TaxTMI 
TaxTMI 
2026 (7) TMI 679
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....e of Rs. 93,94,25,120/-. As per the documents furnished for the A.Y. 2022-23, it is noticed that the assessee has entered into International Transactions with its Associated Enterprises (AEs). A reference to Transfer Pricing Officer (in short 'TPO'), therefore, was made under section 92CA of the Act on 23.11.2023. During the Financial Year 2021-22, assessee provided SWD services for a consideration of Rs. 672,31,66,146/- and MSS for a consideration of Rs. 3,89,36,345/-. The assessee in its TP study report, adopted Transaction Net Margin Method (TNMM), and after appropriate bench marking, arrived at the conclusion that the transactions are at arm's length. The case was selected for complete scrutiny under Computer-Assisted Scrutiny Selection (CASS) and notice under sections 143(2) and 142(1) of the Act were issued and served on various dates. Thereafter, a show cause notice on 19.12.2024 was issued to the assessee. The assessee submitted the objections for show cause notice on 09.01.2025. In the transfer pricing study report of the assessee it was noticed that assessee has determined the Arm's Length Price (ALP) of the international transactions by applying TNMM as the most appropri....
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....ft Assessment Order dated 19.03.2025. 8. On being aggrieved by the Final Assessment Order passed by the learned AO without adhering to the directions of the DRP, the assessee is in appeal before us by raising the following grounds: 1. On facts, circumstances of the case, and in law, the order u/s. 143(3) r. w.s. 144C(13) r. w. s. 144B of the Act dated 24 December 2025 issued by the learned AO, to the extent prejudicial to the Appellant, is bad in law, contrary to the facts and circumstances of the case, and is liable to be quashed. 2. On facts, circumstances of the case, and in law, the order u/s. 143(3) r. w.s. 144C(13) r. w. s. 144B of the Act dated 24 December 2025 issued by the learned AO is not in conformity with the directions of the learned Panel dated 20 December 2025 and hence, liable to be quashed as void-ab-initio. 3. On facts, circumstances of the case, and in law, the learned AO / TPO erred in making a transfer pricing ('TP') adjustment of INR 422,851,810 towards software development ('SWD') services segment, INR 1,215,917 towards marketing and sales support services ('MSS') segment and INR 31,962,582 towards interest on delayed receivable....
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.... d) Web Element Solutions Ltd e) R Systems International Ltd - Information technology services f) Sasken Technologies Ltd 4.8. excluding the following companies additionally identified from the search process of the learned TPO even though they are functionally comparable to the SWD services segment of the Appellant and pass all the filters applied by the learned TPO: a) Hurix Systems Private Limited b) Orchasp Ltd. c) Toxsl Technologies Private Limited d) Kireeti Soft Technologies Ltd. e) Batchmaster Software Private Limited f) Data Collection Infotech (India) Private Limited (Tax effect: INR 106,423,344) 4.9. including the following companies even though they fail the test of comparability for the MSS segment of the Appellant: a) FCB Interface Communications Pvt. Ltd. b) Quantum Consumer Solutions Pvt. Ltd. c) Affle (India) Ltd. d) Bright Advertising Pvt. Ltd e) Third Eye Integrated Services Pvt. Ltd f) Pressman Advertising Ltd. g) Tam Media Research Pvt. Ltd. h) Axis My India Ltd. i) Value Notes Strategic Intel....
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....ect: INR 8,044,343) 6. On facts, circumstances of the case, and in law, the learned AO erred in serving notice u/s. 274 r. w. s. 270A of the Act and initiating penalty proceedings. 7. On the facts. circumstances of the case and in law, the learned AO erred in levying interest u/s. 234 B / C of the Act. The Appellant craves leave to add and / or alter, amend, rescind, modify the grounds herein below or produce further documents before or at the time of hearing of this Appeal. 9. At the outset, the learned AR submitted that the learned AO passed the Final Assessment Order dated 24.12.2025 without adhering to the directions of the learned DRP's order dated 20.12.2025. He therefore submitted that as per the provisions of section 144C(15) of the Act, the Assessment Order is liable to be quashed as void-ab-initio. On this issue, he relied on the following decisions: (i) PCIT vs Flextronics Technologies India P Ltd [459 ITR 493 (Karnataka)] (ii) PCIT vs VMWARE Software India P Ltd [ITA No 221/2023 (Karnataka)] affirmed by Hon'ble Apex Court vide order dt 14.11.2024 (SLP(C) Diary No 47414 of 2024). 10. Further, the learned AR also submitted that ju....
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....onics Technology India Ltd., reported in 148 taxmann.com 123, the Hon'ble High Court of Karnataka has held as follows: 3. Shri. T. Suryanarayana, learned Senior Advocate for the assessee submitted that under section 144C(10) of the Income-tax Act, 1961 ('IT Act' for short) every direction issued by the Dispute Resolution Panel ('DRP' for short) shall be binding on the Assessing Officer and under section 144C(13) the Assessing Officer is duty bound to pass the assessment order in conformity with the directions within one month from the end of the month in which such directions are received by the DRP. He argued that the Assessing Officer has recorded in the assessment order that on receipt of directions by the DRP, reference was made to Transfer Pricing Officer ('TPO' for short) for re-working the Arms Length Price (ALP). The Order Giving Effect (OGE) in respect of DRP's direction corrected with the TP adjustments were not received in time and the Assessing Officer has confirmed the draft assessment order and the same is in violation of section 144C. The ITAT has rightly set aside the said order. With these submissions, he prayed for dismissal of....