2025 (11) TMI 1913 - SCH - Income Tax

Tax reassessment notices quashed; no Fixed Place PE under Article 5 or sections 147/148 in collaboration case

SC dismissed the revenue's SLP challenging the HC's ruling on existence of a Fixed Place PE in India under Article 5 and the validity of reassessment ... Accrual of income in India - Indian establishment constituted a Fixed Place PE - Collaborative Exercise and Fixed Place PE - Article 5 (4) and DAPE - as decided by HC [2024 (5) TMI 1417 - DELHI HIGH COURT] PE must qualify and meet the tests of stability, productivity and dependence. Of equal significance were the observations which explained the phrases “at the disposal of” and “through”. Tested on the aforesaid precepts also, the impugned notices and the reasons set out for initiating action u/s 147/148 woefully fail to rest on any evidence which could have possibly compelled us in acknowledging that a Fixed Place PE had come into being. HELD THAT:- Having heard learned Counsel appearing for the petitioner on the facts and circumstances of the instant case, we are not inclined to entertain this petition. Accordingly, Special Leave Petition stands dismissed. Pending application(s), if any, shall stand disposed of. Outcome: Special Leave Petition dismissed [No detailed order].