Hitachi Astemo Haryana Private Ltd. Vs DCIT (ITAT Delhi)
This appeal by the assessee was directed against the order of the Assessing Officer dated 30.03.2022 pursuant to the directions issued by the Dispute Resolution Panel (DRP) for Assessment Year 2018-19. The assessee challenged the final assessment order, principally contending that it was bad in law and void because it did not conform to the binding directions of the DRP.
The Transfer Pricing Officer (TPO) had passed an order under Section 92CA(3) of the Income-tax Act, 1961 on 27.07.2021, suggesting an upward adjustment in the Arm’s Length Price (ALP) of international transactions. The Assessing Officer thereafter passed a draft assessment order under Section 144C on 18.09.2021 incorporating the TPO’s recommendations. The assessee filed objections before the DRP, which passed its order under Section 144C(5) on 23.02.2022 and issued certain directions concerning the transfer pricing adjustments.
Under Section 144C(13), the final assessment order was required to be passed within one month from the end of the month in which the DRP’s directions were received, i.e. by 31.03.2022. The AO passed the final assessment order on 30.03.2022. However, the DRP directions had not been incorporated because the TPO’s order giving effect to those directions had not been received by the AO when the assessment order was passed. The AO stated that the necessary modification would subsequently be made by rectification after receipt of the TPO’s order.
