SHL (India) Private Limited Vs DCIT (Bombay High Court)
The Bombay High Court considered a writ petition filed under Article 226 challenging the final assessment order dated 6 April 2021, demand notice and penalty notice for AY 2017-18. The petitioner, SHL (India) Private Limited, an Indian company forming part of the SHL Group, UK, was primarily engaged in trading SHL products and providing assessment, consultancy and training services. It had reported international transactions with its Associated Enterprise, including payments towards support services charges. Following scrutiny under the Computer Assisted Scrutiny Scheme, the Assessing Officer referred the matter to the Transfer Pricing Officer, who passed an order dated 29 January 2021 proposing a transfer-pricing adjustment of Rs.10,74,54,337, treated as Nil by the petitioner. The National e-Assessment Centre thereafter sought the petitioner’s response and passed the final assessment order determining total income at Rs.11,75,86,087.
The petitioner contended that, since the transfer-pricing adjustment resulted in a variation prejudicial to an eligible assessee, Section 144C(1) of the Income-tax Act required the Assessing Officer to first pass and forward a draft assessment order. The assessee could thereafter accept the variation or file objections before the Dispute Resolution Panel (DRP) and the Assessing Officer under Section 144C(2). According to the petitioner, the final assessment could be completed only after the DRP issued directions under Section 144C(5). It was argued that bypassing this mandatory procedure constituted a jurisdictional error and an incurable illegality that could not be protected by Section 292B. The petitioner also contended that the assessment order dated 6 April 2021 was time-barred.
