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2016 (5) TMI 1300 - AT - Income TaxReference to Dispute Resolution Panel - enhancement of transfer pricing adjustment - upward adjustment - Held that:- Assessing Officer has not passed the assessment order in conformity with the direction of the DRP. In fact, the direction of the DRP was to the TPO. Therefore, the assessee has no occasion to file its objection to the subsequent order of the TPO dated 22.1.2014. When the TPO passed the order dated 22.1.2014, the Assessing Officer in all fairness ought to have given an opportunity to the assessee to file its objection. Such an opportunity was not given to the assessee. Moreover, the TPO was not empowered to pass any order subsequent to the direction of the DRP. The Assessing Officer is expected to pass an assessment order in conformity with the direction of the DRP without any intervention either by the TPO or by any authority. Therefore, there is a clear violation of the procedure prescribed u/s 144C of the Act. Moreover, as rightly submitted by the ld. Counsel for the assessee, the DRP made adjustment with regard to capacity utilization and customs duty adjustment without issuing any notice. This Tribunal is of the considered opinion that there was a clear violation of the principles of natural justice. Therefore, the matter needs to be reconsidered by the DRP. The direction of the DRP shall be specific and clear so that the Assessing Officer can implement the same without any intervention either by the TPO or any authority. Thus entire issue is remitted back to the file of the Assessing Officer. The Assessing Officer shall refer the matter once again to the DRP and the DRP shall pass a clear and specific order, if necessary, after calling for a remand report from the TPO.
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