SC rejects I-T dept's appeal due to delay, emphasises impact on foreign investors

Coming down heavily on the income tax department over a 215-day delay in filing a tax appeal against Xerox India, Chief Justice DY Chandrachud refused to entertain the petition, saying this won't send across the right message to foreign investors who provide revenue and jobs in India.

“How can the Supreme Court condone a 215 days delay by the income tax department? What message will it send to the foreign investors, like see, Supreme Court is condoning such huge delays. Sorry that cannot be done," the CJI-led bench said, adding “foreign companies are working in India and provide revenues, jobs. What message they will get that SC is condoning the delay… there has to be some balance. Sorry."

In this case, Xerox India had moved the Income Tax Appellate Tribunal against the transfer pricing adjustments relating to the determination of arm's length price of expenditure incurred by it for advertisement, marketing and promotion of the brand of its associated enterprises in assessment year 2009-10. In October 2022, the tribunal had partly allowed its appeal and deleted some disallowance. In August last year, the HC upheld the tribunal's order.