2024 (2) TMI 1485 - HC - Income Tax

Validity of TP Adjustment - order as barred by limitation in violation of principles of natural justice without jurisdiction and an erroneous order - petitioner submits that the respondent No.1 TPO committed an error in passing the impugned order without considering or appreciating the relevant statutory provisions as well as the judgment of various High Courts - HELD THAT - As rightly contended by petitioner various judgments relied upon the petitioner which were rendered prior to the impugned order have not been considered by the respondent No.1 TPO before passing the impugned order which also does not take into account the relevant statutory provisions before passing the impugned order. Under these circumstances without expressing any opinion on the merit/demerits of the rival contentions and in order to enable the first respondent TPO to pass fresh orders after consideration of the relevant statutory provisions and the judgments of various High Courts referred to supra deem it just and appropriate to set aside the impugned order and remit the matter back to the first respondent for reconsideration afresh in accordance with law.

Summary

Issues:
Petition challenging order passed by Transfer Pricing Officer under Section 92CA of the Income Tax Act, 1961 for assessment year 2015-16. Petitioner seeks writ of Certiorari to quash the order, declares the order as barred by limitation, in violation of natural justice, without jurisdiction, and erroneous. Petitioner requests other reliefs as deemed fit by the Court.

Analysis:

The petitioner challenged the order passed by the Transfer Pricing Officer (TPO) under Section 92CA of the Income Tax Act, 1961 for the assessment year 2015-16. The petitioner sought a writ of Certiorari to quash the order, contending that the order was barred by limitation, violated principles of natural justice, lacked jurisdiction, and was erroneous. The petitioner also requested other reliefs as deemed fit by the Court.

During the hearing, the petitioner's counsel argued that the TPO erred in passing the impugned order without considering relevant statutory provisions and judgments of various High Courts. The counsel referred to specific judgments, including those of Commissioner of Income Tax vs M/s. Thyssen Krupp Industries India Pvt. Ltd., Commissioner of Income Tax vs Tara Jewels Exports Pvt. Ltd., and others, to support the argument that non-consideration of these judgments would vitiate the impugned order. The counsel urged the Court to set aside the order and remit the matter back to the TPO for reconsideration in accordance with the law.

In response, the respondents' counsel contended that there was no merit in the petition and it should be dismissed. The respondents argued that the petitioner had failed to produce the judgments during the proceedings, indicating that the petitioner was not entitled to any indulgence in the petition.

After considering the submissions from both parties and examining the material on record, the Court acknowledged that the judgments relied upon by the petitioner were not considered by the TPO before passing the impugned order. The Court noted that the impugned order did not take into account relevant statutory provisions. Therefore, without delving into the merits of the arguments presented, the Court decided to set aside the order and remit the matter back to the TPO for fresh consideration in light of the relevant statutory provisions and judgments cited by the petitioner.

In the final order, the Court allowed the petitioner's plea, set aside the impugned order dated 31.10.2018 passed by the TPO, and remitted the matter back to the TPO for reconsideration. The Court kept all rival contentions open, reserved liberty for the petitioner to submit additional pleadings and documents, and emphasized that the respondent should provide sufficient opportunity to the petitioner during further proceedings.