Case Law Details
Delhi High Court in the case of Messe Dusseldorf India Pvt. Ltd. (Taxpayer) [2010-TIOL- 74-HC-DEL-IT] dismissing a writ petition, held that in cases where a taxpayer has not been provided an opportunity of being heard by the Transfer Pricing Officer, the taxpayer is entitled to raise all objections and furnish necessary evidence to the Dispute Resolution Panel (DRP). The DRP has to pass speaking order after taking into consideration the objections filed and evidences furnished by the taxpayer, rebutting the basis adopted by the Transfer Pricing Officer.
Background
The Alternate Dispute Resolution (ADR) mechanism was introduced by Finance (No. 2) Act, 2009 in the form of Section 144C of the Indian Tax Law. The ADR is a fast-track mechanism to resolve the disputes of Indian taxpayers relating to transfer pricing issues and those of foreign companies. Under the ADR, in respect of certain taxpayers (which include those having transfer pricing disputes), the Tax Authority, instead of passing a final assessment order, has to pass a draft assessment order. The taxpayer is entitled to file objections against the draft assessment order before the DRP. The DRP, after evaluating the evidences and submissions of the taxpayer and the Tax Authority, would issue directions to the Tax Authority, either to confirm or reduce or enhance the variation proposed in the draft assessment order. The directions of the DRP are final insofar as the Tax Authority is concerned and the Tax Authority is bound to complete the assessment in conformity with the DRP’s directions.
Facts of the case
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