The Commissioner of Income Tax - International Taxation -2 v. National Petroleum Construction Company

1. For the reasons stated in the applications, the delay of 617 days in refiling the captioned appeals are condoned.

2. The applications stand disposed of. CM APPL. 54399/2025(Exemption) in ITA 368/2025

3. Exemption is allowed, subject to all just exceptions.

4. The application stands disposed of. ITA 361/2025; ITA 362/2025; & ITA 368/2025

5. All these three appeals filed by the Revenue under Section 260A of the Income Tax Act, 1961 (the Act) challenge the common order dated 22.06.2023[ in ITA 361/2025 and 368/2025] and the order dated 21.06.2023 [ITA 362/2025] passed by the Income Tax Appellate Tribunal (Tribunal) whereby the Tribunal has dismissed the appeals filed by the Revenue on the common issue, whether the assessee/respondent has various facets of Permanent Establishment (PE). The Assessment Years (AY) are 2018-19 & 2019-20 (ITA 361/2025 and ITA 368/2025) and 2020-21 (ITA 362/2025).

6. The Tribunal in the impugned order has held as under:

years i.e. AY 2010-11, 2011-12, 2012-13, 2013-14, 2014-15, 2015-16, 2016-17 and 2017-18 have also been completed in the almost identical manner wherein it was held that the project office of the assessee constituted a P.E. and profits were computed arising out of the offshore and onshore activities. The nature of activities for the current assessment year under consideration i. e. AY 2018-19 is identical to that of the earlier years, as mentioned above and being so, the facts of the case as far as existence of PE is concerned remain the same as in earlier years. During the course of assessment of the Assessee for earlier assessment years (i.e. AY 2007-08to AY 2017-18)) the aspect of PE of the Assessee and its taxability were examined in detail and discussed. There being no material change in the business model and nature of projects executed by the Assessee with ONGC/L&T in India, facts mentioned in the relevant para of the assessment order for AY 2007-08 to 2017-18 are also being relied upon in the present case."

7. This Tribunal in ITA No.l727/De1/2021 and 1728/De1/2021 for A.Y.2016-17) and 2017-18 had the occasion to consider a similar grievance. The coordinate Bench held as under:-

6. After considering the submission of assessee in the context of facts and material available on record, learned Commissioner (Appeals) having found that in assessee's own case in preceding assessment years, ''foe issue has been decided in favour of assessee by the Hon'ble High Court and Tribunal, he held that assessee did not have any PE in India. Accordingly, he allowed assessee's claim.

7. Before us, both, learned counsel appearing for the assessee as well as learned Departmental Representative have fairly submitted that the issues arising in the appeals are squarely covered by the decisions of the Hon'ble High Court and Tribunal in assessee's own case in the preceding assessment years.

8. Having considered the submissions of the parties, it is observed issues relating to existence of PE through the project office came up for consideration before Hon'ble jurisdictional High Court in assessment years 2007-08 and 2008-09. While deciding the issue, Hon'ble High Court held that assessee didn’t have either fixed place PE or installation PE or dependent agent PE in terms with Article 5 of India-UAE DTAA. Following the aforesaid decision of the Hon'ble jurisdictional High Court, the Tribunal in assessment year 2013-14 to 2015-16 has consistently held that assessee didn’t have any PE in India. Thus, respectfully following the consistent view of the coordinate Benches, as well as, Hon'ble Jurisdictional High court in the past assessment years, we uphold the decision of learned Commissioner (Appeals) on the issue. Grounds raised are dismissed.”

7. The Tribunal has noted the observations made by the Assessing Officer for the AYs 2010-11 to AY 2017-18. Mr Ruchir Bhatia, learned counsel appearing for the appellant has not seriously contested the above position in respect of AYs 2010-11 to AY 2015-16. The issue for these AYs have attained finality upto this Court.

8. Though, we have been informed that the judgments of this Court in ITA 882/2016, ITA 204/2019, ITA 64/2022, ITA 181/2022, ITA 351/2022, and ITA 42/2023, which deals with the previous AYs are in appeal before the Supreme Court, we are informed that no stay has been granted. The said judgments were passed relying upon the decision of this Court in the assessee’s own case in National Petroleum Construction Company v. DIT, (2006) 383 ITR 648, for AYs 2007-08 and 2008-09, wherein it was held that the assessee does not have a PE in India. The relevant paragraph is reproduced as under: