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TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 105
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.... in the course of exercising its powers under Section 254 of the Income Tax Act, 1961 [in short, "Act"]?" 3. With the consent of the counsel for the parties, the appeal is taken up for final hearing and disposal, at this stage itself. 4. Briefly, the record shows that the Transfer Pricing Officer (TPO) had accepted OTL as a comparable, which was embedded in the appellant/assessee's transfer pricing study report. 4.1 The record also shows that the appellant/assessee had carried the matter in appeal before the Commissioner of Income Tax (Appeals) on other grounds, not connected with the exclusion of OTL as a comparable. 4.2 The CIT(A), via order dated 18.05.2017, excluded two comparables, i.e., M/s L&T Ramboll Engineering Consulting Services [in short, "L&T"] and Mitcon Consultancy Services [in short, "Mitcon"]. 4.3 This resulted in both the appellant/assessee as well as the respondent/revenue preferring appeals with the Tribunal. 5. The Tribunal, via the impugned order dated 03.03.2023, passed the following operative directions: "13. In a nutshell, we hold that the following comparables are directed to be excluded:- * Mi....
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....rding to Mr Chopra, if the respondent/revenue was aggrieved, it could have, at a relevant point in time, exercised revisionary power under Section 263 of the Act. 9. On the other hand, Mr Chawla contends that the Tribunal under section 254 of the Act has the same plenary power as the first appellate authority. 10. Mr Chawla contends that since facts were in dispute, the Tribunal could have entertained the additional grounds referred to hereinabove by us and excluded OTL as a comparable 11. We may note that Mr Chopra has drawn our attention to paragraph 11, wherein; inter alia, the Tribunal has recorded the following as regards the TPO's observation qua the exclusion of OTL as a comparable: "The professional and consultancy segment can be used as comparable." 12. Clearly, even according to Mr Chawla, the TPO had accepted the comparable OTL. 13. A perusal of the impugned order shows that the Tribunal has only recorded the contentions of both sides and perhaps, proceeded based on incorrect facts. The comparable OTL, according to the counsel for the parties, was indeed included in the Transfer Pricing Study Report. It is also not in disp....
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....segment. 7. Ld. Counsel for the assessee submitted that this ground of appeal raised by the revenue is misconceived for the reason that the ld. TPO had considered this company's segmental results in respect of engineering, technical and inspection (ET & I) segment which and found as a suitable comparable to the assessee company. The Ld. Counsel for the assessee submitted that the TPO after examining the segmental results of ET & I segment of M/s. Onward Technologies Ltd. accepted as a good comparable company for the assessee. The Ld. Counsel also furnished a detailed submissions as under :- 1. The captioned appeal has been filed by Department against order dated 18.05.2017 passed by the Commissioner of Income Tax (Appeals) (CIT(A)') This is the second round of litigation, and this appeal was restored pursuant to the remand vide order dated 01.09.2023 in ITA No. 487 of 2023 filed by UOP India Pvt. Ltd. ('Assessee") before the Hon'ble Delhi High Court 2. The sole issue which now arises for consideration of this Hon'ble Tribunal is whether the Revenue is justified in challenging Onward Technologies Limited (Segmentai) as a comparable for benchmarki....
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....onal dissimilarity and lack of segmental data, respectively 6. Cross-appeals were filed by Revenue (ITA No. 5724/Del/2017) and Assessee (5421/Del/2017) before this Hon'ble Tribunal. The Assessee's appeal dealt with transfer pricing adjustment relating to marketing support services segment and related issues. Whereas Revenue's appeal was in respect of ETSI Segment. It is pertinent to mention that the original appeal filed by Revenue had no ground for exclusion of Onward Technologies Limited as a comparable. At the behest of filing specific grounds of appeal, the Departmental Representative for the first time before this Hon'ble Tribunal agitated exclusion of Onward Technologies Limited as a comparable, on the same reasoning (viz. functional dissimilarity) on which M/s Mitcon Consultancy Services and Mis L&T Ramboll Consulting Engineers Limited were excluded. 7. This Hon'ble Tribunal vide order dated 03.03.2023 disposed off the said cross appeals. As regards comparability of Onward Technologies Limited, after recording the contentions of Departmental Representative that the said comparable is predominantly in automobile engineering segment, it wa....
