2013 (5) TMI 73 - AT - Income Tax

Tribunal orders case reconsideration, emphasizes natural justice principles

Ingram Micro (India) Exports (P.) Ltd. Versus Deputy Director of Income-tax (International Taxation) -3(1)

Ingram Micro (India) Exports (P.) Ltd. Versus Deputy Director of Income-tax (International Taxation) -3(1) - TMI Issues:1. Bias of jurisdictional Commissioner on the DRP panel2. Appropriately remunerating Indian entity at arms length3. Cross-examination of individuals whose statements were relied uponAnalysis:1. The first issue raised in the appeal was regarding the possible bias of the jurisdictional Commissioner on the Dispute Resolution Panel (DRP). The appellant requested the restoration of the appeal to the file of the Assessing Officer (AO) due to concerns about bias, citing precedents and principles laid down by the High Court and ITAT. The objection was supported by evidence of the jurisdictional Commissioner's involvement in the entire assessment process, leading to a request for fresh consideration without delving into the merits of the case.2. The second issue pertained to the contention that the Indian entity had been appropriately remunerated at arms length, supported by documents showing rebates/incentives paid directly to the Indian entity by vendors. The appellant argued that these documents were not considered by the AO or the DRP, necessitating a fresh examination by the AO. The appellant also highlighted the failure to provide an opportunity for cross-examining individuals whose statements were crucial to the case.3. The third issue revolved around the denial of the opportunity for cross-examination of individuals whose statements were relied upon by the Revenue. The appellant contended that natural justice principles were not adhered to, emphasizing the importance of examining the remuneration of the Indian entity and conducting cross-examination. The appellant sought a restoration of the matter to the AO for a comprehensive reevaluation of all relevant issues.4. After considering the contentions of both parties, the Tribunal acknowledged the concerns regarding bias and directed the matter to be set aside to the file of the DRP without the jurisdictional Commissioner. The Tribunal also recognized the need for a fresh examination by the AO on the issues of remuneration and cross-examination, emphasizing the importance of natural justice principles and the right to cross-examine individuals whose statements were used against the appellant.5. Ultimately, the Tribunal allowed the appeal for statistical purposes, setting aside the orders of the AO and the DRP and restoring the entire assessment procedure to the file of the AO for a fresh examination. The Tribunal emphasized the need for a fair and thorough reconsideration of the issues raised by the appellant, ensuring that all relevant documents and contentions are duly considered in the reassessment process.