TPO To Mandatorily Pass Order Determining Arm’s Length Pricing Within 60 Days: Madras High Court

TPO To Mandatorily Pass Order Determining Arm’s Length Pricing Within 60 Days: Madras High Court

Case: The Deputy Commissioner of Income Tax Versus Saint Gobain India Private Limited
Coram: Justice R.Mahadevan and Justice J.Sathya Narayan Prasad
Case No.: Writ Appeal Nos. 1120, 1115, 1139, 1148, 1149, 2035, 2036, 2039, 2043 and 2066 of 2021 and CMP.Nos.7069, 7014, 7170, 7199, 7212, 12990, 12999, 13006, 13017 and 13070 of 2021
Court Observation:
It was held that the transfer pricing officer (TPO) must mandatorily pass the order determining arm’s length pricing within 60 days. It was stated that “…as per the proviso to Section 92CA (3A), if the time limit for the TPO to pass order is less than 60 days, then the remaining period shall be extended to 60 days. This implies that not only is the time frame mandatory, but also that the TPO has to pass an order within 60 days.”
The court said- “…for the reference to the TPO, the time limit for completing the assessment would only be 21 months from the end of the assessment year. It is only if a reference is pending, that the department gets another 12 months. Once a reference is made and after availing the benefit of the extended period to pass orders, the department cannot claim that the time limits are not mandatory.”
The court observed that “…when an order is passed on time, the procedures under 144C and 92CA(4) are to be followed. When the determination is not made in time, it cannot be relied upon by the assessing officer while concluding the assessment proceedings.”

TPO To Mandatorily Pass Order Determining Arm’s Length Pricing Within 60 Days: Madras High Court