2021 (4) TMI 1087 - AT - Income Tax

Rectification of mistake - Tribunal in not discussing and in not adjudicating on the objection of the assessee with regard to the comparability of the MPS Ltd to the assessee company - HELD THAT - We find that there is an inadvertent mistake in the order of the Tribunal in not discussing and in not adjudicating on the objection of the assessee with regard to the comparability of the MPS Ltd to the assessee company and therefore, there is a mistake apparent from the record which needs rectification. Further, we also find that the assessee has filed additional evidence with regard to the comparability of MPS Ltd to the assessee company and therefore, it requires admission and remand of the issue to the file of the Assessing Officer/TPO for verification and re-consideration.

Summary

Issues:
Rectification of mistake in the order of the Tribunal regarding the comparability of MPS Limited as a comparable company for the assessee.

Analysis:
The Miscellaneous Application (M.A.) was filed by the assessee under section 254(2) of the I.T. Act seeking rectification of an alleged mistake in the order of the Tribunal. The assessee contended that the Tribunal had not given any direction on the comparability of MPS Limited while passing the order. The assessee sought to modify the order to provide direction on the comparability of MPS Limited. The learned Counsel for the assessee reiterated the submissions made in the M.A. and highlighted that the Tribunal had not discussed or adjudicated on the objection regarding the comparability of MPS Limited to the assessee company. The assessee argued that this objection was raised for the first time before the Tribunal and presented evidence to support the claim that MPS Limited did not satisfy the filter adopted by the Transfer Pricing Officer (TPO). Consequently, the issue was requested to be set aside for reconsideration by the TPO/Assessing Officer.

The Tribunal, after considering the rival contentions and the material on record, acknowledged an inadvertent mistake in its order for not discussing and adjudicating on the objection raised by the assessee concerning the comparability of MPS Limited. The Tribunal noted that the assessee had submitted additional evidence regarding the comparability of MPS Limited and, therefore, deemed it necessary to admit the evidence and remand the issue to the Assessing Officer/TPO for verification and re-consideration. The Tribunal rectified the order by correcting the name mentioned as NPS Ltd to MPS Ltd and included a direction for reconsideration of the issue of comparability with specific instructions to examine whether MPS Limited satisfies the filters adopted by the TPO. As a result, the Tribunal allowed the M.A. filed by the assessee, thereby partly allowing the Ground of appeal for statistical purposes.

In conclusion, the Tribunal rectified the order by admitting additional evidence filed by the assessee and remanding the issue of comparability of MPS Limited to the Assessing Officer/TPO for reconsideration in accordance with the law and the filters applied by the TPO. The M.A. was allowed, and the order was pronounced in the Open Court on 26th April 2021.