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TMI Blog2021 (3) TMI 837X X X X Extracts X X X X X X X X Extracts X X X X ..... t this view is erroneous, we cannot hold it be an error of jurisdiction. Every error of an authority is not open to judicial review merely by terming it to be a jurisdictional error , although the same may, at a later stage, be set aside for being erroneous We will have to venture into the factual matrix of the case and come to a conclusion on whether the findings of the DRP are proper, and comment on the methodology behind the determination of the ALP. There cannot be any denying the fact that each assessment year is an independent proceeding and therefore the factual finding given by the DRP while agreeing with the TPO with regard to the method to be applied for determining the ALP will have to be examined by the appropriate forum. On the aspect of the Petitioner not being afforded an opportunity of hearing, we may only observe that it is not the case of the Petitioner that a hearing was not held. In fact, the Petitioners have averred that on 1st December, 2020, the final hearing in the matter was conducted by Respondent No. 2. The Petitioner had also filed its written submissions before Respondent No. 2 on the subject matter, raising the plea of consistency. Besides, deta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dopted by the Petitioner. These findings of the TPO culminated into a draft assessment order dated 28th November, 2019, passed by the Assistant Commissioner of Income Tax, Circle 22(2). Objections were raised before the DRP-1 vide objection No. 17, dated 23 rd December, 2019, on several grounds. The Petitioner was granted hearing on 1st December, 2020, and upon finding no merit in the objections, the impugned directions dated 2nd December, 2020 were issued, rejecting the same. 6. Aggrieved with the aforesaid negative response, the Petitioner has filed the present petition, inter alia contending that the DRP has failed to appropriately consider and deal with the objections of the Petitioner. 7. Mr. Ajay Vohra, learned Senior Counsel for the Petitioner contends that as the TPO exercises judicial functions and acts as a quasi-judicial authority, it is obligated to comply with and adhere to the principles of natural justice. He states that the TPO is required to follow the mandate of Section 144C and the impugned directions have been passed in breach thereof and are thus ultra vires the provisions of the Act. 8. Mr. Vohra states that he is conscious that within the scheme pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appropriate comparable for A.Y. 2015-16 was also in effect for A.Y. 2016-17. There has been no change in facts in relation to the said agreement. Following the rule of consistency, the DRP ought to have followed the same basis that it had adopted for the year 2015-16. Since the DRP had held the CUP method adopted by the TPO for A.Y. 2015-16 to be appropriate, for A.Y. 2016-17 too, the TPO was obliged in law to follow the same, and has erred in law by adopting other methods for which there is no justification. 11. Mr. Vohra further contended that the proceedings before the DRP are not an empty formality and it is required to comply and adhere with the statutory provisions and also take into consideration the materials furnished by the assessee. In support of the aforesaid contentions, Mr. Vohra relied upon the decisions of this Court in LI and Fung India Pvt. Ltd v. Commissioner of Income Tax, 2013 SCC OnLine Del 5052; Magneti Marelli Power Train India Pvt. Ltd. v. Deputy Commissioner of Income Tax, 2016 SCC OnLine Del 5758, and the judgment of the Karnataka High Court in GE Technology Centre (P.) Ltd. v. Dispute Resolution Panel, Bangalore, 2011 SCC OnLine Kar 4018. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing of this Panel s directions during AY 2015-16 even though the facts are identical for AY 2015-16 and application of the other method as MAM. It is submitted that this Panel, while giving the directions for AY 2015-16 disapproved the approach followed by the TPO and also all the 3 comparables used by him. It is also stated that even though the facts of AY 2016-17 are identical to that of AY 2015-16, the TPO completely disregarded the directions given by this Panel for AY 2015-16 and selected same/similar comparables to determine the ALP and changed the MAM from CUP to Other Method (stating that Other Method does not require strict comparability). It is also stated that this Panel considered an internal agreement provided by the assessee as a comparable uncontrolled price ('CUP') to determine the ALP of the international transactions entered with the AEs and that the said agreement is valid for current year also and hence, the matter stands directly covered in our favour by earlier order. It is further submitted that the assessee has undertaken the above international transactions during various previous years i.e. from AY 2009-10 to AY 2012-13 also, whereby, it has foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other method using the database having comparables. 15. At this stage, we are not to scrutinize the direction of the DRP as an Appellate Court. There are reasons given by the DRP for upholding the action of the TPO and we cannot analyse the same, while exercising writ jurisdiction. The aforesaid reasoning would have to be tested before the appropriate forum. The factual background would have to be necessarily evaluated by the AO while framing the assessment order. Therefore, in the instant case, we cannot say that directions are non-speaking and there is a breach of principles of natural justice. The objections and the material placed by the Petitioner have been examined, but for the reasons noted above, the DRP has taken a different view. Even if we were to assume for the sake arguments that this view is erroneous, we cannot hold it be an error of jurisdiction. Every error of an authority is not open to judicial review merely by terming it to be a jurisdictional error , although the same may, at a later stage, be set aside for being erroneous. Accepting the contention raised by Mr. Vohra would mean that we will have to venture into the factual matrix of the case and come to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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