L&L Partners: A favourable Order at the High Court of Madras on limitation under Transfer Pricing

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L&L Partners,  tax team has recently secured a significant victory for its client, Perkins India Private Limited (part of the Caterpillar Group), before the Hon’ble High Court of Madras. The Firm has successfully defended a writ appeal filed by the income tax department before the division bench of High Court, against the order of Single Judge. Revenue filed appeal before the Hon’ble High Court on the issue of limitation to pass the order by the transfer pricing officer. The issue before the High Court was on the manner of arriving at the time limit available with the transfer pricing officer, considering the outer time limit available with the assessing officer to pass the order. The High Court also examined the issue of whether time limit available with the transfer pricing officer to pass the order is ‘directory’ or ‘mandatory’ in nature. The taxpayers argued that the transfer pricing order was passed with a delay of 1 day and it is barred by limitation, whereas Revenue contended that the order was within the statutory limitation.

In a batch of 9 appeals, the Hon’ble Madras High Court analyzed various provisions of the Income tax Act, General Clauses Act and the Limitation Act and held that the order passed by the transfer pricing officer is barred by limitation. Accordingly, the writ appeal filed by the Revenue was dismissed.

..for all interested in a read, attached is a copy of the order.

The client is extremely happy with the outcome as Revenue was aggressively contesting that the order passed by the transfer pricing officer is valid. Since order passed by the transfer pricing officer is held to be barred by limitation, the transfer pricing additions made in the case of client of INR 115 crores (approx.) shall be deleted.

While lead matter in the batch was represented by Mr. Ajay Vohra, Senior Advocate (on behalf of Pfizer), Firm’s Tax Partner, Mr. Sumit Mangal argued on behalf of our client Perkins India Private Limited and supplemented the arguments. The arguments advanced by Mr. Sumit Mangal have been separately recorded in the order of Hon’ble High Court. The team working on the matter comprised of Mr. Sumit Mangal (Partner) and Mr. Mayank Aggarwal (Managing Associate).


This case is widely reported in the tax and legal circle. Some of the links are provided below:






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