TPO Must Supply Copies of Relied-Upon Agreements Before Passing Transfer Pricing Order: Delhi HC Sets Aside Royalty Adjustment [Read Order]

The Delhi High Court has held that the Transfer Pricing Officer must give copies of the agreements which he is relying upon before passing a transfer pricing order under Section 92CA(3) of the Income Tax Act, 1961, and it set aside an order which was passed without giving those agreements to the assessee.

Lindstrom Services India Private Limited filed a writ petition challenging the order passed by the Transfer Pricing Officer under Section 92CA(3) of the Income Tax Act. The company argued that during the proceedings, the TPO issued a show cause notice dated 04.12.2025 and asked the petitioner to reply in relation to four agreements which were relied upon by him.

When the petitioner asked for copies of those agreements, the TPO refused and said that the Income Tax Act does not provide for giving such copies.

The petitioner’s counsel argued that without copies of the agreements, it cannot properly defend its case. They argued that the parties involved in the agreements, the nature of agreements and the activities involved can be different from business to business and also from country to country.

The petitioner said that without seeing the clauses of those agreements, it cannot file a proper reply, especially when the TPO was comparing royalty paid by the petitioner with royalty paid by so-called similar parties.

On the other side, the Revenue argued that the agreements are available on the “Royalty stat database” and the petitioner could have downloaded them. The Revenue also argued that the petitioner is only trying to buy time. It was also argued that whatever objections the petitioner wants to raise can be raised later before the Dispute Resolution Panel (DRP).

In reply, the petitioner argued that once the pricing is determined, it becomes binding on the Assessing Officer, and after that it will be very difficult for the petitioner to unsettle it even before the DRP. The petitioner also said it is not trying to delay and it will not mind if the Court fixes strict timelines for giving the agreements, filing reply and passing final order.

The Division Bench of Justice Dinesh Mehta and Justice Vinod Kumar observed that it is a settled law that an authority has to provide copies of documents relied upon. The court observed that there can be many types of agreements and factors like the nature of business, nature of transaction and goodwill of the parties.

The Revenue’s issue was that the petitioner had paid excess royalty. The court observed that unless the relied agreements are given to the petitioner, its right to defend will get affected.

In view of this, the High Court set aside the TPO order dated 05.01.2026, because it was passed without supplying the copies of the relied agreements. The court directed the TPO to supply copies of the agreements and allowed him to redact the names of parties to maintain confidentiality.

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