ITAT Mumbai Bench recalls order for assessment year 2008-09 due to errors in considering case laws and facts.

The ITAT 'K' Bench, Mumbai recalled its order in ITA No. 792/Mum/2013 for the assessment year 2008-09. The Tribunal found errors in the non-consideration of case laws and relevant facts regarding adjustments made for consultancy services and management charges provided to AEs. The Tribunal set aside the order and directed a de novo assessment, acknowledging mistakes in the initial decision. The matter was sent back to the AO for further review, and a new hearing was scheduled before a regular Bench. The applicant's appeal was successful, and the order was pronounced on 11/03/2020.

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Issues:
1. Recall of the order dated 27.10.2017 passed by ITAT 'K' Bench, Mumbai in ITA No. 792/Mum/2013 for the assessment year 2008-09.

Analysis:
The applicant sought recall of the order dated 27.10.2017 passed by the ITAT 'K' Bench, Mumbai in ITA No. 792/Mum/2013 for the assessment year 2008-09. The applicant challenged the action of the AO/TPO/DRP regarding adjustments made concerning consultancy and design services provided to its AEs. The applicant argued that certain comparable companies selected by the TPO should be removed from the list as they were functionally dissimilar. The applicant cited relevant decisions to support its arguments. The Tribunal set aside the matter to the file of the AO without referencing the decisions cited by the applicant, leading to the applicant's claim of an error apparent from the record.

In the second ground of appeal, the applicant challenged the adjustment relating to payment of management charges. The TPO initially did not make a separate adjustment for management fees, considering it part of the operating cost. However, the applicant raised concerns about this adjustment. The DRP confirmed the TPO's treatment of management fees at Nil, but the AO did not make any adjustment in the final assessment order. The Tribunal set aside the order of the AO and directed a de novo assessment, which the applicant argued was erroneous since no adjustment was made by the AO on the issue of management charges.

The Tribunal considered the arguments presented by both sides and found mistakes apparent from the record in the non-consideration of case laws and relevant facts for both the 1st and 2nd grounds of appeal. Consequently, the Tribunal recalled the impugned order in respect of both grounds and directed the case to be fixed for hearing before a regular Bench after informing both parties. The MA was allowed, and the order was pronounced on 11/03/2020.

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