2022 (9) TMI 1524 - AT - Income Tax

Rectification of mistake - Non-adjudication of ground vis- -vis exclusion of Eclerx Services Limited (Eclerx) from the set of comparable companies - HELD THAT - Tribunal while passing the order 2018 (3) TMI 2013 - ITAT DELHI inadvertently omitted to adjudicate one of the comparable companies, namely, Eclerx Services Limited. Non-adjudication of ground No. 3.5 vis- -vis Eclerx Services Limited while passing the order by the Tribunal is a mistake apparent from record. Thus, we recall the order of the Tribunal for the limited purpose of adjudicating one of the comparables, namely, Eclerx Services Limited, which is part of ground No. 3.5 for adjudication by the Tribunal.

Summary

Issues: Restoration of order for adjudicating the exclusion of a company from comparable set for transfer pricing adjustment in the assessment year 2010-11.

Analysis:
1. The assessee filed a Misc. application seeking restoration/recalling of the Tribunal's order to adjudicate ground No. 3.5 regarding the exclusion of Eclerx Services Limited from the set of comparable companies for the assessment year 2010-11.
2. The counsel for the assessee argued that the Tribunal failed to address the rejection of Eclerx Services Ltd. as a comparable company, despite consistent arguments by the assessee in previous years and specific submissions made in the present case.
3. The Departmental Representative contended that the assessee did not raise this ground in the initial appeal.
4. The assessee's counsel clarified that ground No. 3.5 was indeed raised to challenge the selection of non-comparable companies.
5. The Tribunal reviewed the submissions, the order, and the grounds of appeal. The assessee disputed the Assessing Officer's determination of the arm's length price for international transactions, specifically challenging the selection of non-comparable companies in ground No. 3.5.
6. The Tribunal acknowledged the oversight in not adjudicating the exclusion of Eclerx Services Limited, a disputed comparable company, and deemed it a mistake apparent from the record. Consequently, the Tribunal decided to recall the order for the limited purpose of adjudicating the exclusion of Eclerx Services Limited.
7. The Tribunal directed the Registry to schedule a hearing to dispose of ground No. 3.5 and specifically address the comparability of Eclerx Services Limited by issuing notices to both parties.
8. The Misc. application was allowed, and the order was pronounced on 09/09/2022.

This judgment highlights the importance of addressing all grounds raised by the parties in an appeal, ensuring that each issue is adequately considered and decided upon. The Tribunal's decision to recall the order for the limited purpose of addressing the exclusion of a comparable company demonstrates the commitment to fairness and thoroughness in the adjudication process.