TaxTMI 
TaxTMI 
2026 (4) TMI 1383
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.... the Act dated 19.03.2024 for the A.Y. i.e. 2017-18. 3. First we take up the appeal of the assessee in ITA No.3476/Del/2024 which was filed against the final assessment order dated 30.06.2024. In this appeal the assessee has raised following grounds of appeal :- "1. The order u/s. 264 r.w.s. 143(3) and 144C(13) dated 30 June 2024 is bad in law. 2. Transfer pricing additions with respect to Support Services (Refer Annexure for detailed ground) 3. Transfer pricing additions with respect to payment of royalty (Refer Annexure for detailed ground)" 4. The Ld. Counsel for the assessee at the outset submits that for the A.Y.2017-18 several assessment orders came to be passed pursuant to the directions of the DRP and narrating events the Ld. Counsel made the following submissions which resulted in passing several final assessment orders in the case of the assessee :- "1. The Appellant is a company incorporated under the Companies Act, 1956 and is engaged in providing long distance telecommunication services pursuant to the International Long Distance (ILD), National Long Distance (NLD) and Internet Service Provider (ISP) licenses granted by the Dep....
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....st 9,95,38,487 Variation in respect of License fee 35,68,47,514 Variation in respect of issue of deduction claimed u/s 80G of the Act 83,39,103 Assessed Income 3,46,75,93,109 9. However, the department did not serve/ communicate the and AD order to the Appellant, infact, Use very existence of such order what even not known to the department itself as is evident from the subsequent events as explained below. 10. An application under section 264 of the Act dated 30 May 2022 (P.B. Vol-1 185-190) was filed by the Appellant with a prayer to quash the first AO order considering DRF's specific directions and the fact that no final assessment order was passed pursuant to DIRI's directions (as Appellant was never served with any final order post DRP's directions). 11. The Ld. PCIT, pursuant to the petition filed by the Applicant, passed an order u/s 264 dated 19 March 2024 holding that a final assessment order has not been passed in conformity with the DRP directions even after multiple communications by Appellant. Thus, the AO was directed to pass such an order in conformity with DRP directions in terms of section 144C(13) of the ....
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....assed on 20.02.2022 and this fact is not in dispute. Thus, the assessment order dated 30.06.2024 is hereby quashed. 7. Coming to the appeal filed by the assessee in ITA No.3475/Del/2025, the Ld. Counsel submitted that the appeal came to be filed with the delay of 828 days for the reason that the final assessment order though was passed on 20.02.2022 the said order was never served on the assessee earlier but was served along with the assessment order dated 30.06.2024 and both the appeals were filed on 29.07.2024 by the Assessee. 8. Ld. Counsel further submitted that the assessee was also not aware of passing of this order dated 20.02.2022 and this fact is also evident from the actions of the assessee in filing an application u/s. 264 of the Act seeking direction PCIT to the AO to modify the assessment order dated 20.04.2021 which was not passed pursuant to the directions of the DRP. Therefore, the ld. Counsel for the assessee submitted that since the final assessment order dated 20.02.2022 was served on the assessee alongwith third final assessment order dated 30.06.2024 there was no delay in filing the appeal and assessing there is sufficient cause in not filing the appeal i....
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....t dated 7 December 2021 are barred by the time limitation provided under section 153 of the Act and hence, deserves to be held as void-ab-initio, bad in law and time-barred. 7. On the facts and circumstances of the case & in law, the final assessment order under section 143(3) r.w.s. 144C(13) and 1448 of the Act dated 22 February 2022 along with consequential notice of demand under section 156 of the Act dated 22 February 2022 are invalid, bad in law, non-est, a nullity in the eyes of law and non-enforceable in absence of service of the order to the Appellant. 8. On the facts and circumstances of the case & in law, the final assessment order under section 143(3) T.W.5. 144C(13) and 144B of the Act dated 22 February 2022 along with consequential notice of demand under section 156 of the Act dated 22 February 2022 passed by the Ld. AO was never served on the Appellant and accordingly, it vitiates the complete proceedings. 9. On the facts and circumstances of the case & in law, the Ld. DRP erred in issuing the directions under section 144C(5) of the Act dated 7 December 2021 without quoting a validly authenticating document identification number ('DIN....
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....ntra-group services with provision of network support services) and proceeding to determine the arm's length price of international transaction pertaining to payment of royalty from its AEs on a standalone basis by rejecting TNMM as the most appropriate method: 11.2 holding that the Appellant did not receive tangible benefit in lieu of the payment of royalty thereby challenging the commercial wisdom of the Appellant in making payment for royalty: 11.3. arbitrarily rejecting the supplementary analysis using CUP method to benchmark the payment of royalty transaction submitted by the Appellant without giving any cogent reasons; 11.4. undertaking fresh benchmarking analysis using Royaltystat database and selecting agreements which are not comparable to the royalty payment made by the Appellant to its AEs; 11.5. not providing the detailed search process along with backup documentation such as accept-reject matrix to provide Appellant an opportunity to evaluate the appropriateness of the benchmarking analysis: 11.6. erroneously computing arm's length price as arithmetic mean of the royalty rates of eleven. comparable agreements instead....
