High Court Of Delhi
Messe Dusseldorf India (P) Ltd. vs. DCIT & ANR.
Section 92CA, 144C, Art. 226
A.K. Sikri & J.R. Midha, JJ.
Writ Petn. No. 14079 of 2009
22nd December, 2009
Counsel Appeared :
Piyush Kaushik, for the Petitioner : N.P. Sahni, Ms. Suruchi Aggarwal & P.C. Yadav, for the Respondent
JUDGMENT
By the court :
The petitioner by means of this writ petition has challenged the order dt. 23rd Oct., 2009, passed by the TPO under s. 92CA(3) of the IT Act, 1961 determining the ALP in respect of international transaction for “representation services”. On the basis of this order, the AO has prepared a draft assessment order under s. 144C of the Act proposing to incorporate in the assessment order the addition made by the TPO in the computation of ALP of “representation services” transaction.
2. The grievance of the petitioner is that no proper opportunity was given to the petitioner and the petitioner was not confronted with the formula which is ultimately adopted by the TPO while fixing the ALP. In this behalf the submission of the petitioner is that though the petitioner was asked to furnish information and details with regard to the computation of the ALP which the petitioner furnished from time to time and in its letter dt. 13th Oct., 2009, has stated, that before disallowance with respect to the ongoing proceedings the petitioner be confronted/clarified etc., no such opportunity was given to the petitioner. Further submission in this behalf is that the TPO in a unilateral manner and without confronting the petitioner on the necessity of adopting the basis which is followed in the order dt. 23rd Oct., 2009 has made an addition of Rs. 41,95,484 (rupees forty-one lakh ninety-five thousand four hundred and eighty-four), which according to the petitioner is not correct and in this manner the TPO has increased the price by almost 90 per cent.
3. Learned counsel for the petitioner has also relied upon the judgment of this Court in the case of Moser Baer India Ltd. & Ors. vs. Addl. CIT & Anr. (2009) 221 CTR (Del) 97 : (2009) 17 DTR (Del) 98 : (2009) 316 ITR 1 (Del), wherein it has been held that s. 92CA(3) casts an obligation on the TPO to afford a personal hearing to the petitioner before he proceeds to pass an order determining the ALP in terms of the special provision. He further submits that in that very judgment this Court has held that if such an opportunity is not afforded to the concerned assessee before determining the ALP, such an order can be challenged by filing a writ petition under Art. 226 of the Constitution.
4. Mr. Sahni has appeared on advance notice and has produced a photocopy of the order/entries. These entries demonstrate that the petitioner was called by the TPO from time to time; he was asked to furnish certain information and make submission in that behalf. The impugned order has been passed thereafter. Therefore, it cannot be treated to be a case where opportunity of hearing was not afforded to the petitioner before passing an order. However, as noted above, the submission of the petitioner is that the petitioner was not confronted with the basis which the TPO adopted ultimately. We are of the opinion that such a plea can be taken by the petitioner by filing objections to the order of the TPO as well as draft order prepared by the AO. After the draft order is framed by the AO the assessee has remedy to approach the Dispute Resolution Panel provided under s. 144C of the Act. The said Dispute Resolution Panel, before considering the matter has to be guided by sub-s. (6) of s. 144C of the Act which reads as under : “(6) The Dispute Resolution Panel shall issue the directions referred to in sub-s. (5), after considering the following, namely : (a) draft order; (b) objections filed by the assessee; (c) evidence furnished by the assessee; (d) report, if any, of the AO, Valuation Officer or TPO or any other authority; (e) records relating to the draft order; (f) evidence collected by, or caused to be collected by it; and g) result of any enquiry made by, or caused to be made by, it.” Thus, not only would the petitioner have opportunity to file objections, the evidence which is furnished by the assessee has also to be considered by the Dispute Resolution Panel before passing final orders.
The petitioner thus shall be entitled to raise all possible objections and along with that furnish necessary evidence as well to rebut the report of the TPO as draft assessment order. Since such a remedy is available to the petitioner, it is not necessary to go into this aspect in the present writ petition filed by the petitioner. We expect and hope that the Dispute Resolution Panel shall, positively, deal with the objections filed by the petitioner along with support evidence furnished by him to rebut the basis adopted by the TPO to arrive at the ALP (ALP ) and thereafter only it shall pass speaking orders. With these observations this writ petition is dismissed.
[Citation : 320 ITR 565]
