J P MORGAN SERVICES INDIA PVT LTD,MUMBAI V. DCIT CIRCLE 2(2)(1), MUMBAI

ITA 6563/MUM/2024

AI Insights

The case involves J P Morgan Services India Private Limited appealing against the final assessment order for the assessment year 2021-22, which was passed under various sections of the Income Tax Act, 1961, following directions from the Dispute Resolution Panel. The primary issues revolved around the timeliness and validity of the assessment order and DRP directions, and adjustments related to transfer pricing for IT and ITeS services provided to associated enterprises. The tribunal's decision addressed procedural concerns about the timing of the assessment and DRP directions, and substantive issues regarding transfer pricing were largely resolved through the APA with the CBDT.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772803 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2021-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NEENA JEPH
• Assessee Lawyers: FENIL BHATT
• Keywords: Transfer pricing; International transaction; Period of limitation; Rectification of order; Initiation of penalty proceedings; Time period of passing order
• Section: 143(3); 234B; 92D

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “K” BENCH, MUMBAI BEFORE SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No.6563/MUM/2024 (Assessment Year : 2021-22) J P Morgan Services India Private Limited Tower A Blk 9, Tower B Blk 10, Tower C Blk 11, Nirlon Knowledge Park, Western Express Highway, Goregaon East, Mumbai Suburban, 400063. PAN : AABCD0503B ............... Appellant v/s Deputy Commissioner of Income-tax, Circle 2(2)(1), Aayakar Bhawan, Maharshi Karve Road, New Marine Lines, Churchgate, Mumbai-400020. ……………… Respondent Assessee by : Shri Fenil Bhatt Revenue by : Ms. Neena Jeph, CIT.DR Date of Hearing – 25/08/2025 Date of Order - 26/08/2025 O R D E R PER SANDEEP SINGH KARHAIL, J.M. The assessee has filed the present appeal against the final assessment order dated 17.10.2024, passed under section 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income Tax Act, 1961 (“the Act”) pursuant to the directions dated 25.09.2024 issued by the Dispute Resolution Panel-1, Mumbai (“learned DRP”) under section 144C(5) of the Act, for the assessment year 2021-22. 2. In this appeal, the assessee has raised the following grounds: - Printed from counselvise.com ITA No.6563/Mum/2024 (A.Y. 2021-22) 2 “1. On facts and in the circumstances of the case & in law, the final assessment order ('final order') passed under section 143(3) r.w.s. 144C(13) read with section 144B of the Act dated 17 October 2024 by Assessment Unit, National Faceless Assessment Centre, Income Tax Department ('Ld. AO') and directions issued under section 144C(5) of the Act dated 25 September 2024 by the Hon'ble Dispute Resolution Panel ('Hon'ble DRP'), to the extent prejudicial to the Appellant, is erroneous and bad in law. 2. On the facts and in the circumstances of the case and in law, the final assessment order dated 17 October 2024, passed by the Ld. AO under section 143(3) read with section 144C(13) of the Act, having been passed beyond the limitation period provided in terms of section 153 of the Act, is void-ab-initio, illegal and bad in law and is therefore, liable to be quashed. 3. On the facts and circumstances of the case and in law, the DRP Directions dated 25 September 2024 having been passed beyond the due date prescribed under sub-section (12) of Section 144C are time barred; rendering the same and the consequential final assessment order dated 17 October 2024 invalid, illegal and bad in law and are therefore, liable to be quashed. 4. On the facts and circumstances of the case and in law, the DRP Directions dated 25 September having not been communicated to the Appellant until the date of final assessment order i.e. 17 October 2024, are time barred in terms of Section 144C(12) and 144C(13) r.w. Rule 11 of the Income-tax (Dispute Resolution Panel) Rules, 2009; rendering the same and the consequential final assessment order dated 17 October 2024 invalid, illegal and bad in law and are therefore, liable to be quashed. 5. On the facts and in the circumstances of the case and in law, the Hon'ble DRP erred in confirming the action of the Ld. AO and the Office of Deputy Commissioner of Income Tax, Transfer Pricing DC/ACIT TP 2(3)(1) ('Ld. TPO') and making an adjustment of INR 8,173,090,919/- in relation to the international transaction of provision of back office support services in the nature of information technology ('IT\") Support Services and IT enabled services ('ITeS') to the associated enterprises. 6. On the facts and in the circumstances of the case and in law, the Ld. AO/ Ld. TPO/Hon'ble DRE erred in law and in facts by: a) rejecting the TP Study maintained by the Appellant under Section 92D of the Act in good faith and with due diligence; b) rejecting the economic analysis undertaken by the Appellant in the TP Study maintained under section 92D of the Act read with Rule 100 of the Income-tax Rules, 1962 ('the Rules') on the basis that the Appellant did not apply appropriate filters and accordingly contended that the data used in computation of arm's length price is not reliable or correct; c) conducting a fresh economic analysis by using data which is non- contemporaneous and against the principles contained under Rule 10D of the Rules. Printed from counselvise.com ITA No.6563/Mum/2024 (A.Y. 2021-22) 3 7. On the facts and in the circumstances of the case and in law, the Ld. AO/ Ld. TPO/Hon'ble DRP erred in conducting a fresh comparability analysis by way of: a) rejection of the filters applied by the Appellant and consequent rejection of comparable companies in the TP Study: b) application of new/modified filters and rejection of comparable companies of the Appellant. 