2009 (12) TMI 116 - HC - Income Tax

International Transaction under section 92CA, Arm s Length Price The petitioner is a fully owned subsidiary of three companies. The petitioner is filing written objection but not availing of opportunity of personal hearing. In this case Madras High Court dismissed the petition on the grounds of that the petitioner has availed of the personal hearing on the date on which the reply was filed. Since the petitioner had not availed of the personal hearing there was no justification in the plea of the petitioner that the order had been passed on transfer pricing aspect without affording a personal hearing. It is further held that order of the Transfer Pricing Officer binding on the assessing authority the petitioner had a remedy under section 144C of the Act, with the Dispute Resolution Penal. The writ petition stands dismissed

Summary

Issues:
Challenge to order under section 92CA(3) of the Income-tax Act, 1961 for not granting personal hearing to the petitioner.

Analysis:
The petitioner, an assessee, challenged an order under section 92CA(3) of the Income-tax Act, 1961, alleging a violation of the Act by not providing a personal hearing. The petitioner's return of income for the assessment year 2006-07 was filed, and subsequent communications regarding details and hearing dates were exchanged between the petitioner and the respondents. The petitioner contended that the order received on October 22, 2009, was contrary to the Act and cited a relevant legal precedent. The respondents, in their counter, stated that the petitioner was granted time for a personal hearing, but the petitioner failed to appear on the scheduled date. The respondents argued that the petitioner had the option to address the assessment issues before the appellate authority or the Dispute Resolution Panel.

The court considered the provisions of section 92CA of the Income-tax Act, emphasizing the requirement of granting a personal hearing to the assessee in transfer pricing matters. It noted the timeline of communications between the parties regarding the hearing dates and the petitioner's responses. The court observed that the petitioner failed to avail the opportunity for personal hearing despite filing objections on a later date. The court also highlighted the availability of the Dispute Resolution Panel for addressing grievances related to assessment issues, including transfer pricing aspects.

Regarding the limitation for passing the assessment order, the court referred to section 144C of the Act, which provides a framework for proposing assessment variations and timelines for passing orders. It explained the provisions allowing the assessee to file objections to draft orders and the time limit for passing assessment orders under section 144C. The court concluded that the petitioner had alternative remedies available under the Act, such as approaching the Dispute Resolution Panel, and dismissed the writ petition, stating that there were no extraordinary circumstances warranting court intervention. The court emphasized the importance of utilizing the remedies provided under the Income-tax Act and closed the matter without costs.