Mutual Agreement Procedure settlement must be implemented despite later disclosure objections, with amended assessments and refund relief.

A concluded Mutual Agreement Procedure settlement could not be deferred on the basis that the assessee had not disclosed Indian transfer pricing adjustments for a later assessment year. The amended Rule 44G required the competent authority to obtain relevant records and additional documents, but that procedural point did not justify withholding implementation of an already communicated and accepted settlement. The treaty-based MAP resolution, being beneficial to the assessee, had to be given effect despite domestic procedural objections. The assessment orders were therefore liable to be amended, with consequential refund and permissible interest, and the settlement was to be implemented in full for the relevant assessment years.

---

---

Issues: Whether the respondents could defer implementation of the Mutual Agreement Procedure settlement for the assessment years 2010-11 to 2013-14 on the ground that the petitioner did not disclose the Indian transfer pricing adjustments for assessment year 2013-14, and whether the petitioner was entitled to amendment of the assessment orders and refund with permissible interest in terms of the settlement.

Analysis: The settlement between the competent authorities had been worked out on the basis of the US transfer pricing adjustment and, after the amendment of Rule 44G with effect from 06.05.2020, the MAP process was treated as pending and governed by the amended procedure. Under the amended rule, the competent authority was required to call for relevant records and additional documents, and the petitioner's non-disclosure of the Indian transfer pricing adjustment did not justify withholding implementation of a concluded settlement that had already been communicated and accepted. The Court also held that the treaty position and the MAP resolution prevailed where beneficial to the assessee, and that the agreement had to be given effect notwithstanding domestic procedural objections.

Conclusion: The respondents could not defer implementation of the MAP settlement on the basis of the alleged non-disclosure, and the petitioner was entitled to correlative relief, amendment of the assessment orders, and refund with permissible interest.

Final Conclusion: The writ petition succeeded, and the tax authorities were directed to implement the MAP settlement in full for all the relevant assessment years and complete the consequential exercise within the time granted.

Ratio Decidendi: Where a MAP settlement has been concluded and communicated under the applicable amended procedure, the revenue cannot refuse or defer its implementation on a later procedural objection of non-disclosure when the settlement is otherwise beneficial to the assessee and the treaty regime requires its enforcement.

---