8. On the facts and in the circumstances of the case and in law, the Ld. AO/ Ld. TPO/Hon'ble DRP erred in not excluding certain companies from the final set of comparable(s), which are functionally dissimilar to the Appellant's international transaction of provision of back office support services in the nature of IT Support services and IT enabled services. 9. On the facts and in the circumstances of the case and in law, the Ld. AO/ Ld. TPO/Hon'ble DRP erred in not including certain companies in the final set of comparable(s), which are functionally similar to the Appellant's international transaction of provision of back-office support services in the nature of IT Support services and IT enabled services. 10. On the facts and circumstances of the case and in law, the Ld.AO/Ld. TPO/Hon'ble DRP erred in not allowing/granting the working capital adjustment. 11. On the facts and circumstances of the case and in law, the Ld.AO/Ld. TPO/Hon'ble DRP erred in not allowing/granting the risk adjustments. 12. On the facts and circumstances of the case and in law, the Ld.AO/Ld. TPO/Hon'ble DRP erred in ignoring the terms of the Original BAPA signed with Central Board of Direct Taxes ('CBDT) for FY 2014-15 to FY 2018-19 inter-alia covering the impugned transactions in the nature of provision of back-office support in the nature of IT and ITeS without appreciating the uncontested fact that Functions, Assets and Risks of the Appellant vis-à-vis the said international transaction for the relevant AY is same as earlier concluded APA. 13. On the facts and in the circumstances of case and in law, Ld.AO/Ld. TPO/Hon'ble DRP erred in not taking cognizance of the Mutual Agreement Procedure ('MAP') for AY 2006-07 to AY 2014-15 concluded in Appellant's own case having similar set-of facts, pricing policy and assumptions. 14. On the facts and in the circumstances of case and in law, the Ld. AO erred in not considering the rectification order passed by Centralised Processing Centre ('CPC) while computing the assessed income in the final order dated 17 October 2024. 15. On the facts and in the circumstances of the case, the Id.AO has erred in levying interest under section 234A of the Act. 16. On the facts and in the circumstances of the case, the Ld.AO has erred in levying interest under section 234B of the Act. Printed from counselvise.com ITA No.6563/Mum/2024 (A.Y. 2021-22) 4 17. On the facts and in the circumstances of the case, the Ld.AO has erred in levying interest under section 234C of the Act. 18. On the facts and in the circumstances of the case and in law, the Ld. AO has erred in initiating penalty proceedings under Section 270A(9) (f) of the Act. 19. On the facts and in the circumstances of the case and in law, the Ld. AO has erred in initiating penalty proceedings under section 271AA(1)(ii) of the Act.” 3. Ground no.1 is general in nature. Therefore, the same needs no specific adjudication. 4. Ground no.2, raised in assessee’s appeal, challenging the impugned final assessment order on the basis that the same is beyond the limitation period provided in terms of section 153 of the Act, was not pressed by the learned Authorised Representative (“learned AR”) during the hearing. Accordingly, the same is kept open. 5. Similarly, grounds no.3 and 4, raised in the assessee’s appeal, challenging the directions issued by the learned DRP as being time-barred, were not pressed during the hearing. Accordingly, grounds no. 3 and 4 are kept open. 6. During the hearing, the learned AR referred to the letter dated 12.08.2025 filed by the assessee seeking withdrawal of the grounds no. 5 - 13, raised in assessee’s appeal, pertaining to transfer pricing adjustment in view of the Advance Pricing Agreement (“APA”) entered with the CBDT, which also covers the year under consideration. In the afore-noted letter, the assessee submits that since the APA agreement signed between the CBDT and the assessee covers the pricing of the international transaction relating to the Printed from counselvise.com ITA No.6563/Mum/2024 (A.Y. 2021-22) 5 Provision of IT Support Services and ITeS, it wishes to suo-moto withdraw grounds no. 5 - 13 pertaining to the transfer pricing adjustment. Accordingly, in view of the above, grounds no. 5 - 13 raised in assessee’s appeal are dismissed as withdrawn. 7. Ground no.14, raised in assessee’s appeal, was not pressed on the basis that, pursuant to the rectification order, the relief has been granted to the assessee. Accordingly, ground no.14 is dismissed as not pressed. 8. Grounds no. 15-17, raised in assessee’s appeal, pertain to the levy of interest under sections 234A, 234B and 234C of the Act, which is consequential in nature. Therefore, the same need no separate adjudication. 9. Grounds no. 18-19, raised in assessee’s appeal, pertain to the initiation of penalty proceedings under section 270A(9)(f) and section 271AA(1)(ii) of the Act, which are premature in nature. Therefore, the said grounds are dismissed. 10. In the result, the appeal by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 26/08/2025 Sd/- GIRISH AGRAWAL ACCOUNTANT MEMBER Sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 26/08/2025 Anandi.Nambi, Steno Printed from counselvise.com ITA No.6563/Mum/2024 (A.Y. 2021-22) 6 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order Assistant Registrar ITAT, Mumbai Printed from counselvise.com "