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....The CIT(A) can, therefore, probe into the correctness of the entire assessment, whether or not a specific issue is raised before him. Such power flows from the power of enhancement of assessment conferred by section 251(1)(a), read with the Explanation 10. As a sequitur, the legislature in its wisdom has restricted the Revenue's "right to appeal" before the Tribunal to the order passed by CIT(A) In terms of section 253(2) of the Act, the Principal Commissioner or Commissioner may, if he "objects to any order passed by the CIT(A)" under section 250, direct the Assessing Officer to appeal to the Tribunal against the order. A literal interpretation of section 253(2) of the Act makes it abundantly clear that the scope of departmental appeal before Tribunal should be restricted to object to the order passed by the CIT(A). Thus, under no circumstance the Revenue can be aggrieved with a view taken by the Assessing Officer in the assessment order independent of any external influence of the CIT(A). If an issue was not a 'subject matter of challenge before the CIT(A), the same could not be agitated for the first time by Revenue before the Tribunal. It Is well settled legal ....
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.... the AO in considering a particular company as comparable at his own without any external interference by some Income-tax authority in this regard, it is noted that the Revenue has preferred appeal against the deletion of addition on account of transfer pricing adjustment. Accordingly, what has been challenged is the decision given by the Id. CIT(A) on issues decided against the Revenue, which in relation to Ace Software Lid, is the calculation of its profit ratio When the TPO himself considered this company as comparable, in our considered opinion, there can be no reason for the Id. DR to be aggrieved against its inclusion in the appeal filed before the tribunal. The Department can take recourse to the other legal remedies, if any, available as per law in so far as its grievance against the decision of the AO/TPO is concerned." 14 It is highlighted that in all the appeals filed by Revenue against an order passed by the CIT(A), the Appellant before the Tribunal is always the Assessing Officer, Further, in terms of section 92CA(4) of the Act, the Assessing Officer is mandated to compute the total income of an Assessee in conformity with the arm's length price so determi....
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.... over the Assessing Officer only, not the TPO. Thus, by no stretch of imagination, the Commissioner or Assessing Officer referred in section 253(2) of the Act has any authority to revisit an order passed by the TPO, by filing an appeal before the Tribunal, which is otherwise binding on them. 18 It is also submitted that neither the Commissioner nor the Assessing Officer referred in section 253(2) of the Act has the power to "review" the final assessment order passed under section 143(3) read with section 144C(3) of the Act, so as to revisit a view taken by the TPO under section 92CA(3) of the Act and confirmed in appeal by the CIT(A) under section 250 of the Act. It is well-settled that the power of review is not an inherent power. Right to seek review of an order is neither natural nor fundamental right of an aggrieved party. Such power must be conferred by law. If there is no power of review, the order cannot be reviewed. The normal principle of law is that once a judgment is pronounced or order is made, a Court, Tribunal or Adjudicating Authority becomes 'functus officio' (viz. ceases to have control over the matter). Such judgment or order is 'final and can....
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....sessing Officer disallowed the same in the grounds that there was no provision to amend the return filed. Thus, the issue was there before the Assessing Officer itself and was also duly adjudicated by the CIT(A). In the present case, the comparable was accepted and was never a subject matter of appeal before the lower authorities and thus, could not be agitated before the Tribunal. Further, the restriction to object to the order of the CIT(A) in section 253(2) of the Act, is not applicable in the case of an Assessee. * Aztec Software & Technology Services Ltd.v. ACIT [107 ITD 141 (SB)] This case is factually different. Reliance has been placed by the Ld. Departmental Representative on Para 133 of the said judgment to argue that the tax authorities can substitute their own arm's length price. This is not applicable in the present case, as Onward Technologies Limited (seg.) was accepted as comparable by the TPO itself after due application of mind. Further, no new material or information has been unearthed or collected at the stage of appeal before this Hon'ble Tribunal, which may create a fresh cause of action for the Revenue. Merely because CIT(A) had excluded M/s ....