Flyjac Logistics Private Limited Vs DCIT (Bombay High Court)
Summary: The Bombay High Court considered a writ petition filed by Flyjac Logistics Private Limited challenging the order dated 20th March 2023 passed by the Transfer Pricing Officer under Section 92CA(3) of the Income Tax Act, 1961 for Assessment Year 2020-21. The principal challenge was that the mandatory Show Cause Notice contemplated under Section 92CA(3) read with Section 92C(3) had not been served before the Transfer Pricing Officer passed the impugned order, depriving the petitioner of an opportunity of being heard.
The petitioner’s case had been selected for scrutiny and the Assessing Officer referred it to the Transfer Pricing Officer under Section 92CA(1) for determination of the Arm’s Length Price of international transactions entered into with Associated Enterprises. The Transfer Pricing Officer issued notices under Section 92CA(2) seeking information, to which the petitioner responded. Thereafter, the Transfer Pricing Officer passed the impugned order under Section 92CA(3), proposing an adjustment of Rs. 20,16,01,089/- to the Arm’s Length Price of various international transactions. The order stated that a Show Cause Notice dated 28th February 2023 had been issued but that the petitioner had not responded.
Before the High Court, the petitioner submitted that the Show Cause Notice under Section 92C(3) was a statutory notice distinct from the earlier information notices issued under Section 92CA(2). According to the petitioner, the Show Cause Notice had neither been served nor uploaded on the Income-tax Portal, and its existence came to light only because it was referred to in the impugned Transfer Pricing Officer’s order. The petitioner also relied upon the respondents’ Affidavit-in-reply, which admitted that the Show Cause Notice had not been served by email because the email had bounced. The petitioner further pointed to a response from ‘efilingwebmanager’ stating that an unknown technical issue in the Department’s ITBA system had prevented the notice from appearing on the e-filing portal and had also prevented generation of the SMS.
