Matter remanded back to ITAT by HC for passing a speaking order in TP case.
Matter remanded back to ITAT by HC for passing a speaking order in TP case.
Assessee mfd. Decorative Trimming & Exported it. TPO made adjustment determining ALP of transaction of payment of carriage outward costs & volume discount at Nil. AO passed assessm't order. CIT(A) held, AO had not followed Sec.144 C & denied opportunity to assessee to approach DRP. Thus, order u/s 143(3) bad in law. On appeal Tribunal remanded it back to AO for denovo consideration. On appeal, HC remanded it back to ITAT to decide on merits.-000113
Facts in brief:
1. The assessee was a wholly owned subsidiary of 'C' International Corporation, USA and was engaged in the manufacture of Decorative Trimming, such as, Tie Backs, Tassels, Trimmings etc. and was a 100% Export Oriented Unit.
2. Since international transactions were involved in assessee's case, the matter was referred to the TPO, in order to compute the Arm's Length Price with the approval of the Commissioner. It appeared that the TPO had passed an order in terms of section 92CA(3).
3. In transfer pricing proceedings, the TPO made adjustment on account of determination of Arm's Length Price of transaction relating to payment of carriage outward costs and volume discount at Nil.
4. Assessing Officer passed an order under section 143(3), which included the regular assessment and the order of the TPO.
5. The assessment order was challenged by the assessee before the Commissioner (Appeals).
6. The Commissioner (Appeals) set aside the assessment order holding that the Assessing Officer had not followed the provisions of section 144 C thereby denying the opportunity to the appellant to approach the Dispute Resolution Panel, and, therefore the order under section 143(3) was bad in law.
7. The Tribunal remitted back the matter to the file of Ld. Assessing Officer for denovo consideration.
On appeal, HC held as under:
8. It was found from the arguments advanced by the appellant and the respondent that there was no scope for Tribunal to pass such a non-speaking order of remand, due to following reasons:
i) The order of assessment under section 143(3) was also in relation to the order passed by the TPO under section 92CA(3) and that was challenged before the Commissioner (Appeals), which was allowed in favour of the assessee. Against which, the department filed an appeal to the Tribunal, the scope of which was limited to that portion of the order of the Commissioner (Appeals) interfering with the entire order passed under section 143(3); in other words, it should be limited only to the order relatable to the order of the TPO.
ii) the core issue raised by the assessee is with regard to the order passed by the Assessing Officer under section 143(3) read with section 92CA(3); the contention of the assessee was that the requirement under section 144C (1) has not been followed and the Commissioner (Appeals) has accepted such a stand and in course of appeal it is for the Tribunal to consider the objection of the assessee in the light of the objection filed in relation to the non-compliance of section 144C. That aspect has not been considered by the Tribunal and therefore the question of law which is raised by the assessee ought to have considered by the Tribunal and there was no scope for passing a non-speaking remand order; and
iii) The Tribunal ought to have considered the scope of such appeal, the additional grounds raised and the objections of the assessee and should have given a ruling on the same.
iv) For the reasons stated above, it is held that the order of the Tribunal is a non-speaking order because the Tribunal has not considered the issue raised and objected by either side.
v) Hence, the order of the Tribunal is set aside and the matter is remanded to the Tribunal for passing fresh orders on merits.
Case Reference-India Trimmings (P.) Ltd. v. Assistant Commissioner of Income-tax, Co. Circle -IV(2
HIGH COURT OF MADRAS
