UCWEB Mobile Private Limited Vs DCIT (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi, allowed the assessee’s appeals for Assessment Years 2017-18 and 2018-19 after holding that the Transfer Pricing Officer’s (TPO) order, which formed the basis of the transfer pricing adjustment, was released without authentication or a digital signature and was therefore invalid in law.
The dispute arose from a transfer pricing order under Section 92CA(3) of the Income Tax Act proposing adjustments of ₹82.28 crore in respect of benchmarking Advertisement, Marketing and Promotion (AMP) expenses and ₹2.72 crore relating to interest paid on Compulsorily Convertible Debentures (CCDs), aggregating to ₹85.00 crore. The Dispute Resolution Panel (DRP) rejected the assessee’s objections and upheld the TPO’s action, following which the National Faceless Assessment Centre passed the final assessment order under Sections 143(3), 144C(13), and 144B.
Before the Tribunal, the assessee challenged the validity of the transfer pricing order, contending that it was undated, unauthenticated, and did not bear the TPO’s digital signature. The Revenue argued that a signed copy had been sent to the assessee by registered post.
The Tribunal examined the record and found that no signed transfer pricing order had been placed before it. It also observed that the DRP’s reliance on the faceless assessment scheme introduced with effect from 1 April 2021 was not relevant because the impugned transfer pricing order had been released without authentication. The Tribunal held that the TPO had issued the order without any authentication, making it legally unsustainable and liable to be quashed.
