INCOME TAX ACT, 1961

Section 144C(5)

Transfer pricing - Validity of directions issued by DRP for guidance of TPO under section 144C(5) - -

DRP had made certain directions for the guidance of the TPO under section 144C(5). Assessee was aggrieved by order of DRP and contended that DRP disregarded the judgments of the other High Courts on the question that TP adjustments can be made only with regard to international transactions which had taken place with the Associated Enterprises, and not the domestic transactions and, therefore, the international transactions with the Associated Enterprises could not be allowed to bear the brunt of the profit adjustments in the domestic transactions. Held: Contention of assessee was untenable that on the question of law, the DRP has disregarded the case laws of other High Courts. A mere discussion of such case laws but not applying to the facts cannot be said to be any disregard to the law laid down by the other High Courts in this respect. Merely because the order of the DRP may be binding on AO, against whose order, the appeal can be filed only before Tribunal, a short-cut could be provided to the assessee in such cases to invoke the writ jurisdiction, which itself has three tiers of remedies; before the High Court, two tiers, viz., Single Judge dealing with the Writ Petition and the intra-Court Writ Appeal before Division Bench and then if the matter is taken up to the Supreme Court by way of Special Leave Petition under Article 136 of the Constitution of India. Leaving it free for assessee to raise all the objections before AO and then before Tribunal in the manner provided under law, instant writ appeal was dismissed.

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2012-13

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