The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has quashed the order passed by Transfer Pricing Officer (TPO) under Section 92CA(3) of the Income Tax Act against Frost and Sullivan on the ground of limitation.
In this case the transfer pricing order dated 30 01 2014 was passed by the TPO under provisions of section 92CA (3) of the Income Tax Act. 1961(ITA) being barred by law of limitation in light of provisions of Section 92CA(3A) read with Section 153 of the Income Tax Act against the assessee Frost & Sullivan (India) Private Limited.
Madhur Agrawal who appeared on behalf of the assessee submitted that impugned transfer pricing order dated 30-01-2014 passed by the TPO under provision of Section 92CA(3) of the Income Tax Act was barred by law of limitation in light of provision of Section 92CA(3A) read with Section 153 of the Income Tax Act and was therefore, bad in law and illegal.
He also submitted that consequently the entire transfer pricing adjustment arising out of -ach order was bad in law and needed to be quashed. He relied heavily upon the judgement of Madras High Court in the case of Pfizer Healthcare India Pvt. Ltd. vs. JCIT (2021) and the decision of the Mumbai Tribunal in the case of Atos India Pvt. Ltd.
Rajneesh Yadav, appeared on behalf of the revenue.
The two-member Bench of Amit Shukla, (Judicial Member) and Gagan Goyal, (Accountant Member) observed that the order under Section 92CA(3) of the Income Tax Act had been passed by the TPO on 30/01/2014 in view of Section 92CA(3) of the Income Tax Act , the time limit to pass the order was 29/01/2014 which was evident from the aforesaid chronology of events. The AO was required to pass final order on or before 31/03/2014 which here in this case it was passed on 31/12/2014
Referring to the decision of Madras High Court in Pfizer Healthcare India Pvt. Ltd which held that, “TPO order has been passed on 30/01/2014 which is clearly barred by limitation by one day by virtue of time limit provided u/s.92CA (3) and consequently, the same has to be treated as bad in law and the same is hereby quashed. Thus, in such a situation, if there is no TPO order, consequently the entire transfer pricing adjustment proposed by the ld. TPO in international transactions becomes non-est and to be quashed and being barred by limitation.” The Bench quashed the final assessment order being barred by period of limitation under Section 92CA (3) of the Income Tax Act 1961.
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