Appellate proceedings not a substitute for original proceedings by TPO
THE Transfer Pricing (TP), within the fold of international taxation, is fast emerging as a major chapter in the Indian Income Tax Act. The first ever case that had reached through the writ-route to the High Court-level had gone in favour of the Revenue vide Sony India case (). But the second case decided by the Delhi High Court last Friday has gone against them. And the entire issue was fought by legal luminaries from both sides on the basic issue of granting oral hearing. Albeit it may sound too simple and tenuous, but it is indeed the most critical pillar for the globally-accepted edifice of natural justice.
While deciding a bunch of TP cases the High Court has held that vide the provisions of sub-section (3) of section 92CA, the legislature has clearly cast an obligation on the TPO to accord an oral hearing to the assessee. Going by the words of the statute, the grant of oral hearing by the TPO is mandatory.
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