OREN HYDRO CARBONS PVT LTD.,CHENNAI vs. ACIT COMPANY CIRCLE V(1), CHENNAI

This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals) 3, Chennai dated 31.05.2017 relevant to the assessment year 2008-09. Besides raising various grounds in the appeal of the assessee, the ld. Counsel for the assessee has mainly contended that the Assessing Officer without passing a draft assessment order as envisaged under section 144C of the Income Tax Act, 1961 [“Act” in short] and the ld. CIT(A) has failed to adjudicate the said issue as raised before him under ground No. 2 & 3.

Brief facts of the case are that the assessee is engaged in manufacture, trade and export of chemicals used in oil and gas exploration industry. The assessee filed its return of income on 27.092008 declaring total income at ₹.4,56,64,700/-. The case of the assessee was selected for scrutiny and notice under section 143(2) of the Act was issued to the assessee on 11.09.2008. Since the assessee had entered into certain international transactions, the case of the assessee was referred to the Transfer Pricing Officer to determine the Arm’s Length Price. The TPO vide order dated 31.10.2011 made adjustment of ₹.3.24 crores in the ALP of AE. Against the order passed under section 92CA of the Act of TPO, the assessee filed objections before the Dispute Resolution Panel. In pursuance to the directions of the DRP dated 31.08.2012, the Assessing Officer, vide his impugned order made the additions on the income returned by the assessee. The assessee carried the matter in appeal before the Tribunal and the Tribunal set aside and remitted the issue to the Assessing Officer to decide the issue afresh. In the second round of litigation, after considering the submissions of the assessee vide its letter dated 24.03.2016 filed on 28.03.2016, the Assessing Officer completed the assessment under section 143(3) r.w.s. 254 of the Act by making addition of TP adjustment of ₹.3.24 crores.

On appeal, besides raising various grounds, the assessee has raised the following grounds before the ld. CIT(A) in ground No. 2 & 3 and reproduced as under: “2. The Learned Assessing officer has erred in passing an order u/s. 143(3) without adhering to section 144C of the Income Tax Act, 1961.

On being aggrieved, the assessee is in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that the ld. CIT(A) has not assigned any valid reason for non-adjudication of the grounds raised before him during the course of appellate proceedings and prayed that suitable directions may be given to the ld. CIT(A) for adjudication of the ground raised before him. On the other hand, the ld. DR has expressed no objection if the matter is remitted back to the file of the ld. CIT(A) for adjudication.

We have heard both sides, perused the materials available on record and gone through the orders of authorities below. In this case, during the course of appellate proceedings, the assessee has raised various grounds including the grounds as reproduced above and on perusal of the appellate order, we find that the ld. CIT(A) has not adjudicated the ground raised by the assessee in terms of section 144C of the Act.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on the 30th November, 2017 at Chennai.