HYUNDAI HEAVY INDUSTRIES LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner is basically aggrieved by the constitution of the Dispute Resolution Panel envisaged u/S 144C of the Income Tax Act and, has consequently, filed the present writ petition challenging the vires of Section 144C of the Income Tax Act as well as Rule 3 (2) of the Income Tax (Dispute Resolution Panel) Rules, 2009.

(2.) The facts leading to the filing of the present writ petition is, that the petitioner is a foreign company established under the laws of Korea and is engaged in the business of offshore engineering construction and power projects in India. The petitioner is doing various business with the public sector undertakings including Oil and Natural Gas Corporation Limited. The petitioner contends that it has a liaison office at Mumbai and since 1987-88, assessment orders are being passed by the Assessing Officer. It is alleged that the assessment orders for the assessment years 1987- 88 onwards revolved on two basic issues, namely, whether or not the Mumbai office was a permanent establishment in India and whether or not the income derived from the work carried outside India was taxable in India. These issues were finally settled by the Supreme Court for the assessment year 1987-88 and 1988-89 holding that the Mumbai Office was not a permanent establishment and that the revenue derived from the activities carried outside India was not taxable in India.

(3.) The petitioner contends that inspite of the decision of the Apex Court, the Income Tax Officer continued to levy the tax. The petitioner contended that for the assessment years 2002-03 and 2004-05, the petitioner succeeded before the Income Tax Appellate Tribunal on the aforesaid two issues. The Income Tax Deptt. did not file any appeal u/S 260 (A) of the Act before the High Court and instead initiated the assessment proceeding u/S 147 and 148 of the Act on the ground that income chargeable to tax had escaped assessment.