The petitioner, a company incorporated under the Companies Act, 1956, seeks a writ of certiorari to quash and set aside a Transfer Pricing Order dated 31 st October, 2011, passed by respondent No.2 – Additional Commissioner of Income-tax, Transfer Pricing (hereinafter referred to as “the TPO”) to the extent that it relates to the addition of Rs. 84,34,39,52,555/- on account of two unreported international transactions and a Draft Assessment Order dated 29 th December, 2011, passed by respondent No.3–Assistant Commissioner of Income-tax (hereinafter referred to as the “AO” or “Assessing Officer”). The petitioner has also sought a writ of mandamus directing respondent No.3 – the AO to revise the Draft Assessment Order, after excluding the said transfer price adjustment. Lastly, the petitioner seeks a writ of prohibition, prohibiting the respondents from taking any steps pursuant to the impugned orders.
The two unreported transactions are the sale of the call centre business by the petitioner to Hutchison Whampoa Properties (India) Pvt. Ltd. and an alleged assignment of call options by the petitioner to Vodafone International Holdings B.V. The TPO determined the arm’s length price of these two unreported transactions suo moto in exercise of powers under sections 92CA(2A) and/or (2B) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”). The petitioner has challenged the jurisdiction of the TPO to determine the arm’s length price of these transactions on various grounds. The respondents, apart from denying this case, have contended that the Writ Petition is not maintainable on the ground that the petitioner has an alternate remedy under the provisions of the Income Tax Act, 1961, and on certain other grounds.
Held – Section 92CA(2A) which was inserted on 1.6.2011 to provide that the TPO can suo motu take cognizance of an un-referred international transaction is a substantive provision and cannot apply retrospectively to a reference made on 25.01.2010.