The assessee was an airline company providing for transportation of passengers, cargo and other allied services. The assessee was issued a notice u/s 142(1) of the Act and asked to submit details, documents, evidence, and explanation in respect of its international transactions, with the copy of order under section 92 CA (3) of the Act of the Transfer Pricing Officer proposing a transfer pricing adjustment. The assessee failed to present itself in front of the AO and sent a letter stating that it was undergoing insolvency proceedings hence, the assessment proceedings should be kept in abeyance. When determining an adjustment, the Assessing Officer/Transfer Pricing Officer benchmarked the domestic transactions of the Assessee against specific overseas transactions. Following that, the sum was added to the assessee’s overall income, and penalty proceedings were also started. The Assessing Officer passed a draft assessment order under section 143(3) read with section 144C(1) of the Act making the addition. The income computed under section 115JB of the Act, where the income under the normal provisions was considered for computing the assessee’s tax due, was less than the addition made by the Assessing Officer of Rs. 42,46,81,14,783.

The said order was challenged and it was held that the assessee (resolution professional) had failed to comply with the notices issued by the AO on account of the insolvency proceedings. Hence a last chance must be given to the assessee to present its case. However, since the exchequer had taken considerable time and effort to conduct the proceedings, the assessee was directed to pay costs of Rs. 25,000 in each appeal within 30 days and was further directed to be present from here on in the fresh proceedings. (AY.2016-17, 2017-18)