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....he Ld. AO ought to have allowed refund of February 2022 following the specific and binding mandatory DRP directions under section 1440(5) excess dividend distribution tax (DDT) of INR 9,91,22,987 in the final assessment order dated 22 of the Act dated 7 December 2021. 19. Without prejudice to the above, on the facts and circumstances of the case & in law, the Appellant ought to be allowed refund of excess dividend distribution tax (DDT) of INK 9,91,22,087 along with consequential interest on its dividend payout to its shareholders. Additional claim for deduction of road taxes and VAT on motor vehicles taken on leasti 20. On the facts and circumstances of the case & in law, the LI. AD ought to have allowed road tax of INR 12,09,023 and value added tax of INR 8,98,362 on motor vehicles in the final assessment order dated 22 February 2022 following the specific and binding mandatory DRP directions under section 144C(5) of the Act dated 7 December 2021. 21. Without prejudice, on the facts and circumstances of the case & in law, the Appellant ought to be allowed an expense towards road tax of INR 12,09,023 and value added tax of INR 8,98.362 on motor ....
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....d is not pressed. In view of the submissions of the letter of the assessee ground No.9 of grounds of appeal is dismissed as not pressed. 15. Coming to ground No.10 to 10.3 of grounds of appeal which are in respect of TP adjustment in respect of Intra-Group Services, the Ld. Counsel for the assessee submitted that this issue has been decided in favour of the assessee in assessee's own case for A.Y.2008-09 to A.Y.'s 2016-17 and A.Y.2018-19. Referring to para-8.1 at page -7 of the Tribunal's order for the A.Y.2018-19 the Ld. Counsel for the assessee submitted that the Tribunal decided the issue for A.Y. 2018-19 in ITA No.1576/Del/2022 dated 21.03.2025. 16. Heard rival submissions and perused the order of the Tribunal. We find that in so far as the TP adjustment with respect to receipt of Intra-Group services is concerned the Tribunal restored the issue to the file of the TPO for adjudicating the issue afresh and in accordance with law by observing as under :- "5. Next comes the assessee's second substantive ground challenging the learned lower authorities' action making the transfer pricing adjustment relating to it's receipt of intra group services amounting to Rs. 21,....
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....ribunal give the following directions :- "8. We next advert to the assessee's second substantive ground raising "royalty" adjustment issue in transfer pricing proceedings. We make it clear first of all that the assessee is indeed very fair during the course of hearing in not challenging the impugned adjustment in principle. Learned counsel's sole plea is that the lower authorities herein have not computed the impugned adjustment going by Rules 10CA(7) proviso r.w.s. sub-rule (8) thereof prescribing such a transfer pricing adjustment going by the "percentile method". That being the limited issue raised, we hereby direct the learned Transfer Pricing Officer to consider the assessee's instant sole plea and finalize his consequential computation as per law in very terms. The assessee's second substantive ground is partly allowed for statistical purposes." 19. Following the order of the Tribunal in assessee's own case for A.Y. 2018-19 we direct the TPO to decide the issue in the light of the Tribunal order for the A.Y. 2018-19 and the directions therein these ground are allowed for statistical purpose. 20. Coming to ground No.12 to 14, relating to disallowance of support ....
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.... we direct the AO to adjudicate the issue in the light of the Tribunal for the A.Y. 2018-19 and the direction therein. Ground No.15 is allowed for statistical purpose. 25. Coming to ground no.16 which is in respect of waiver of interest pursuant to adjustment of license fee, the Ld. Counsel for the assessee submits that the Hon'ble Supreme Court in the case of Bharti Hexacom Ltd. (466 ITR 387) in MA No.218 of 2014 has waved the interest. 26. Heard rival submissions and perused the orders of the authorities below. We observe that the Hon'ble Supreme Court in the case of Bharti Hexamcom Ltd. (466 ITR 387) is as under :- "7. We have given our thoughtful consideration to the submissions advanced at the Bar. We find that since the judgment of this Court is dated 16.10.2023, and having regard to the Telecom Policy, which commenced from the year 1999, the payment of interest for the period of which the tax demand is now to be met in respect of these cases stands waived." 27. In view of the decision of the Hon'ble Supreme Court the AO is directed to examine the issue of waiver of interest pursuant to adjustment of license fee and allow the claim of the assessee as per law....
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.....1 We have heard the rival submissions and perused the materials available on record. The short issue in dispute is assessee company had paid dividend to its non-resident shareholder. The assessee company had suffered dividend distribution tax at the rate of 20,36 percent in terms of section 1150 of the Act. For the dividends paid to non-resident shareholder, the assessee wanted to claim the benefit of reduced rate of tax of 10 percent as provided in Article 11 of India UK DTAA on the pretext that treaty provisions would override the domestic law. Accordingly, the plea of the assessee was that dividend distribution tax is liable only at the rate of 10 percent in respect of non-resident shareholder as against 20.36% remitted by the assessee. Hence the assessee is seeking refund of excess dividend distribution tax paid which was denied to the assessee by placing reliance on the decision of Special Bench of Mumbai Tribunal in the case of DCIT vs Total Oil India Private Limited reported in 104 ITR (T) 1 (Mumbai-Trib) (SB). Learned AR before us submitted that this Special Bench of Tribunal decision has been reversed by the Hon'ble Bombay High Court in Tax Appeal No. 6 of 2024 dated ....