Income Tax Act, 1961

Section 254(2)

Appeal (Tribunal) - Rectification under section 254(2) - Non-consideration of ground raised by assessee -

Assessee submitted that even after recording its submission that distribution fee paid to Associated Enterprises could not be characterized as royalty; Tribunal did not deal with the fundamental dispute and proceeded to restore the issue of determining the ALP to TPO for fresh consideration. Thus, in the said circumstances, rectification application was filed, but the same was rejected on the ground that fresh consideration would also include deciding on characterization of distribution fees by TPO. Further, non-consideration of an argument by party would not lead to rectification, but would amount to review.Held: It was neither the case of Revenue nor the order of Tribunal that before the characterization of fee could be decided, certain facts were to be ascertained. Thus, as all the facts to decide on question of law were available, Tribunal ought to have dealt with the issue itself. By not dealing with an issue which was otherwise ripe for consideration and instead remanding to TPO, Tribunal had ensured further litigation and continued uncertainty for both Revenue and assessee. Besides, non-consideration of submission of assessee made at the hearing, as recorded, was clearly a mistake apparent from record and thus, appeal was restored to the Tribunal for fresh disposal in accordance with law.

Distinguished:Commissioner of Income Tax v. Ramesh Electrical Company Ltd., (1993) 203 ITR 497 (Bom): 1993 TaxPub(DT) 0847 (Bom-HC)

REFERRED : Coca-Cola India (P) Ltd. v. Assistant Registrar representing Income Tax Appellate Tribunal, (2014) 368 ITR 487 (Bom): 2014 TaxPub(DT) 3995 (Bom-HC)CCE, Calcutta v. Alnoori Tobacco Products 2004 (170) ELT 135 (SC): 2004 TaxPub (EX) 1591 (SC), Escorts Ltd. v. CCE, Delhi-II- 2004(173) ELT 113 (SC): 2004 TaxPub (EX) 2248 (SC))

FAVOUR : In assessee's favour

A.Y. : 2011-12

SUBSCRIBE FOR FULL CONTENT