Plot No.ac7-Ac11, Sidco Industrial Estate, Thirumudivakkam, Chennai Tamil Nadu, India – 600 044 v. The Deputy Commissioner Of Income Tax, Transfer Pricing Officer – 1(1), 5[Th] Floor, Tower I, Bsnl Building

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM : THE HON'BLE MR. JUSTICE T.S. SIVAGNANAMAND THE HON'BLE MR. JUSTICE SATHI KUMAR SUKUMARA KURUP W.A.No.1963 of 2021andC.M.P.Nos.12745 & 12748 of 2021 M/s.Bonfiglioli Transmissions Private LimitedRepresented by the authorized signatory,Balaji G.A. Plot No.AC7-AC11, SIDCO Industrial Estate,Thirumudivakkam, ChennaiTamil Nadu, India – 600 044.... Appellant/PetitionerVs. 1.The Deputy Commissioner of Income Tax, Transfer Pricing Officer – 1(1), 5[th] Floor, Tower I, BSNL Building, No.16, Greams Road, Chennai – 600 006. 2.The Deputy/Assistant Commissioner of Income Tax, Corporate Circle 1(2), 121, Mahatma Gandhi Road, Nungambakkam, Chennai – 600 034. .. Respondents/Respondents Prayer : Writ Appeal filed under Clause 15 of the Letters Patentto set aside the order dated 02.06.2021 made in W.P.No.30606 of2018. Prayer in WP.No.30606 of 2018: Writ Petition filed under Article 226 of the Constitution ofIndia praying to issue a writ of certiorari, to call for therecords comprised in the impugned order bearing file No.B-105/TPO-1(1)A.Y.2015-16 dated October 30, 2018 made underSection 92CA(3) of the Income Tax Act, 1961 for the Assessmentyear 2015-16 on the file of the first respondent, quash the same. For Appellant : Mr.N.V.Balaji For Respondents: Mr.Hema Muralikrishnan Senior Standing Counsel https://hcservices.ecourts.gov.in/hcservices/ J U D G M E N T (Judgment was delivered by T.S. SIVAGNANAM, J.) This Writ Appeal by the writ petitioner is directed againstthe order dated 02.06.2021 made in W.P.No.30606 of 2018. 2.The appellant filed the writ petition challenging theorder passed by the 1[st] respondent, who is the Transfer PricingOfficer (“TPO” for brevity), who passed the order under Section92CA(3) of the Income Tax Act, 1961, (“the Act” for brevity),for the Assessment Year 2015-16. The principal ground on whichthe said order is put to challenge in the writ petition is bycontending that, though the assessee had placed reliance on thedecision of the Tribunal in the assessee's own case, wherein,identical issue was considered in I.T.A.No.2977/Chny/2017, dated14.05.2018, the TPO did not even refer to the said decision andmechanically passed the order dated 30.10.2018. Therefore, theappellant contended that judicial discipline would require theTPO to follow the earlier decision of the Tribunal in theassessee's own case and in support of such contention, reliancewas placed on the decision in the case of Union of India v.Kamlakshi Finance Corporation Ltd. reported in (1992) 1992taxmann.com 16 (SC) and other decisions for the saidproposition. 3.The learned Single Bench, taking note of the fact that, ifthe appellant was aggrieved by any of the observations made orfindings recorded by the TPO in his order dated 30.10.2018, theappellant/assessee has a remedy by approaching the DisputeResolution Panel (“DRP” for brevity), has observed that, withoutexhausting such a remedy, the writ petition would not bemaintainable. The appellant is before us contending that theorder passed by the TPO is an outcome of clear non-applicationof mind. Though the appellant/assessee had specifically pointedout about the order of the Tribunal, the TPO has not evenreferred to the said order and has virtually exercised hispowers and failed to follow the decision of the higherauthorities, which is binding on the TPO. 3.The learned Single Bench, taking note of the fact that, ifthe appellant was aggrieved by any of the observations made orfindings recorded by the TPO in his order dated 30.10.2018, theappellant/assessee has a remedy by approaching the DisputeResolution Panel (“DRP” for brevity), has observed that, withoutexhausting such a remedy, the writ petition would not bemaintainable. The appellant is before us contending that theorder passed by the TPO is an outcome of clear non-applicationof mind. Though the appellant/assessee had specifically