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2014 (7) TMI 417 - AT - Income TaxTransfer pricing adjustment – Rectification of mistake u/s 154 of the Act – Held that:- The AO to be perfectly justified in rectifying his order u/s 143(3) r/w s 254 dated 24.12.2007- This is as no revision to his earlier adjustment qua lease rentals for MC has been directed by the TPO vide his order u/s 94CA(3) r/ws 254 - in allowing relief to the assessee in respect of the adjustment, had acted without any basis, legal or factual - The question is not of the binding or otherwise nature of the TPO’s direction/s u/s 92CA(3), but of the AO having acted de hors and in the absence of any such direction - The TPO having rightly or wrongly not revised his earlier direction u/s 92CA(3) dated 15.02.2005 pursuant to that by the tribunal dated 30.08.2006, the AO could not have acted suo motu in firstly disregarding the understanding of the tribunal’s order by the TPO. The rectification order (whereby the A.O. aligns himself with the directions by the TPO, i.e., to the extent the assessment was in disagreement therewith) merging with the original order (assessment), the assessee’s appeal against the rectification order would, therefore, stand to be considered only as an appeal against an assessment order. Not doing so would leave the assessee remedy less and for no fault of its’. In-as-much as rectifying a mistake would fall within the inherent powers of the court or tribunal, it could also be contended that the rectification is not constrained on account of the time limitation that attends a rectification u/s 254(2) - if only to cause the removal of the prejudice, apart from other persuasive reasons, it is only proper to conclude that the tribunal had restored the matter qua Adjustment ‘B’ also back to the AO - thus, the matter is remitted back to the TPO and allowance of proper opportunity to the assessee – Decided in favour of Assessee.
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