TaxTMI 
TaxTMI 
2026 (5) TMI 307
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....wing grounds of appeal:- "Legal Grounds: 1. On the facts and circumstances of the case, the Ld. AO has erred in not issuing the final assessment order in conformity with the directions of the Ld. DRP and the order of the Ld. TPO. Thus, the Ld. AO has violated the mandatory provisions of section 144C(10) read with 144C(13) and Section 92CA(4) of the Act. Accordingly, the final assessment order dated December 23, 2025, is bad in law and ought to be quashed. Pertaining to Transfer Pricing Issues: Adjustment Rs. 54,183,096 2. On the facts and in the circumstances of the case and in law, the Ld. DRP, Ld. TPO and Ld. AO (collectively referred as "the Revenue") erred in making an adjustment of Rs. 54,183,096 to the total income of the Appellant on account of the alleged difference in the arm's length price (ALP) of its international related party transactions under the provisions of Section 92CA(4) of the Act. 3. On the facts and in law, the Revenue has erred in summarily rejecting the comprehensive analysis undertaken by the Appellant employing the Transactional Net Margin Method ('TNMM'), without demonstrating the inadequacy or in....
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....able at Sl. No. 42 of the Computation sheet [forming an integral part of the assessment order u/s 143(3)], 8. That, on the facts and circumstances of the case and in law, the Ld. AO erred in initiating penalty proceedings under Section 270A of the Act. 9. Without prejudice to the above grounds, on the facts and circumstances of the case and in law, the assessment proceedings are barred by limitation in view of Section 153 read with Section 144C of the Act. 3. Ground No. 9 raised by assessee challenging the validity of assessment as barred by limitation in the light of decision of Hon'ble Madras High Court in case of Roca Bathroom Products Private Limited was withdrawn by the assessee vide letter dated 01.4.2026. The said letter is placed on record before the bench. Considering the same, ground No. 9 is hereby dismissed as withdrawn. 4. We have heard the rival submissions and perused the materials available on record. The assessee is engaged in publishing and printing academic and non-academic books, trading imported books from Associated Enterprises (AEs) and providing business support services to its AEs. During the FY 2021-22, assessee entered into various....
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....he availability of reliable information, it seems that in respect of the aforesaid transactions, CMSUC has the least complex operations, appears to bear lesser share of risks when compared to CUPAIPL in respect of the subject transaction. Accordingly, the AE is selected as the tested party for the purpose of analyzing the said transactions. To review the arm's length nature of the above transactions, TNMM has been applied as the most appropriate method and NCPM as the PLI. Since the mark up of 5% earned by AE falls within the arm's length range of 1.41 % to 5.69%, the assessee company concluded that the international transaction in respect of payment of management support services fees of Rs.541,83,096 be at arm's length. 5. The ld TPO disregarded the submissions and documentary evidences placed on record and rejected the TNMM applied by the assessee. Instead, ld TPO applied "other method" without identifying any comparable uncontrolled transaction and proceeded to determine the ALP of payment of management support services fees at Rs. Nil and proposed the transfer pricing adjustment of Rs. 5,41,83,096. 6. The ld DRP, vide its directions u/s 144C(5) of the Act dated 09.12....
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....invited to paras 6 and 7 of the final assessment order at pg. 24. Ld. Counsel submitted that it is unambiguously accepted therein, that the additions made to returned income/loss is as per draft assessment order and that Ld. TPO's order giving effect to DRP directions is not received. 7. Ld. Counsel referring to section 144C(13), which also prescribes statutory time limit for completion of assessment submitted that it is well settled that even Hon'ble Courts cannot extend statutorily prescribed time limit and in present case time limit for completion of assessment has lapsed long back. The fact that impugned final assessment order is not in conformity with directions of DRP cannot be disputed. 8. Ld. Counsel submitted that though plain reading of section 144C itself makes it obvious that the impugned final order is invalid, null and void being not in conformity with express provisions of the Act and further that time for any corrective actions, if possible in law, has also lapsed, Appellant requests consideration of decision of coordinate bench of Hon'ble Tribunal in Global One India (P.) Ltd. vs DCIT, [2020] 182 ITD 355 (Delhi-Trib.). Ld. Counsel subm....
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....d by the Tribunal. 10. Ld. Counsel further submitted that assessee in the present case even better placed since till this day, TPO has not passed any order giving effect to ld. DRP's directions dated 20.09.2024. Consequently, impugned final Order continues to be NOT in conformity with DRP's directions. 11. Reliance is further placed on Hon'ble High Court of Karnataka's judgment in the case of PCIT vs. Flextronics Technologies (India) (P) Ltd. [2023] 459 ITR 493 (Karnataka) wherein Hon'ble High Court upheld the order of Hon'ble Tribunal quashing final assessment order which was not passed in conformity of DRP's directions. There also, similar to the case of assessee, assessing officer had not received order giving effect by transfer pricing officer within time and had proceeded to pass the final assessment order. 12. Thus, the impugned order deserves to be quashed being null and void and pass in violation of mandatory provisions of section 144C of the Act. 13. On the other hand the Ld. DR placing reliance on the following decisions submitted that failure on the part of the AO to incorporate direction given by the DRP in the final assessment order ....
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....Para 10 of its order which was subsequently upheld by Hon'ble Karnataka High Court in [2023] 459 ITR 493. Further, such request of the Department has been rejected by Hon'ble Courts in the following cases: a. Mis Software Paradigms Infotech Pvt. Ltd. vs ACIT, IT(TP)A No. 150/BANG/2014-Paras 3.2 to 5 b. M/s Olympus Medical Systems Pvt. Ltd. vs ACIT, ITA No. 873/DEL/2021- Paras 12 to 15 c. M/s. July Systems & Technologies Pvt. Ltd. vs DCIT, IT(TP)A No. 358/Bang/2016-Paras 14 to 17 d. Uber India Research and Development Pvt. Ltd. vs DCIT, ITA-TP No. 106/HYD/2022 - Paras 5 to 9 17. Ld. Counsel further submitted that if the Ld. DR's request is accepted then, not only will it be against the above line of judicial precedents but shall also be amounting to this Hon'ble Tribunal doing indirectly that which cannot be done directly viz., extension of statutorily prescribed time under section 144C(13) of the Act. Moreover, as coordinate Bench of this Hon'ble Tribunal noted in Global one (supra) when assessing officer has knowingly/ consciously not passed order in conformity with DRP directions, same cannot qualify as mistake appa....
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....is allowed as per Ground Nos. 1 and 2 raised by Assessee, the other grounds raised in appeal become academic and in the unlikely event of this Hon'ble Tribunal deciding Grounds 1 and 2 against the Appellant, it is respectfully prayed once again that Appellant may kindly be allowed opportunity to make oral and written submissions on grounds of appeal relating to merits of the matter. 21. Heard rival submissions, perused the orders of the authorities below and the submissions made before us. We find considerable merit in the submissions of the Ld. Counsel for the assessee that the final assessment order passed by the AO u/s. 143(3) r.w.s. 144C(3) r.w.s 144B of the Act dated 28.10.2024 without incorporating the directions of the DRP is bad in law and null and void for the reason that even as on today the TPO did not carry out any exercise and pass any order as directed by the DRP. Since the TPO did not pass any order as per the directions of the DRP till date, the Tribunal cannot extend the time limit for passing any such order by setting aside the order of the AO for incorporating any such order to be passed by the TPO in future. Therefore, respectfully following the dec....