To ensure impartiality in adjudication of transfer pricing disputes, the Central Board of Direct Taxes (CBDT) has decided that commissioners associated with transfer pricing orders will not be part of the alternate dispute resolution panel. This panel is being set up by CBDT to resolve disputes arising from transfer pricing assessments.
Dispelling the apprehensions among senior tax professionals that the committee will be comprised predominantly senior officers who have powers to approve the transfer pricing assessments, CBDT chairman SSN Moorthy told that those commissioners associated with transfer pricing assessments will be kept out of the panel.
Dinesh Kanabar, tax leader, Pricewaterhouse, said: “There will not be any apprehension if officers associated with transfer pricing assessments are not part of the panel.” TP Ostwal, senior chartered accountant, who was a member of the transfer pricing committee, said the panel will be considered independent only if the officers associated with transfer pricing assessment are not included in the panel.
In all, eight panels are being set up in major cities in the country. The purpose is to quickly resolve disputes over transfer pricing assessments. The Union Budget had said that a collegium of commissioners would be established for resolving tax disputes between India’s tax authorities and multinational companies.
The rules for this were framed and subsequently announced in a recent notification. The panel’s decision is binding on the income-tax (IT) department that is not allowed to appeal against the order before the IT Appellate Tribunal. However, the tax payer is free to do so. The panel has the power to call for fresh evidence.