The appeals were fixed for further hearing on merits.

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