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Facts
The assessee's return of income was selected for scrutiny due to international transactions, leading to a transfer pricing adjustment. After appeals and remands by the ITAT, the CIT(A) set aside the matter for a fresh transfer pricing adjustment, also upholding a disallowance of expenses.
Held
The Tribunal held that the CIT(A) correctly restored the issue to the AO/TPO to follow ITAT's directions, as they were not previously followed. The Tribunal also found the grounds of appeal raised by the Assessing Officer to be contradictory.
Key Issues
Whether the CIT(A) had the power to set aside the issue for re-adjudication as per ITAT's directions and if the Assessing Officer's grounds of appeal were valid.
Sections Cited
143(1), 254
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Income Tax Appellate Tribunal, B BENCH: BANGALORE
Before: SHRI PRASHANT MAHARISHI, VICE – & SHRI SOUNDARARAJAN K.
ORDER PER PRASHANT MAHARISHI, VICE – PRESIDENT 1.
Assistant Commissioner of Income Tax, Circle-4(1)(1), Bengaluru (the Ld. Assessing Officer) in case of Msource (India) Private Limited (the Assessee) against the Appellate Order passed by the National Faceless Appeal Centre, Delhi for Assessment Year 2011-12 on 11.06.2025 wherein the Appeal filed by the Assessee against the order u/s. 254 of the Act passed pursuant to the order of the ITAT in dated 27.10.2021 was partly allowed.
The Ld. Assessing Officer is aggrieved and has raised following grounds of appeal.
3. The brief fact of the case shows that Assessee filed its return of income which was processed u/s. 143(1) on 28.01.2012. Revised return was filed on 29.03.2013. The return of income was picked up for scrutiny as it had certain international transactions. Reference was made on determining arms-length price. The Ld. Transfer Pricing Officer as per order dated 29.01.2015 proposed a transfer pricing adjustment of Rs. 5,38,68,503/-. Subsequently, the draft Assessment Order was passed on 30.03.2015. Assessee file objections before the Ld. DRP who gave directions on 07.02.2015 upholding the transfer pricing adjustment of Rs. 5,19,76,756/-. Based on this, the final Assessment Order was passed on 27.01.2016. This was challenged by the Assessee before the ITAT wherein the order dated 27.10.2021 was passed by, remanding the issue back to the file of TPO as well as and the expenses disallowed in earlier orders now to be allowed as Assessee has deducted at source. Subsequently, the order giving effect was passed to the Transfer Pricing Officer making a transfer pricing adjustment of Rs. 14,03,14,796/-. Consequent to that the Assessment Order was passed by the Ld. Deputy Commissioner of Income Tax on 28.02.2024 u/s. 254 of the Act determining total income of the Assessee at Rs. 33,76,60,907/- against the returned income of Rs. 20,01,55,375/-.
4. The Assessee contested the same before the Ld. CIT(A) who set aside the whole issue for the purpose of doing the transfer pricing adjustment once again based on the ITAT’s order. Regarding the disallowance of expenses, Assessee did not raise a ground and therefore the addition of Rs. 28,09,264/- was upheld. Appeal of the Assessee was partly allowed.
Page 3 of 4 5. Aggrieved with this, the Ld. Assessing Officer is in appeal before us stating that NFAC has passed the order which has no jurisdiction and further the Ld. CIT(A) has set aside the order which he does not have power.
Despite notice, none appeared on behalf of the Assessee. However, written submission was filed. Same is considered. The Ld. DR supported the grounds of appeal.
7. We have carefully considered the rival contention and find that in this case, the Ld. CIT(A) has restored the issue back to the file of Ld. AO/TPO to decide it in accordance with the directions of the ITAT. According to the Ld. CIT(A), the direction of ITAT has not been followed. It is neither the case of remanding nor the case of enhancement. But merely following the order of the ITAT. In view of this we do not find any grievance on the side of the Assessing Officer. Further the grounds raised by the ld. AO are contradictory. It is also challenging the order passed by its own assessing officer that he should not have passed such an order. In view of this, the appeal filed by the Ld. Assessing Officer is dismissed.
Order pronounced in the open court on 08th January, 2026.