+ W.p.(C) v. Assistant Commissioner Of Income-Tax Circle 22(2) Delhi & Ors

$~74 IN THE HIGH COURT OF DELHI AT NEW DELHI+W.P.(C) 17023/2024 and CM APPL. 72148/2024STEELCASE ASIA PACIFIC HOLDINGS INDIA PRIVATELIMITED.....PetitionerThrough:Mr Manuj Sabharwal with Mr DronaNegiandMrDevvratTiwari,Advocates.STEELCASE ASIA PACIFIC HOLDINGS INDIA PRIVATELIMITED.....PetitionerThrough:Mr Manuj Sabharwal with Mr DronaNegiandMrDevvratTiwari,Advocates.versusASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE 22(2)DELHI & ORS......RespondentsThrough:Mr Sunil Agarwal, SSC with MrShivanshBPandiya,MrViplavAcharya, Ms Priya Sarkar and MrUtkarsh Tiwari, Advocates.DELHI & ORS......RespondentsThrough:Mr Sunil Agarwal, SSC with MrShivanshBPandiya,MrViplavAcharya, Ms Priya Sarkar and MrUtkarsh Tiwari, Advocates. CORAM:HON'BLE THE ACTING CHIEF JUSTICEHON'BLE MR. JUSTICE TUSHAR RAO GEDELAO R D E R %12.12.2024 1.The petitioner has filed the present petition, inter alia, praying asunder: “a. Issue a writ in the nature of certiorari or mandamus or anyother appropriate writ(s), order(s), direction(s) setting asideimpugned order and impugned notice of demand both dated24.10.2024 passed/ issued by the Respondent No. 2 [AnnexureP-1(Colly.)];andimpugneddirectionsdated20.09.2024[Annexure P-2] issued by the Respondent No. 3.” 2.The petitioner filed its return for the assessment year (AY) 2021-22disclosing certain international transactions. The said return was picked upfor scrutiny and a notice under Section 143(2) of the Income Tax Act, 1961(hereafter the Act) was issued by the Assessing Officer (AO) which was followed by a notice date 11.10.2022 issued under Section 92CA(2) of theAct by respondent no.4 Transfer Pricing Officer (hereafter the TPO) as thereference was made to it for determining the arm’s length price (ALP) inrespect of the international transaction. 3.The TPO passed an order dated 30.10.2023 under Section 92CA(3) ofthe Act directing an upward adjustment of ₹8,12,99,944/- on account of the determination of ALP in respect of the international transaction. 4.In the meanwhile, the Central Processing Centre (CPC) issued anintimation under Section 143(1) of the Act, which according to the petitionerwas erroneous. Therefore, the petitioner filed an application for rectificationof the said intimation. 5.Taking into account the directions issued by the TPO, the AO passeda draft assessment order on 22.12.2023, which included making an upwardrevision of ₹8,12,99,944/- on account of transfer pricing adjustment as directed by the TPO. 6.The petitioner filed its objections to the draft assessment order beforerespondentno.3,DisputeResolutionPanel(DRP)on19.01.2024.Thereafter, the petitioner entered into an Advance Pricing Agreement (APA)on 27.03.2024.Undisputedly, the petitioner’s return was required to bemodified based on the APA.The petitioner also sent a letter dated09.09.2024 to the DRP requesting that the return as modified be consideredin view of the APA. 7.However, it appears that the petitioner’s request was not considered and the DRP passed an order dated 20.09.2024 under Section 144C(5) of theAct with the direction that the petitioner’s rectification application whichwas pending, be decided. 8.Thereafter, the petitioner filed an application for rectification of theorder dated 20.09.2024 passed by the DRP on the ground that it had enteredinto the APA and its modified return was not considered. 9.On 24.10.2024, the AO passed the final assessment order underSection 143(3) read with Section 144C of the Act and also issued a demandunder Section 156 of the Act for a sum of ₹18,95,88,680/-. 10.The petitioner is aggrieved by the said order dated 24.10.2024 as wellas by the intimation dated 29.11.2024, whereby the refund due to thepetitioner in respect of AY 2024-25 is proposed to be adjusted against ademand raised in respect of AY 2020-21 and AY 2021-22. 8.Thereafter, the petitioner filed an application for rectification of theorder dated 20.09.2024 passed by the DRP on the ground that it had enteredinto the APA and its modified return was not considered. 9.On 24.10.2024, the AO passed the final assessment order underSection 143(3) read with Section 144C of the Act and also issued a demandunder Section 156 of the Act for a sum of ₹18,95,88,680/-. 10.The petitioner is aggrieved by the said order dated 24.10.2024 as wellas by the intimation dated 29.11.2024, whereby the refund due to thepetitioner in respect of AY 2024-25 is proposed to be adjusted against ademand raised in respect of AY 2020-21 and AY 2021-22. 11.Mr Sunil Agarwal, learned counsel appearing for the Revenueconcedes, on instructions, that the petitioner’s modified return was requiredto be considered as the petitioner has entered into an APA. He furtherrequests that the matter be remanded to the concerned authorities fordeciding afresh. 12.In view of the above, the order dated 20.09.2024 passed by the DRPas well as the final assessment order dated 24.10.2024 passed by the AO isset aside. The matter is remanded to the TPO for considering afresh in lightof the APA entered into by the petitioner. Additionally, we direct that thepetitioner’s application for rectification dated 08.12.2023 be also considered. 13.We also consider it apposite to observe that as the final assessmentorder has been set aside, there is no question of adjusting any refund againstthe demand for AY 2020-21 and AY 2021-22 at the present stage. 14.The petition is disposed of in the aforesaid terms. Pending applicationalso stands disposed of. VIBHU BAKHRU, ACJ TUSHAR RAO GEDELA, JDECEMBER 12, 2024/trClick here to check corrigendum, if any