Under India’s Income Tax Act, an appeal against an order of an Income Tax Appellate Tribunal can be made to the High Court if it is satisfied that the case involves a “substantial question of law”. In the 2018 case of Softbrands India Private Ltd., the Karnataka High Court held that issues relating to the selection of comparable data and criteria for comparability in benchmarking for transfer pricing purposes do not raise a “substantial question of law”. In the 2023 case of SAP Labs India Private Ltd., the Supreme Court reversed this decision. According to the Supreme Court, it is always open to a High Court in an appeal involving transfer pricing issues to examine on a case-by-case basis whether the transfer pricing rules have been complied with or not and whether there is any perversity in the findings made by the Tribunal in determining the arm’s length price of controlled transactions. This means that the determination of arm’s length price by the Income Tax Appellate Tribunal is not final and may be subject to judicial review by the High Court in an appeal under Section 260A of the Income Tax Act. Click here for translation ...