M/s. Cognizant Technology Solutions India Private Limited (as successor-ininterest of M/s. KBACE Technologies Private Limited) Vs ACIT (ITAT Chennai)
The assessee appealed against the assessment order dated 18.05.2023 passed under Sections 143(3) read with Sections 144C, 92CA and 254 of the Income-tax Act, challenging a transfer pricing adjustment of ₹83,07,240. The assessee primarily contended that the assessment order was barred by limitation and therefore liable to be quashed.
The assessee explained that KBACE Technologies Private Ltd., a wholly owned subsidiary of KBACE US engaged in Oracle consulting and ERP reporting, had merged with Cognizant Technology Solutions India Pvt. Ltd. with effect from 01.04.2018. Pursuant to an earlier order of the Tribunal dated 20.09.2019, the Assessing Officer (AO)/Transfer Pricing Officer (TPO) proposed an upward transfer pricing adjustment by rejecting certain comparable companies and adopting a single comparable. The Dispute Resolution Panel (DRP) upheld the AO/TPO’s approach.
The assessee argued that the DRP had issued its directions under Section 144C(5) on 01.12.2022. Under Section 144C(13), the AO was required to pass the final assessment order within one month from the end of the month in which the DRP’s directions were received. According to the assessee, the final order should have been passed on or before 31.01.2023. Instead, the AO issued a draft order on 27.02.2023 and passed the final assessment order only on 18.05.2023. The assessee relied on several judicial precedents, including the Delhi Tribunal’s decision in Adobe Systems India Pvt. Ltd., to contend that the assessment order was time-barred. Alternatively, the assessee argued that the order was also barred by the limitation prescribed under Section 153(3). The assessee additionally challenged the transfer pricing adjustment on merits and claimed credit for taxes already paid.
