IHG IT Services (India) Pvt. Ltd Vs DCIT (ITAT Delhi)
Income Tax Appellate Tribunal (ITAT), Delhi Bench, has nullified the assessment order issued against IHG IT Services (India) Pvt. Ltd. for the assessment year 2010-11. The Tribunal’s decision, pronounced on November 30, 2015, hinged on a critical procedural flaw: the final assessment order was passed beyond the statutory time limit stipulated under Section 144C(13) of the Income-tax Act, 1961. This ruling underscores the imperative for tax authorities to adhere strictly to prescribed timelines in assessment proceedings.
Background of the Dispute
IHG IT Services (India) Pvt. Ltd., a wholly-owned subsidiary of Intercontinental Hotels Group (Asia Pacific) Pte Ltd, Singapore, operates as a Special Technology Park (STP) unit, primarily engaged in providing back-office accounting support and IT-enabled services. For the assessment year 2010-11, the company filed its income tax return on September 30, 2010, declaring an income of INR 4,00,031 under normal provisions and INR 5,62,61,355 as per Section 115JB (Minimum Alternate Tax).
The case was subsequently selected for scrutiny. During the assessment proceedings, the Assessing Officer (AO) identified international transactions totaling INR 49,05,94,612. Consequently, the matter was referred to the Transfer Pricing Officer (TPO) for the determination of the Arm’s Length Price (ALP) of these transactions, as mandated by transfer pricing regulations.
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