2025 (10) TMI 360

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....ner is an eligible Assessee as contemplated under Section 144C (15) of the Income Tax Act, [for short "IT Act"] and the transaction entered into by the Petitioner was for purchasing 98% shareholding of a company called "Danfoss Systems Limited" [formally known as "Eton Fluid Power Limited"]. This share purchase took place because of a global corporate restructuring, and for this purpose, the Petitioner entered into share purchase agreements with third parties, namely, "Eaton Technologies Private Limited, India" and "ETN Holding 2 Limited, Mauritius," to acquire the 98% shareholding of "Danfoss Systems Limited". This share purchase transaction was referred by the Assessing Officer to the Transfer Pricing Officer to determine the Arm's Length....

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....the present case, the shares of Danfoss Systems Limited were sought to be purchased by the Petitioner inter alia from a Company in Mauritius, at the price of Rs. 363.10 per share. When the Assessing Officer referred the above matter to Transfer Pricing Officer, the Transfer Pricing Officer made a variation to the Arm's Length Price and valued the transaction at Rs. 517.82 per share. In other words, he recommended a variation in the Arm's Length Price. In these circumstances, the Petitioner would certainly be an eligible Assessee as contemplated under Section 144C(15)(b)(i) of the IT Act. Since this variation was prejudicial to the interest of the eligible Assessee, it was mandatory for the Assessing Officer, in the first instance, to forwar....

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....e the said timelines from time to time have been extended, the most recent one being to September 30, 2021. The Revenue ought to have appreciated that the requirement under Section 144C(1) to first pass a draft Assessment Order and to provide a copy thereof to the assessee is a mandatory requirement which gave substantive right to the assessee to object to any variation, that is prejudicial to it. In this case, the order under Section 92CA(3) of the Income-tax Act, proposed to make an adjustment of Rs.107,454,337/- to the arm's length price considered as Nil by Petitioner and to that extent the said adjustment was evidently prejudicial to the interest of the Petitioner. Depriving Petitioner of this valuable right to raise objection before D....

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....r jurisdiction on the Assessing Officer, where none exists. The Supreme Court decision in the case of ITO Vs. M. Pirai Choodi; [2011] 334 ITR 262 (SC) referred to in the Revenue's reply is also not applicable to the issue at hand as that was a case where the assessee was not given an opportunity to crossexamine the concerned witness and which assessee also had a statutory appellate remedy which the assessee had failed to avail of, whereas there is no such right available to the Petitioner in this case. In fact, the Petitioner has lost a substantive right due to the failure of the Respondents to pass and forward a draft assessment order in the first instance on a variance, prejudicial to the interest of the Petitioner. In our view, ....