Condonation of inordinate delay failed, while earlier transfer pricing directions and Rule 10B had to guide the arm's length exercise.

An appeal filed after a delay of 670 days was found to lack sufficient cause, so the delay was not condoned and the appeal could not proceed on that basis. In the transfer pricing dispute, where the facts were materially similar to earlier proceedings between the same parties, the Court's earlier directions were treated as applicable. The Transfer Pricing Officer was required to follow those directions, consider Rule 10B of the Income-tax Rules, 1962, and apply the transactional net margin method in the arm's length price exercise.

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Issues: (i) Whether the inordinate delay of 670 days in filing the appeal was liable to be condoned on the basis of sufficient cause; (ii) Whether the Transfer Pricing Officer was bound to follow the directions earlier issued by the Court for assessment year 2009-2010, including consideration of Rule 10B of the Income-tax Rules, 1962 and adoption of the transactional net margin method.

Issue (i): Whether the inordinate delay of 670 days in filing the appeal was liable to be condoned on the basis of sufficient cause.

Analysis: The explanation offered for the delay was found unacceptable and did not establish sufficient cause for condonation. The delay was described as hopelessly time-barred.

Conclusion: The delay was not condoned, and the appeal could not be entertained on that basis.

Issue (ii): Whether the Transfer Pricing Officer was bound to follow the directions earlier issued by the Court for assessment year 2009-2010, including consideration of Rule 10B of the Income-tax Rules, 1962 and adoption of the transactional net margin method.

Analysis: In view of the similarity of facts with the earlier matters between the parties, the earlier directions were held applicable. The Transfer Pricing Officer was required to follow those directions and to take into account Rule 10B while carrying out the arm's length price exercise. The appropriate method was also indicated as the transactional net margin method.

Conclusion: The Transfer Pricing Officer was directed to follow the earlier directions and apply Rule 10B with the transactional net margin method.

Final Conclusion: The appeal failed on limitation and the connected transfer pricing directions were affirmed for application in the present matter, resulting in disposal of the appeal against the appellant.

Ratio Decidendi: An appeal filed after an inordinate delay will not be entertained absent sufficient cause, and in a transfer pricing dispute involving materially similar facts, earlier binding directions on methodology and Rule 10B must be followed.

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