WNS GLOBAL SERVICES PRIVATE LIMITED ,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 14(1)(2), MUMBAI

This appeal by the assessee is directed against the final assessment order dated 28.01.2026 passed by the Assessing Officer under section 143(3) read with section 144C(13) of the Income-tax Act, 1961 (“the Act”), pursuant to the order dated 22.01.2025 passed by the Transfer Pricing Officer (“TPO”) under section 92CA(3) of the Act, for the assessment year 2022-23.

The assessee has raised multiple grounds. Ground No. 1(a) concerns procedural and jurisdictional matters. The learned Authorised

Ground Nos. 1(b) to 1(e) relate to the transfer pricing adjustment of ₹99,78,000 made in respect of the international transactions of rendering back-office/ITES services to the Associated Enterprises (“AEs”).

Briefly stated, the erstwhile WNS Information Services (India) Private Limited was engaged in rendering routine back-office support services to Mitsui O.S.K. Lines Limited, Japan and Ocean Network Express Pte. Limited, Singapore. Its business was acquired by the WNS Group with effect from 01.08.2021 and it was subsequently amalgamated with WNS Global Services Private Limited pursuant to the order of the National Company Law Tribunal dated 04.08.2022. Thus, during the previous year relevant to the present assessment year, the international transactions under consideration were carried on for four months, i.e., from 01.04.2021 to 31.07.2021.

The assessee had benchmarked these transactions under the Transactional Net Margin Method by adopting OP/OC as the profit level indicator (“PLI”) and reported an operating margin of 14.66%. The TPO rejected several comparables selected by the assessee and introduced other comparables. On the basis of the final set, the TPO determined the median margin at 18.09% and proposed an adjustment of ₹99,78,000. The Dispute Resolution Panel upheld the adjustment and the Assessing Officer made the addition in the final assessment order, assessing the total income at ₹8,34,29,590.

Before us, the learned AR submitted that the assessee had entered into a unilateral Advance Pricing Agreement (“APA”) with the Central Board of Direct Taxes on 01.07.2019 covering financial years 2015-16 to 2019-20. Under the APA, the arm’s length remuneration for the very 2

The learned AR further submitted that the apparent fall in the PLI to 14.66% was solely attributable to a credit/debit note of ₹50,76,400 relating to services rendered in earlier years. Drawing our attention to page 25 of the paper book, being Schedule 16 forming part of the accounts, the learned AR pointed out that the revenue of the current year was disclosed net of a debit note raised by the customer/deduction made for deficiency in services pertaining to earlier years. If this prior-period adjustment is excluded, the PLI for the relevant period works out to 16.40%, exactly the margin accepted under the APA. Reliance was placed on the judgment of the Hon’ble Delhi High Court in PCIT v. FIS Global Business Solutions India (P.) Ltd. [2025] 179 taxmann.com 157 (Delhi).

The learned Departmental Representative, on the other hand, relied upon the orders of the TPO, the DRP and the Assessing Officer. He submitted that the APA was confined to the specified years and could not, by itself, determine the arm’s length price for a subsequent year. He further submitted that the FAR profile of the year under consideration must first be examined and compared with the FAR profile of the years covered by the APA.

We have heard the rival submissions and perused the material available on record. The APA accepted a cost-plus mark-up of 16.40% for the same category of back-office/ITES services. The assessee claims that, for the four months involved in the present year, the identity of the AEs, the governing service agreements and the FAR profile remained

The Hon’ble Delhi High Court in PCIT v. FIS Global Business Solutions India (P.) Ltd. (supra) has approved the principle that, even where the year under dispute is not covered by the APA, the APA methodology may be adopted if the FAR remains the same. The relevant directions of the Tribunal, as reproduced and approved by the Hon’ble High Court, read as under:

In Ground No. 1(k), the assessee has contended that it had validly exercised the option for the concessional tax regime under section 115BAA of the Act by filing Form No. 10-IC within the prescribed time, but the benefit of the said provision was not granted. The learned AR reiterated the contention and requested that the Assessing Officer be directed to allow the applicable tax rate.

We consider it appropriate to restore this limited issue to the file of the Assessing Officer. The Assessing Officer shall verify whether the assessee had exercised the option under section 115BAA by filing Form No. 10-IC within the prescribed time and, upon being satisfied, compute 5

Ground No. 1(l), relating to the levy of interest under section 234C, is consequential. The Assessing Officer shall recompute the interest, if any, in accordance with law while giving effect to this order.

In the result, the appeal filed by the assessee is partly allowed for statistical purposes.