LOCONAV INDIA PVT LTD vs. ASSESSMENT UNIT INCOME TAX DEPARTMENT DELHI AND ANR

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W.P.(C)/3416/2025HC DelhiDLHC01014067202513 May 2025Bench: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE MR. JUSTICE TEJAS KARIA2 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court held that the impugned order dated 29.01.2025 passed by the learned TPO under Section 92CA(3) of the Income Tax Act, 1961, for AY 2022-23 was set aside. The Court also set aside the draft assessment order dated 19.02.2025, which was premised on the TPO's order. The matter was remanded to the TPO for fresh consideration, taking into account the reply furnished by the petitioner to the show-cause notice dated 09.01.2025. The TPO was directed to pass a fresh order within a period of four weeks from the date of the order. The Assessing Officer (AO) was to pass a draft assessment order thereafter. The ratio decidendi is that an authority must consider all submissions made by an assessee before passing an order, and failure to do so warrants setting aside the order and remanding the matter for fresh adjudication.

What were the facts?

The petitioner, Loconav India Pvt Ltd, filed a writ petition challenging an order dated 29.01.2025 passed under Section 92CA(3) of the Income Tax Act, 1961, and a consequent draft assessment order under Section 144C(1) for Assessment Year 2022-23. The petitioner contended that the Transfer Pricing Officer (TPO) passed the impugned order without considering their reply to a show-cause notice. The petitioner asserted that they had indeed filed a reply dated 23.01.2025 addressing all issues raised by the TPO, contrary to the TPO's observation that no reply was furnished in some aspects. The Revenue, through its counsel, conceded that the impugned order could be set aside and the matter remanded.

What were the issues?

1. Whether the learned Transfer Pricing Officer (TPO) erred in passing an order under Section 92CA(3) of the Income Tax Act, 1961, without considering the petitioner's reply to the show-cause notice dated 09.01.2025 for Assessment Year 2022-23? Assessee's Contention: The petitioner argued that the TPO's finding that no reply was furnished was factually incorrect, as a comprehensive reply dated 23.01.2025 was submitted addressing all points raised in the show-cause notice. The petitioner relied on the principle that assessment orders must be based on a consideration of all material placed before the authority. Revenue's Contention: The learned counsel for the Revenue fairly stated that the impugned order could be set aside and the matter remanded to the TPO for fresh consideration in light of the petitioner's reply.

Which sections of the Income-tax Act were involved?

Section 92CA(3),Section 144C(1)

AI-generated summary — verify with the full judgment below

$~3 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 3416/2025 and CM APPL. 16096/2025 LOCONAV INDIA PVT LTD .....Petitioner Through: Ms Ananya Kapoor, Advocate. versus ASSESSMENT UNIT INCOME TAX DEPARTMENT DELHI AND ANR .....Respondents Through: Mr Apoorv Aggarwal, JSC. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE TEJAS KARIA O R D E R % 13.05.2025 1. The petitioner has filed the present petition impugning an order dated 29.01.2025 [impugned order] passed under Section 92CA(3) of the Income Tax Act, 1961 [the Act] as well as the draft assessment order issued pursuant thereto under Section 144C(1) of the Act in respect of Assessment Year [AY] 2022-23. 2. It is the petitioner’s case that the impugned order was passed by the learned Transfer Pricing Officer [TPO] without considering the petitioner’s reply. It is pointed out that the impugned order records that in some aspects no reply has been furnished by the petitioner, however, the same is concededly erroneous as the petitioner had filed a reply dated 23.01.2025 to the show-cause notice dated 09.01.2025 issued by the learned TPO addressing all issues as raised in the said notice. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 22:32:31

3.

After some arguments, the learned counsel appearing for the Revenue fairly states that the impugned order may be set aside and the matter be remanded to the TPO to consider afresh in the light of the reply filed by the petitioner to the show-cause notice dated 09.01.2025. 4. In view of the above, the impugned order dated 29.01.2025 passed by the learned TPO under Section 92CA(3) of the Act for AY 2022-23 is set aside and the matter is remanded to the AO for considering afresh bearing in mind the reply furnished by the petitioner to the show-cause notice dated 09.01.2025. Consequently, draft assessment order dated 19.02.2025 for AY 2022-23, which is premised on the learned TPO’s order dated 29.01.2025, is also set aside. The learned TPO shall pass a fresh order within a period of four weeks from date. The AO shall pass a draft assessment order thereafter. 5. The appeal is disposed of in the aforesaid terms. Pending application is also disposed of. VIBHU BAKHRU, J TEJAS KARIA, J MAY 13, 2025/tr Click here to check corrigendum, if any This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 22:32:31

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