2011 (2) TMI 1286 - AT - Income Tax

Summary

Issues involved: Appeal against order of Assessing Officer u/s 144C for assessment year 2007-08.

Issue 1: Dispute Resolution Panel's consideration of assessee's submissions

The assessee challenged the Dispute Resolution Panel's (DRP) direction, claiming it did not consider their submissions adequately. The DRP's order was criticized for being laconic and not providing justification for rejecting the assessee's objections. The DRP's adjudication included the assessee's objection regarding the treatment of software license revenue as royalty under section 9(1)(vi) of the Income-tax Act, 1961 and the Indo-USA DTAA. The DRP's direction was found to be lacking in detail and proper consideration of the assessee's objections. The Tribunal emphasized the importance of the DRP providing cogent and germane reasons for its directions, citing legal precedents requiring quasi-judicial authorities to give reasoned decisions. The Tribunal concluded that the DRP's direction was too brief and remitted the issue back to the DRP for a fresh adjudication, emphasizing the need for a proper and speaking direction under section 144C of the IT Act.

Outcome: The Tribunal allowed the appeal for statistical purposes, remitting the matter to the DRP for a fresh direction with proper consideration of the assessee's submissions.