The Delhi High Court held that when the taxpayer raises an objection regarding the existence of “international transactions” (within the meaning of provisions of India’s tax law), the Assessing Officer must first address the taxpayer’s objection on its merits before referring the case to the Transfer Pricing Officer. An opportunity for the taxpayer’s claims to be heard is required by law.
The High Court also held that Instruction No.3 of 2016 (10 March 2016) that replaced Instruction 15/2015, specifically sets forth the procedure for the Assessing Officer to follow before making a reference of a transfer pricing case to the Transfer Pricing Officer. The 2016 instruction clarifies the correct legal procedure, and is to be applied retroactively (as in the instant case when the referral was made prior to March 2016).
The case is: Indorama Synthetics (India) Ltd. v. ADIT
Read an August 2016 report [PDF 313 KB] prepared by the KPMG member firm in India: Reference made by the Assessing Officer to Transfer Pricing Officer set aside, as no opportunity of being heard allowed by the Assessing Officer
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.