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TMI Blog2020 (7) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... her to file the objection before the DRP against the draft assessment order or obtain a final assessment order and challenge the same before the CIT(Appeals). Since the CIT(A) has not decided the appeal on merits, we deem it fit and proper to remit the issues raised in this appeal to the CIT(A) for consideration afresh. - Decided in favour of assessee for statistical purposes. - IT(TP)A No.793/Bang/2019 - - - Dated:- 29-6-2020 - Shri N.V. Vasudevan, Vice President And Shri B R Baskaran, Accountant Member For the Appellant : Ms. Tanmayee Rajkumar, Advocate For the Respondent : Shri Priyadarshi Misra, Jt.CIT(DR)(ITAT), Bengaluru. ORDER PER N.V. VASUDEVAN, VICE PRESIDENT This appeal by the assessee is against the order dated 13.02.2019 of the CIT(Appeals)-4, Bengaluru relating to assessment year 2013-14. 2. The assessee is a company incorporated under the provisions of the Companies Act, 1956 and is a wholly owned subsidiary of Mann Hummel Filter Technology (S.E.A) PTE Limited, Singapore. It is engaged in the business of manufacturing and trading in air intake systems and filters for the automotive and heavy engineering industry. It provides Engin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cigniti Technologies Ltd. 8.34 3. I-Design Engineering Solutions Ltd. 14.66 4. Neilsoft Ltd. 5.73 5. Tata Exlsi 8.65 Arithmetical Mean 8.82 5. Out of the 5 comparables selected by the assessee, the TPO accepted the 2 comparables viz., Neilsoft Ltd. and Tata Elxsi, and rejected the others. 6. The comparables selected by the TPO and its arithmetic mean are as under:- SI. No. Name of the Company Mark-up on Total Costs (WC-unadj) (in %) Mark-up on Total Costs (WC-adj) (in %) 1 Acropetal Technologies Ltd. 37.79 35.09 2 Neil Soft Ltd. - 15.61 13.66 3 Cades Digitech Pvt Ltd. 3.91 -0.20 4 Tata Elxsi 10.53 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of Section 144C of the Income-tax Act, 1961 [the Act]. In terms of the said provision, an Assessee has an option either to file objections before the DRP against the draft assessment order or obtain a final assessment order and challenge the same before the CIT(A) and adopting the second option by no means would mean that the adjustments made in the draft assessment order are accepted. It was therefore submitted that the CIT(A) ought to have adjudicated on the grounds raised before him. The learned DR relied on the order of the CIT(A). 11. We have considered the submission of the learned counsel for the Assessee. Section 144C was inserted in the Act by the Finance Act, 2009 and came into effect from 1st October, 2009. In the Notes on Clauses to the Finance Bill, 2009 [Budget 2009-2010] the reason for insertion of Section 144C was given as under:- The subject of transfer pricing audit and the taxation of foreign company are at nascent stage in India. Often the Assessing Officers and Transfer Pricing Officers tend to take a conservative view. The correction of such view take very long time with the existing appellate structure. With a view to provide speedy dispo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of assessment. 14. However, when the Assessee does not file his objection within 30 days as prescribed Under Section 144C(2) of the Act, he has a right to file appeal against the final order of assessment to the CIT(A). The CBDT in Circular bearing No. 9/2013 issued on 19-11-2013, has clarified that Section 144C is applicable to any order which proposed to make variation in income or loss returned by an eligible assessee on or after 01-10-2009, irrespective of the assessment year to which it pertains. In paragraphs 45.1 to 45.4 of Circular No. 5/2010 dated 03-6-2010, CBDT explained the substance of the provisions of Section 144C. It has been made clear by the Circular that an order passed under Section 143(3) or Section 147 in pursuance of the directions of the DRP, is not made appealable under Section 246A(1) to the Commissioner or under Section 253(1) to the Appellate Tribunal. It means a finality was sought to be attached to the directions issued by the Dispute Resolution Panel vis- -vis powers of CIT(A). Since the Dispute Resolution Panel is provided as an alternative mechanism for the resolution of disputes, the choice is upon the assessee whether to file an objection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als). 17. Since the CIT(A) has not decided the appeal on merits, we deem it fit and proper to remit the issues raised in this appeal to the CIT(A) for consideration afresh. Though the Assessee has not raised a specific ground of appeal praying for setting aside the order of CIT(A) for consideration de novo by him on merits, yet we are of the view that the opinion of the first appellate authority on the issue on merits would be of utmost importance. The scheme of the Act is that the Assessing Officer passes the order of assessment. A first appellate authority within the department expresses his opinion on the order of assessment. Thereafter the appeal is provided to the Tribunal against the order of the first appellate authority. In the absence of opinion of the first appellate authority on merits, the tribunal will be handicapped. We therefore set aside the order of CIT(A) and remand the issues raised before CIT(A) for adjudication, in so far as the grounds of appeal raised by the Assessee in this appeal are concerned. The CIT(Appeals) will afford opportunity of being heard to the Assessee before deciding the issues afresh. 18. Since the issues raised in the appeal are set ..... X X X X Extracts X X X X X X X X Extracts X X X X
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