W.P. (C) No. 14079 of 2009

1. The petitioner by means of this writ petition has challenged the order dated October 23, 2009, passed by the Transfer Pricing Officer (TPO) u/s 92CA(3) of the Income Tax Act, 1961 determining the arms length price (ALP) in respect of international transaction for "representation services". On the basis of this order, the Assessing Officer has prepared a draft assessment order u/s 144C of the proposing to incorporate in the assessment order the addition made by the Transfer Pricing Officer in the computation of ALP of "representation services" transaction.

2. The grievance of the petitioner is that no proper opportunity was given to the petitioner and the petitioner was not confronted with the formula which is ultimately adopted by the Transfer Pricing Officer while fixing the ALP. In this behalf the submission of the petitioner is that though the petitioner was asked to furnish information and details with regard to the computation of the arms length price which the petitioner furnished from time to time and in its letter dated October 13, 2009, has stated that before disallowance with respect to the ongoing proceedings the petitioner be confronted/clarified etc., no such opportunity was given to the petitioner.

3. Further submission in this behalf is that the Transfer Pricing Officer in a unilateral manner and without confronting the petitioner on the necessity of adopting the basis which is followed in the order dated October 23, 2009, has made an addition of Rs. 41,95, 484 (rupees forty-one lakh ninety-five thousand four hundred and eighty-four), which according to the petitioner is not correct and in this manner the Transfer Pricing Officer has increased the price by almost 90 per cent.

4. Learned counsel for the petitioner has also relied upon the judgment of this Court in the case of Moser Baer India Ltd. Vs. The Additional Commissioner of Income Tax and Another, , wherein it has been held that Section 92CA(3) casts an obligation on the Transfer Pricing Officer (TPO) to afford a personal hearing to the petitioner before he proceeds to pass an order determining the arms length price, in terms of the special provision. He further submits that in that very judgment this Court has held that if such an opportunity is not afforded to the concerned assessee before determining the arms length price, such an order can be challenged by filing a writ petition under Article 226 of the Constitution

5. Mr. Sahni has appeared on advance notice and has produced a photocopy of the order/entries. These entries demonstrate that the petitioner was called by the Transfer Pricing Officer from time to time; he was asked to furnish certain information and make submission in that behalf. The impugned order has been passed thereafter. Therefore, it cannot be treated to be a case where opportunity of hearing was not afforded to the petitioner before passing an order. However, as noted above, the submission of the petitioner is that the petitioner was not confronted with the basis which the Transfer Pricing Officer adopted ultimately. We are of the opinion that such a plea can be taken by the petitioner by filing objections to the order of the Transfer Pricing Officer as well as draft order prepared by the Assessing Officer. After the draft order is framed by the Assessing Officer the assessee has remedy to approach the Dispute Resolution Panel provided u/s 144C of the. The said Dispute Resolution Panel, before considering the matter has to be guided by Sub-section (6) of Section 144C of thewhich reads as under:

(6) The Dispute Resolution Panel shall issue the directions referred to in Sub-section (5), after considering the following, namely:

(a) draft order;

(b) objections filed by the assessee;

(c) evidence furnished by the assessee;

(d) report, if any, of the Assessing Officer, Valuation Officer or Transfer Pricing Officer or any other authority.

(e) records relating to the draft order;

(f) evidence collected by, or caused to be caused to be made by it; and

(g) result of any enquiry made by, or caused to be made by, it.

6. Thus not only would the petitioner have opportunity to file objections, the evidence which is furnished by the assessee has also to be considered by the Dispute Resolution Panel before passing final orders.

7. The petitioner thus shall be entitled to raise all possible objections and along with that furnish necessary evidence as well to rebut the report of the Transfer Pricing Officer as draft assessment order. Since such a remedy is available to the petitioner, it is not necessary to go into this aspect in the present writ petition filed by the petitioner. We expect and hope that the Dispute Resolution Panel shall, positively, deal with the objections filed by the petitioner along with support evidence furnished by him to rebut the basis adopted by the Transfer Pricing Officer (TPO) to arrive at the arms length price (ALP) and thereafter only it shall pass speaking orders.

8. With these observations this writ petition is dismissed.