The assessee, a foreign company engaged in manufacturing products for power transmission, reactive power compensation, and harmonic filtering, had supplied equipment from outside India under a contract with an Indian company. It received only a 10% advance during the year and declared nil income. The assessment under section 143(3) accepted this position. Subsequently, a survey under section 133A(2A) was conducted at the GE group, which had taken over the assessee’s grid business in 2015. Based on the survey, reassessment was initiated on the ground that the assessee had a fixed place and dependent agent PE in India. The Court held that the Assessing Officer had merely reiterated survey findings without recording facts specific to AYs 2013-14 to 2017-18. The reassessment proceedings were quashed. (AYs .2013-14 to 2017-18)
Grid Solutions Oy (Ltd.) v. ACIT (IT) (2025) 303 Taxman 288 (Delhi)(HC)
S. 147: Reassessment – Survey – Income deemed to accrue or arise in India – Business connection – Permanent Establishment – Fixed place PE – Foreign company – Recorded reasons for belief that income had escaped assessment did not refer to facts specific to the relevant assessment years – Reassessment notice and order disposing of objections quashed – DTAA – India–Finland [S. 9(1)(i), 133A(2A), 143(3), 148, Art. 226]