Non-resident corporations win appeal; no Permanent Establishment in India for 2018-19 and 2019-20 due to lack of evidence.

The Tribunal partly allowed the appeals, concluding that the non-resident corporate entities did not have a Permanent Establishment (PE) in India for the assessment years 2018-19 and 2019-20. This decision was based on the failure of the departmental authorities to counter the entities' evidence and the application of a precedent with similar circumstances. Consequently, other issues in the appeal were considered of academic interest and were not adjudicated.

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Issues:
The judgment involves challenges to final assessment orders under the Income-tax Act for the assessment years 2018-19 and 2019-20, primarily focusing on the existence of a Permanent Establishment (PE) in India.

Existence of Permanent Establishment (PE):
The case involved non-resident corporate entities engaged in offshore supply of plants, equipment, and services to customers in India. The Assessing Officer previously held that the entities had a PE in India based on activities conducted at a specific location. However, the entities argued that the factual circumstances had changed in the assessment years under dispute, with the premises being vacated, no expatriate employees present, and a significant increase in remuneration paid to an Indian entity. Despite the entities' contentions, the departmental authorities upheld the existence of PE without considering the changed circumstances. The Tribunal highlighted that the existence of a PE must be determined on a year-to-year basis and emphasized the Revenue's burden to establish the PE's existence. The Tribunal concluded that the entities did not have a PE in India during the assessment years under dispute, based on the uncontroverted evidence presented.

Other Issues:
Given the resolution of the PE controversy, the Tribunal deemed all other issues raised in the appeal as of academic interest and not requiring adjudication.

Conclusion:
The Tribunal partly allowed the appeals, ruling that the entities did not have a PE in India during the relevant assessment years. The decision was based on the failure of the departmental authorities to rebut the entities' evidence and the application of a precedent involving similar circumstances. As a result, the other issues raised in the appeal were not addressed, and the appeals were partly allowed.

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