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TMI Blog2018 (10) TMI 375X X X X Extracts X X X X X X X X Extracts X X X X ..... n empty formality and on the other hand, it has to be done only after considering the above stated materials. Consideration of the above materials by the Dispute Resolution Panel must be apparent on the face of the order and such exercise would be evident only when the order contains the discussion of facts and independent findings on those facts, by the Dispute Resolution Panel. Certainly mere extraction of the rival contentions will not satisfy the requirement of consideration. In the absence of any such independent reasoning and finding, it should be construed that the Dispute Resolution Panel has not exercised its power and issued directions by following the mandatory requirements contemplated under Section 144C(6) and (7). This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al items, which according to the petitioner has incorrectly distorted the petitioner's overall profitability. However, the Transfer Pricing Officer rejected the approach adopted by the petitioner and through a show cause notice dated 20.10.2016, characterised the petitioner's operation as 'contract manufacturing' and rejected the economic adjustments claimed by the petitioner. Consequently, the Transfer Pricing Officer passed an order dated 31.10.2016 proposing the transfer pricing adjustment of ₹ 770,01,10,000/-. Based on such order passed by the Transfer Pricing Officer, the Assessing Officer, passed a draft assessment dated 19.12.2016 under Section 143(3) read with Section 144(1) read with Section 92CA of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner in detail as against the order passed by the Transfer Pricing Officer. It is his contention that a cryptic order passed by the first respondent simply by accepting the finding of the Transfer Pricing Officer with one line approval cannot withstand the scrutiny of law. Thus, the learned senior counsel contended that the Dispute Resolution Panel ought to have considered the objections raised by the petitioner in detail, discussed the same based on the materials placed and arrived at a conclusion thereafter. In the absence of the above said procedure, the learned senior counsel contended that the order of the first respondent and the consequential order of the second respondent are liable to be set aside. Learned senior counsel invit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealt in detail by the petitioner by placing their reliance on certain documents and other relevant provisions. This Court, at this stage, is not inclined to express any view on the merits of those objections as it is for the first respondent to consider the same being the panel, exercising the power under Section 144-C. However, in this case, perusal of the impugned order of the first respondent would clearly indicate that apart from extracting each objections raised by the petitioner and the relevant portion of the order passed by the Transfer Pricing Officer dealing with such objection, the first respondent has not further discussed anything on the said objection in detail as to how the objections raised by the petitioner cannot be sus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by or cause to be collected by, it; and g) result of any enquiry made by, or caused to be made by, it. Sub-Section 7 of section 144C further contemplates that the Dispute Resolution Panel may make such further enquiry as it thinks fit or cause any further enquiry to be made by any Income Tax authority before issuing any directions. Perusal of the procedure contemplated under Sub-Section 6 and Sub-Section 7 thus, would clearly indicate that issuance of such directions as contemplated under Sub-Section 5, cannot be made mechanically or as an empty formality and on the other hand, it has to be done only after considering the above stated materials. Therefore, the consideration of the above materials by the Dispute Resolution Panel must be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers are set aside. Consequently, the matter is remitted back to the first respondent for considering the objections raised by the petitioner in detail and pass fresh order on merits and in accordance with law by giving independent reasons and findings. It is made clear once again that this Court is not expressing any view on the merits of the claim made by the petitioner or the findings rendered by the Transfer Pricing Officer, as it is for the first respondent to consider and decide. The first respondent shall pass such order after hearing the petitioner within a period of eight weeks from the date of receipt of a copy of this order. No costs. Consequently connected miscellaneous petitions are closed. - - TaxTMI - TMITax - Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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