2025 (7) TMI 1593 - HC - Income Tax

Validity of Show Cause Notice issued by the Respondent u/s 143(3) including any ongoing or subsequent assessment proceedings under the Act due to the lack of jurisdiction and expiry of period of limitation - petitioner submits that the Draft Assessment Order passed u/s 144C(1) of the Income Tax Act 1961 is not in conformity with the order passed by the Transfer Pricing Officer TPO in regard to the determination of the Arm s Length Price ALP of the International transaction. He submits that the Assessing Officer does not have any jurisdiction to determine the ALP and must necessarily pass orders in conformity with the decision of the TPO. As present petition seeking to travel beyond the order passed by the TPO and proposing transfer pricing adjustments which were not in conformity with the order passed by the TPO. HELD THAT - Concededly the petitioner has an equally efficacious remedy to agitate the issue before the Dispute Resolution Panel (DRP) or avail appellate remedies before the Commissioner of Income Tax (Appeals). In view of the above we do not consider it apposite to entertain this petition. As submitted that the petitioner is also aggrieved by the order passed by the TPO and therefore he would be filing objections before the DRP. We also consider it apposite to clarify that in the event the petitioner files its objections against the draft assessment order before the DRP the DRP shall consider the same on merits inter alia bearing in mind the decision of this Court in M/s Giesecke and Devrient India Pvt. Ltd. 2024 (4) TMI 145 - DELHI HIGH COURT As clarified that all rights and contentions of the petitioner are reserved.

Summary

The Delhi High Court, through Justices Vibhu Bakhr and Tejas Karia, dismissed the writ petition challenging the Show Cause Notice dated 27.05.2025 issued under Section 143(3) of the Income Tax Act, 1961 for Assessment Year 2020-21. The petitioner contended that the Assessing Officer (AO) lacked jurisdiction to determine the Arm's Length Price (ALP) and must conform to the Transfer Pricing Officer's (TPO) order under Section 144C(1), asserting that the AO's draft assessment order improperly proposed transfer pricing adjustments beyond the TPO's determination. The Court noted the petitioner's remedy before the Dispute Resolution Panel (DRP) and appellate authorities, holding that the writ petition was not maintainable. The Court emphasized that if objections are filed before the DRP, they "shall consider the same on merits," referencing the precedent in *M/s Giesecke and Devrient India Pvt. Ltd. v. Deputy Commissioner of Income Tax*, Neutral Citation 2024: DHC: 2561-DB. The Court reserved all rights and contentions of the petitioner and disposed of the petition accordingly.