LinkedIn profiles of employees from multinational companies can now be tapped in by the taxman as evidence in respect of demands raised against their firms, according to an interim order of the Delhi Income Tax Appellate Tribunal (ITAT).

The order, passed in respect of cases lodged by GE against the department for multiple assessment years, gives legitimacy to the aggressive stand, usually adopted by the department in dealing with multinationals.

Earlier, in March 2007, the department had conducted a survey at the office premises of General Electric International Operations Company (GEIOC). After the survey, the department concluded that the GE group was engaged in various sales activities in India, for which expatriates were appointed as business heads to monitor Indian operations. It added that these expatriate employees looked after the business of GE group as a whole, irrespective of any GE group company making sales in India.

The taxman, in its assessment order, went on to record that as per the company’s application made to RBI and permission obtained thereafter, the liaison office was to act as a communication channel between the head office and customers in India. However, the taxman observed, the company instead of undertaking the permitted activities was employing personnel and providing their services to GE group companies worldwide. Following this, the department held that GEIOC was carrying out business in India through a Permanent Establishment (PE) and assessed that the income earned by such a PE was taxable in India.

Subsequently, the department asked the CEO of GEIOC to submit employment letters of employees working for overseas group companies and their roles and responsibilities. When the company failed to submit the letters of all employees of GE overseas group companies working in India, the taxman, during the course of proceedings in the tribunal, sought to submit LinkedIn profiles of employees as ?additional evidence? as they would serve in ?advancing the cause of justice?.

Dismissing GE’s contention that LinkedIn profiles are hearsay evidence, the tribunal said: ?LinkedIn profiles are not in the nature of hearsay because it is the employee who himself has given all relevant details and the same relate to him. These details are akin to admission made by a person. No third party is involved in creating of this profile and, therefore, it cannot be said to be hearsay evidence.?