This order dismisses two Income Tax Appeals filed by the CIT(IT) challenging an ITAT judgment. The Court upheld the ITAT's decision, noting the Assessing Officer correctly followed binding DRP directions on pricing margins. The appeals, questioning procedural compliance and jurisdiction, failed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
$~52 & 53
COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION)-2 .....Appellant Through: Mr. Sanjay Kumar, Sr. Standing Counsel with Ms. Easha and Ms.Hemlata Rawat, Standing Counsel.
versus
L. G. ELECTRONICS INC LTD. .....Respondent Through: Mr. Deepak Chopra, Mr. Ankul Goyal and Mr. Aowiteya Grover, Advs.
53
versus
L. G. ELECTRONICS INC LTD. .....Respondent Through: Mr. Deepak Chopra, Mr. Ankul Goyal and Mr. Aowiteya Grover, Advs.
CORAM:
HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE RAVINDER DUDEJA
O R D E R % 13.09.2024
This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 03/07/2025 at 00:21:25
“A. Whether on the facts and circumstances of the case and in law, the Ld. ITAT erred in quashing the final assessment order passed in the case without appreciating the facts that the final assessment order was passed in the case after due procedure under the provisions of the Income Tax Act, 1961?
B. Whether on the facts and circumstances of the case and in law, the Ld, ITAT erred in admitting the additional ground that AO has not followed the direction of the Ld. DRP, so the assessment order is non-est, when the assessee has not raised this ground in first round of appeal neither before Ld. IT AT nor before the Hon'ble High Court? C. Whether on the facts and circumstances of the case and in law, the Ld. ITA T erred in quashing the final assessment order passed in the case without appreciating the facts that the Hon'ble Delhi High Court vide its order dated 14.02.2020 has setaside the case to Ld. IT AT only on limited issue of determination of existence of assessee's PE in India?
D. Whether on the facts and circumstances of the case and in law, the Ld. IT AT erred in holding that there is no connection between A.Y. 2014-15 and A.Y. 2007-08, where there is direct connection as factual matrix were some for both years and DRP orders for A.Y. 2013-14 relied upon the DRP order for A.Y. 2007-08 through DRP order for A.Y. 2008-09?
E. Whether on the facts and circumstances of the case and in law, the Ld. IT AT erred in holding that the provisions of Section 144C (13) of the Income Tax Act, 1961 has not complied in assessee's case while passing the final assessment order?
F. Whether on the facts and circumstances of the case and in law, the Ld. ITAT erred in holding that the Ld. CIT has no jurisdiction power u/s 263 of the Act over the final assessment order passed in the case after direction of Ld. DRP?”
1 Tribunal
This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 03/07/2025 at 00:21:25
Income-tax vs. Headstrong Services India Pvt. Ltd.2 that it would be wholly impermissible for the Assessing Officer3 to disregard a binding direction issued by the Dispute Resolution Panel4 . 3. The appellants, however, have sought to rest their case on the order under Section 263 of the Income Tax Act, 19615 passed by the Commissioner and where while dealing with the aspect of profit margin of 50%, the said authority had observed as under:-
“11. On the issue of profit attributable to Indian PE, the Hon'ble DRP in its order 19.12.2016 for A.Y. 2007-08 at page- 17 held that charge on the wages/remuneration paid to the seconded employees at the cost-plus margin of 20% on 'salary attributed to India operations'. Hon'ble DRP justifies its decision to increase margin of 20% from 10% (as offered by the assessee's letter dated 05.12.2016) by noting that "The assessee has agreed to the issue of PE and the attribution because salary is charged to the PE. The rate offer is not reasonable as the extent of activities performed are substantially more than the quantum conceded by the assessee" .
2 2020 SCC OnLine Del 1709
3 AO
4 DRP
5 Act
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 03/07/2025 at 00:21:25
YASHWANT VARMA, J
RAVINDER DUDEJA, J
SEPTEMBER 13, 2024 ns
6 AY
This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 03/07/2025 at 00:21:25
2 issues framed by the court
Whether the Assessing Officer erred in disregarding binding directions issued by the Dispute Resolution Panel regarding profit attribution margins.
Whether the High Court order quashing the final assessment order without appreciating procedural compliance and jurisdiction concerns was correct.
Colour shows how this judgement treated each authority
Income-tax vs. Headstrong Services India Pvt. Ltd.Applied¶21
Income-tax vs. Headstrong Services India Pvt. Ltd.
2 provisions across 1 enactments
Commissioner of Income Tax (International Taxation)-2
L. G. Electronics Inc Ltd.
Yashwant Varma
Ravinder Dudeja
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