pointedout about the order of the Tribunal, the TPO has not evenreferred to the said order and has virtually exercised hispowers and failed to follow the decision of the higherauthorities, which is binding on the TPO. 4.We are of the considered view that the TPO has passed theorder, dated 30.10.2018, pertaining to Assessment Year 2015-16,wherein, certain observations have been made with regard to theArms Length Price. Whether the said adjustment suggestion madein the order dated 30.10.2018 is sustainable on facts can verywell be examined by the DRP, which has been conferred withsufficient jurisdiction in terms of Section 144-C of the Act.Therefore, in our considered view, the appellant should notbypass the said remedy. That apart, we note that, as againstthe order passed by the Tribunal, which was referred to by the assessee before the TPO, which according to the assessee coversthe issue, the Revenue has filed a Tax Case Appeal before thisCourt in T.C.A.No.811 of 2018 and the said appeal has beenentertained and is pending since the year 2018. 5.Be that as it may, since each of the Assessment Year isseparate by itself, the assessee can very well agitate allissues before the DRP. It is true that, if identicaltransactions have been considered for the earlier AssessmentYears or for the subsequent Assessment Years, unless there arecogent reasons for the TPO/Assessing Officer to take a differentview, normally, the trend in which the assessment has been madewill not be upset or a different view will not be recorded. Inany event, all issues can very well be agitated by theappellant/assessee before the DRP. We find that, in the counteraffidavit filed by the respondent in the writ petition, certainfactual issues have been set out to sustain their contentionthat the decision of the Tribunal for the Assessment Year 2013-14 would not apply. There are also other averments madetouching upon the merits of the matter. The assessee has alsofiled a rejoinder affidavit to the counter affidavit. In theimpugned order, we also find that the learned Single Bench hasmade certain observations or recorded the submissions of theRevenue, touching upon the merits. In our considered view, ifthe appellant has to avail the remedy provided under Section144-C of the Act, before the DRP, then the Court would not bejustified in making any observation touching upon the merits ofthe assessment and all issues should be left open. 6.For all the above reasons, the Writ Appeal is dismissedand the order passed by the learned Single Bench is affirmed,giving liberty to the appellant/assessee to approach the DRP.No costs. Consequently, connected miscellaneous petitions areclosed. 7.The findings recorded by the learned Single Bench touchingupon the merits of the matter stand vacated and it will be opento the appellant to raise all factual and legal issues beforethe DRP, which shall be considered on merits and in accordancewith law. Sd/- Assistant Registrar(CO) //True Copy// Sub Assistant Registrar mkn https://hcservices.ecourts.gov.in/hcservices/ To 1.The Deputy Commissioner of Income Tax, Transfer Pricing Officer – 1(1), 5[th] Floor, Tower I, BSNL Building, No.16, Greams Road, Chennai – 600 006. 2.The Deputy/Assistant Commissioner of Income Tax, Corporate Circle 1(2), 121, Mahatma Gandhi Road, Nungambakkam, Chennai – 600 034. 7.The findings recorded by the learned Single Bench touchingupon the merits of the matter stand vacated and it will be opento the appellant to raise all factual and legal issues beforethe DRP, which shall be considered on merits and in accordancewith law. Sd/- Assistant Registrar(CO) //True Copy// Sub Assistant Registrar mkn https://hcservices.ecourts.gov.in/hcservices/ To 1.The Deputy Commissioner of Income Tax, Transfer Pricing Officer – 1(1), 5[th] Floor, Tower I, BSNL Building, No.16, Greams Road, Chennai – 600 006. 2.The Deputy/Assistant Commissioner of Income Tax, Corporate Circle 1(2), 121, Mahatma Gandhi Road, Nungambakkam, Chennai – 600 034. +1cc to M/s.Hema Muralikrishnan, Advocate, S.R.No.40864+1cc to Mr.N.V.Balaji, Advocate, S.R.No.41149 SRA(CO)CB(08/09/2021) W.A.No.1963 of 2021