Tribunal remands case for fresh consideration, directs CIT(A) to hear assessee. Appeal treated as allowed.

The Tribunal set aside the CIT(A)'s order and remanded the issues back for fresh consideration. The CIT(A) was directed to hear the assessee before deciding afresh. The appeal was treated as allowed for statistical purposes, with the judgment pronounced on June 29, 2020.

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Issues Involved:
1. Exclusion of Acropetal Technologies Ltd. from the final list of comparables.
2. Inclusion of Akshay Software Technologies Ltd. and Cigniti Technologies Limited in the final list of comparables.
3. Erroneous computation of margins of Neilsoft Limited and Cades Digitech Private Limited.
4. The CIT(A)’s refusal to adjudicate on merits due to the assessee not filing objections to the draft assessment order before the DRP.

Detailed Analysis:

1. Exclusion of Acropetal Technologies Ltd. from the Final List of Comparables:
The assessee argued that Acropetal Technologies Ltd. should be excluded from the final list of comparables. The Tribunal noted that the CIT(A) upheld the TPO's order without addressing the merits of this contention, primarily because the assessee did not file objections to the draft assessment order before the DRP.

2. Inclusion of Akshay Software Technologies Ltd. and Cigniti Technologies Limited in the Final List of Comparables:
The assessee contended that Akshay Software Technologies Ltd. and Cigniti Technologies Limited should be included in the final list of comparables. Similar to the previous issue, the CIT(A) did not adjudicate on this matter due to the procedural stance that the assessee did not object to the draft assessment order before the DRP.

3. Erroneous Computation of Margins of Neilsoft Limited and Cades Digitech Private Limited:
The assessee argued that the TPO erroneously computed the margins of Neilsoft Limited and Cades Digitech Private Limited. The CIT(A) did not address this issue on merits, relying on the procedural ground that the assessee did not file objections to the draft assessment order before the DRP.

4. The CIT(A)’s Refusal to Adjudicate on Merits:
The Tribunal focused extensively on the CIT(A)’s refusal to adjudicate on the merits of the case. The CIT(A) concluded that since the assessee did not file objections to the draft assessment order before the DRP, it could not raise objections against the final assessment order before him. The Tribunal found this conclusion to be "wholly erroneous and contrary to the provisions of Section 144C of the Income-tax Act, 1961." The Tribunal clarified that under Section 144C, an assessee has the option either to file objections before the DRP against the draft assessment order or to obtain a final assessment order and challenge the same before the CIT(A). The Tribunal emphasized that the choice of the assessee to not file objections before the DRP does not preclude it from challenging the final assessment order before the CIT(A).

The Tribunal cited the CBDT Circular No. 5/2010, which clarifies that an assessee has the option to file an objection against the draft assessment order before the DRP or to pursue the normal channel of filing an appeal against the assessment order before the CIT(A). The Tribunal concluded that the CIT(A) should have adjudicated on the grounds raised by the assessee.

Conclusion:
The Tribunal set aside the order of the CIT(A) and remanded the issues raised in the appeal back to the CIT(A) for fresh consideration on merits. The CIT(A) was directed to afford an opportunity of being heard to the assessee before deciding the issues afresh. The Tribunal did not deal with the various grounds of appeal on merits due to the remand.

Result:
The appeal of the assessee was treated as allowed for statistical purposes. The judgment was pronounced in the open court on June 29, 2020.

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