India: No transfer pricing referral, taxpayer claims no “international transactions”

India: No transfer pricing referral

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.

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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

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