Purushaindra Kumar Kaurav JUDGMENT
Purushaindra Kumar Kaurav, J.
1. The present writ petition, at the instance of the assessee, seeks to assail the impugned order dated 24 April 2021 passed under Section 144C read with Sections 143(3) and 144B of the Income Tax Act, 1961 ["Act"], whereby, the Assessing Officer ["AO"] made an adjustment of INR 25,58,68,79,196/-, to the total income of the assessee.
2. The brief facts, which are relevant to the present controversy reveal that the assessee is engaged in providing software and information technology enabled services. On 01 April 2016, the assessee's mobile security division got demerged into the Giesecke & Devrient MS India on a going concern basis. Both the assessee and Giesecke & Devrient MS India are the wholly owned subsidiaries of Giesecke & Devrient MS GmbH, a company incorporated in Germany. The assessee filed its Income Tax Return ["ITR"] for assessment year ["AY"] 2017-18 on 30 November 2017 declaring an income to the tune of INR 18,15,98,120/-. Thereafter, the assessee's case was picked up for scrutiny and notices under Sections 143(2) and 142(1) of the Act were issued to the assessee.
3. It may be noted that since the assessee had entered into international transactions during the relevant AY, which is also duly reflected in Form 3CEB filled by the assessee in accordance with Section 92E of the Act, therefore, a reference was made by the AO to the Transfer Pricing Officer ["TPO"] for determination of Arm's Length Price ["ALP"] of the said international transactions.
4. Thereafter, upon considering the reply of the assessee, the TPO passed an order under Section 92CA(3) of the Act on 31 January 2021 and vide this order, the TPO determined a transfer pricing adjustment of INR 25,58,68,79,196/-. However, on an even date, the TPO passed a rectified order and adjusted the ALP to the tune of INR 16,84,51,531/-. In the said rectified order, while determining the ALP, the TPO also suggested the AO to examine the taxability of the value of the "demerged business" of the assessee to the tune of INR 25,41,84,27,665/-.
5. Pursuant to the TPO order, on 24 April 2021, the AO passed the draft assessment order under Section 144C of the Act and computed the total adjustment of INR 25,58,68,79,196/-, which included the ALP of INR 16,84,51,531/- and INR 25,41,84,27,665/-. Aggrieved by the said order, the assessee approached this Court by way of the present writ petition, assailing the impugned order inter alia on the ground that the AO proceeded to make transfer pricing adjustment without considering the TPO order and donned the cap of the TPO itself while determining the ALP of the international transactions.
6. Learned counsel appearing on behalf of the assessee, submitted that the impugned order was liable to be set aside in light of the mandate of Section 92CA of the Act. He pointed out, while referring to the rectified order of the TPO, that the TPO has never determined the ALP of the international transactions by incorporating the demerger of the mobile security division of the assessee. Despite the order of the TPO, the AO, while passing the impugned order under Section