SUBEX LIMITED,BANGALORE vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-6(1)(1), BANGALORE

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ITTPA 884/BANG/2022Status: DisposedITAT Bangalore21 June 2023AY 2018-193 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal admitted the additional ground of appeal, finding that all necessary facts were on record and no fresh investigation was required, citing the Hon'ble Supreme Court's judgment in NTPC Vs. CIT. The Tribunal observed that there were variations in the figures mentioned in the show cause notice dated July 13, 2021, and the order passed under section 92CA(3) dated July 30, 2021. The Tribunal held that the TPO is duty-bound to pass an order in conformity with the show cause notice issued, after considering the assessee's reply. Consequently, the Tribunal remitted the entire issue back to the file of the TPO to pass orders in accordance with the show cause notice, after considering the assessee's reply. The Tribunal refrained from adjudicating on other grounds raised by the assessee on merits. The operative direction was to remand the issue to the TPO.

What were the facts?

The assessee, M/s. Subex Limited, filed an appeal against an order passed by the Assessing Officer (AO) under section 143(3) read with sections 144C(13) and 144B of the Income-tax Act, 1961, for the Assessment Year 2018-19. During the hearing, the assessee pressed only an additional ground of appeal, arguing that the transfer pricing order dated July 30, 2021, issued under section 92CA(3) of the Act, was void ab initio due to a lack of application of mind and violation of natural justice. The assessee contended that the Transfer Pricing Officer (TPO) passed the order without considering the facts, figures, and submissions pertaining to the appellant.

What were the issues?

1. Whether the transfer pricing order dated July 30, 2021, passed under section 92CA(3) of the Income-tax Act, 1961, is void ab initio for being passed without application of mind and in violation of the principles of natural justice, as argued by the assessee. Assessee's Contentions: - The transfer pricing order was passed without application of mind. - The order violated the principles of natural justice. - The TPO considered facts, figures, and submissions that did not pertain to the appellant. - The order passed under section 92CA(3) was not in accordance with the show cause notice issued to the assessee, citing variations in figures between the show cause notice dated July 13, 2021, and the final order dated July 30, 2021. - Relied on the judgment of NTPC Vs. CIT 229 ITR 383 (SC) for admitting the additional ground. Revenue's Contentions: - No specific contentions recorded for the revenue on the additional ground.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(13),Section 144B,Section 92CA(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B’’ BENCH: BANGALORE

Before: SHRI CHANDRA POOJARI & SMT. BEENA PILLAI

For Appellant: Shri Ajay Rotti, A.R
For Respondent: Shri Sunil Kumar Singh, D.R
Hearing: 21.06.2023Pronounced: 21.06.2023

PER CHANDRA POOJARI, ACCOUNTANT MEMBER:

This appeal by assessee is directed against order of AO u/s 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income-tax Act,1961 ['the Act' for short]. The assessee has raised various grounds before us. However, at the time of hearing, assessee pressed only additional ground along with a petition to admit the same, which reads as follows: “Additional ground of appeal 11. Transfer pricing order is void ab initio as the same was passed without application of mind and thereby violating principles of natural justice.

The transfer pricing order dated July 30, 2021, issued under section 92CA(3) of the Act, is liable to be struck down, as the same was passed without application of mind by the ld. TPO by considering the facts, figures and submissions that do not pertain to the appellant.”

IT(TP)A No.884/Bang/2022 M/s. Subex Limited, Bangalore

Page 2 of 3 2. We have heard the both the parties on admission of additional grounds. In our opinion, all the facts are already on record and there is no necessity of investigation of any fresh facts for the purpose of adjudication of above ground. Accordingly, by placing reliance on the judgement of Hon’ble Supreme Court in the case of NTPC Vs. CIT 229 ITR 383 (SC) we inclined to admit the additional ground for the purpose of adjudication as there was no investigation of any fresh facts otherwise on record and the action of the assessee is bonafide.

2.1 Before us, ld. A.R. submitted that this additional ground goes to the root of the matter and TPO passed the order u/s 92CA(3) of the Act not in accordance with show cause notice issued to the assessee and he drew our attention to the figures mentioned in the show cause notice dated 13.7.2021 and also order passed u/s 92CA(3) of the Act dated 30.7.2021. Primarily, we find that there is certain variation in the figures mentioned in show cause notice cited (supra) and the corresponding figures mentioned in order passed u/s 92CA(3) of the Act cited (supra). Being so, in our opinion, the TPO is duty bound to pass the order u/s 92CA(3) of the Act in accordance with the show cause notice issued for which the assessee has given reply to the same. In view of this, we remit the entire issue to the file of TPO to pass the orders in conformity with the show cause notice issued by him after considering the reply of the assessee to the said show cause notice. At this stage, we refrain from going into any other grounds raised by the assessee on merits of addition.

IT(TP)A No.884/Bang/2022 M/s. Subex Limited, Bangalore

Page 3 of 3 3. In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 21st June, 2023

Sd/- Sd/- (Beena Pillai) (Chandra Poojari) Judicial Member Accountant Member

Bangalore, Dated 21st June, 2023. VG/SPS

Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(Judicial) 5. The DR, ITAT, Bangalore. 6. Guard file By order

Asst. Registrar, ITAT, Bangalore.

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