|DATE:||(Date of pronouncement)|
|DATE:||March 2, 2011 (Date of publication)|
|Click here to download the judgement (pankaj_extrusion_DRP_TP_void.pdf)|
S. 144C order cannot be passed if no transfer pricing adjustments made by TPO
The TPO passed an order u/s 92CA (3) stating that the transactions with affiliated enterprises were at arms’ length and no transfer pricing adjustments were to be made. Pursuant to that the AO passed a draft assessment order u/s 144C. The assessee filed a Writ Petition to challenge the draft assessment order. HELD upholding the challenge:
U/s 144C(1) the AO has to pass a draft assessment order in the case of an “eligible assessee” which is defined in s. 144C(15)(i) to mean any person in whose case the variation from returned income arises as a consequence of the order of the TPO u/s 92CA(3). As no transfer pricing adjustments had been made by the TPO, the assessee was not an “eligible assessee” and the AO had no jurisdiction to pass the draft assessment order.