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TMI Blog2024 (12) TMI 419X X X X Extracts X X X X X X X X Extracts X X X X ..... and power products. Authorized Representative has produced computerized ledger extracts and vouchers which have been test checked. During the year under consideration, the assessee had undertaken international transaction with its associated enterprises. As value of international transaction was more than Rs. 15 crore, with the previous approval of CIT, Delhi IV, New Delhi and in accordance with provisions of section 92CA of the IT Act, the international transaction entered into by the assessee with the associated enterprises was referred to the transfer pricing officer (TPO) for determining the Arm's Length Price. The TPO passed order u/s 92CA(3) dated 23/01/2014 making an adjustment of Rs. 4,18,05,854/- in the Arms Length Price of the assessee. The assessee was asked to show cause as to why an adjustment of Rs. 4,18,05,854/- to the income of the assessee should not be made being the difference in Arm's Length Price as determined by the TPO vide his order u/s 92CA(3) dated 23/01/2014. The assessee gave reply vide letter dated 31/01/2014. The assessee preferred objections before DRP. DRP decided objections vide order dated 25/09/2014. Incorporating the observations of DRP, learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ground 7 Hon'ble DRP/Ld. TPO erred in law in determining the price of the impugned transaetic of the Appellant, as the circumstances necessitating the determination of price by the Learned TPO as mentioned in sub-section (3) of section 92C did not exist in case of the Appellant. Ground 8 Hon'ble DRP/Ld. TPO erred in facts and in law by not accepting the economic analysis undertaken by the Appellant in accordance with the provisions of the Income-tax Act, 1961 ("the Act") read with the Income-tax Rules, 1962 ("the Rules"), and conducting a fresh economic analysis for the determination of the arm's length price of the impugned international transaction and holding that the Appellant's international transaction is not at arm's length. Ground 9 Hon'ble DRP/Ld. TPO has erred in facts and in law in rejecting the Appellant's claim to use multiple year data for computing the ALP, and instead used single year updated data to compute arm's length price of the international transaction. Ground 10 Hon'ble DRP/ Ld. TPO has erred in not applying the proviso to Section 92C(2) of the Act correctly and has failed to allow the benefit of downward variation of 5 percent in the deter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Pricing Officer has not passed any order, the Assessing Officer should have taken into account the DRP's direction and would have taken cognizance in the final assessment order, but the Assessing Officer choose not to follow the DRP's direction. Subsequently, when the Transfer Pricing Officer passed the order giving effect to DRP's directions vide order dated 21.02.2014, the Assessing Officer on suo moto basis has rectified the assessment order u/s 154 thereby giving effect to directions of the DRP. As per Section 143(3), the Assessing Officer has to pass the assessment order within the prescribed period otherwise the assessment becomes time barred. The Assessing Officer has followed the statutory provisions of Section 143(3) thereby passing assessment order. But as per the binding section i.e. Section 144C(10) of the Act, the mandatory provision was not followed by the Assessing Officer, thereby it is binding on the Assessing Officer to follow the directions of the DRP. Therefore, the assessment becomes null and void. As regards rectification, there is no mistake committed on part of Assessing Officer, in fact Assessing Officer was very well aware that the DRP has given certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. Thus, both the assessment order as well as the order giving effect of TPO passed on 27/11/2014 i.e., within the period of limitation. The Assessing Officer definitely made a technical procedure lapse with regarding to section 144C of the Act. However, appellant assessee after passing of 8 years preferred application raising additional ground was not maintainable. The Assessing Officer in final order dated 04/12/2014 has taken cognizance of DRP directions by incorporating in the same. Accordingly, modification of the final assessment order comes well within the ambit of section 154. Ld. AO has precisely done that immediately after receipt of order giving effect dated 27/11/2014 from the TPO. The facts of present case are distinguishable from the facts of case titled as Global One India Pvt. Ltd.'s case (supra). 8. The Learned Counsel for the Department of Revenue submitted that a Co-ordinate Bench in ITA No.1005/Del/2022 titled as Hitachi Astemo Haryana Private Ltd. vs. DCIT decided on 23/11/2023 in para No. 4 to 10 has held as under:- "4. Briefly stated, in this case, the TPO passed an order under section 92CA(3) of Income-tax Act, 1961 (for short 'the Act') vide order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ACIT taxmann.com 339 (Bangalore - Trib.); (2018) 89 (iii) M/s. Global One India Pvt. Ltd. vs. DCIT : 1980/Del/2014; ITA No. (iv) M/s. Olympus Medical Systems Pvt. Ltd. vs. No.873/Del/2021; ACIT: ITA (v) Yokogawa India Ltd. vs. ACIT : ITA (TP) A No. 1715 & 692/Bang/2016 & MP.No.136/Bang/2021; and (vi) July Systems & Technologies Pvt. Ltd. vs. DCIT : IT (TP) A.No.368/Bang/2016. 5. Per contra, Id. DR for the Revenue relied upon the orders of the Hon'ble jurisdictional High Court of Delhi and decision of Hon'ble Madras High Court as under:- (i) Anand NYH Products Pvt. Ltd. vs. National E Assessment Centre ANR dated 06.08.2021 - WP (C) 7936/Del/2021; (ii) Fiber Home India vs. National E Assessment Centre ANR 15.12.2021 -WP(C) 11609/2021; (iii) SRF Ltd. vs. National E Assessment Centre and ANR WP (C) 6484/2021; and (iv) Ford India Pvt. Ltd. vs. National E Assessment Centre - WP (C) 12701/2021. 5.1 Referring to these case laws, Id. DR for the Revenue has submitted that the facts of the present case and the case laws cited are similar. AO in hese cases passed the order without incorporating the DRP's direction. In all the above cases, the Hon'ble High Courts did not quas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orating the directions of the DRP. In that case also, Hon'ble jurisdictional High Court remitted the matter to DRP keeping in view of the scheme of section 144C of the Act. In this decision, Hon'ble jurisdictional High Court inter alia referred to the decisions of Hon'ble jurisdictional High Court in the cases of Anand NYH Products Pvt. Ltd. and SRF Ltd. (supra). 8. Thus, from the above reading of Hon'ble jurisdictional High Court decisions, it is emanating that in the final assessment order passed without incorporating the DRP's directions, the matter has been remanded to the DRP by the Hon'ble High Court to give effect to the scheme of section 144C of the Act. The above case laws are binding upon us. Hence, following the same, we remit the issue to the file of AO, AO shall pass an order incorporating DRP's directions which has been given effect by the TPO. 9. Since, we have remanded the matter to the AO to give effect to the directions of the DRP/TPO, adjustment of other grounds at this juncture is not required. 10. In the result, the appeal filed by the assessee is allowed for statistical purposes." 9. Learned Authorized Representative for Department of Revenue submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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