Dabur Pharma Ltd. (now known as Fresenius Kabi Oncology Ltd.) Vs DCIT (ITAT Delhi)
In a significant ruling, the Income Tax Appellate Tribunal (ITAT) Delhi has quashed an assessment order against Dabur Pharma Ltd., citing it was passed beyond the statutory time limit stipulated under Section 144C(13) of the Income Tax Act, 1961. The decision, delivered on May 30, 2016, hinges on a strict interpretation of procedural timelines, rendering the merits of the tax dispute unaddressed.
The case originated from an appeal filed by Dabur Pharma Ltd. against an assessment order dated July 24, 2013, issued by the Assessing Officer (AO) under Section 143(3) read with Section 144C of the Act. The core of the appeal presented several grounds, with the most critical being the assertion that the AO’s order was barred by limitation. Other contentions related to the re-computation of the arm’s length price for international transactions, the applicability of the Transactional Net Margin Method (TNMM), issues with comparability analysis, and the benchmarking of interest on foreign loans.
Procedural History:
Dabur Pharma Ltd. filed its income tax return on November 17, 2006, declaring an income of Rs. 3,45,94,389/-. The case was subsequently selected for scrutiny due to foreign transactions totaling Rs. 5262.03 lacs, leading to a reference to the Transfer Pricing Officer (TPO). The TPO made an adjustment of Rs. 139.34 lacs to the arm’s length price via an order dated October 19, 2009.
