Delhi HC: Permanent Establishment Status Must Be Examined Separately for Each Tax Period

The Delhi High Court ruled that determining whether an entity is a Permanent Establishment (PE) of a foreign company is a fact-specific issue that must be assessed separately for different tax periods.

The Court emphasized that facts from earlier or later tax periods cannot be automatically applied to other years without careful examination.

It quashed reassessment notices issued to GE Group's Transmission and Distribution vertical for AYs 2013-14 to 2017-18, finding that the Assessing Officer relied on outdated surveys from 2007 and 2019 without considering specific facts of the relevant years.

The judgment reinforces the principle that changes in business operations or arrangements over time necessitate individual assessments for each tax period.