Delhi High Court Quashes Draft IT Assessment Order Passed Before Upload Of Transfer Pricing Relief Order
The Delhi High Court has recently quashed a draft assessment order passed by the Faceless Assessing Officer (FAO) against Lindstrom Services India, after noting that it was issued without knowledge of the Court's order quashing transfer pricing, due to delay in uploading the High Court direction on its website.
The division bench of Justices Dinesh Mehta and Vinod Kumar clarified that while the FAO could not be faulted personally, an assessment order passed in ignorance of a subsisting High Court order cannot be allowed to stand.
For context, by an order dated February 6, the Delhi High Court had granted relief to the assessee in a transfer pricing–linked dispute, upon noting that the Transfer Pricing Officer relied on third-party agreements for benchmarking, but did not give Petitioner-taxpayer access to such material.
It had set aside the impugned transfer pricing order and directed the TPO to supply copies of the relied-upon agreements (with necessary redactions, if required) and thereafter proceed afresh in accordance with law.
Although the order was pronounced on February 6, it was uploaded on the High Court website only on February 10.
In the interregnum, the FAO proceeded to pass a draft assessment order under Section 144C of the Income Tax Act, 1961.
Aggrieved, the assessee once again approached the High Court.
Taking note of the sequence of events, the High Court observed, “we are of the view that due to communication gap or on account of the order being uploaded on 10.02.2026(Tuesday), the AO has passed the order for which he cannot be said to be at any fault. Therefore, the impugned order dated 10.02.2026 is hereby set aside.”
The plea was accordingly disposed of.
For Petitioner: Advocates Ananya Kapoor, Soumya Singh and Aanjul Dalela
For Respondent: Gaurav Gupta, SSC, Shivendra Singh and Yojit Pareek, JSCs and Advocaye Surya Jindal