LTIMindtree Limited Vs ACIT (ITAT Mumbai)
Reference to Sec.144 a Clerical Error – Tribunal Says AO Had Framed Order u/s 143(3)
ITAT Mumbai allowed the assessee’s appeal & directed CIT(A) to adjudicate on merits. The Tribunal held that CIT(A) wrongly treated assessment as ex parte u/s 144 & remanded it, instead of deciding the substantive issue of Transfer Pricing adjustment
Assessee, a global IT services company, filed return declaring income of Rs.1738.57 crore. AO completed assessment on 19.12.2023 u/s 143(3) r.w.s. 144B after considering assessee’s submissions & made a TP adjustment of Rs.4,20,051/- on corporate guarantee commission, enhancing ALP from 1.25% (as per assessee’s benchmarking) to 1.50%. However, on the face of order, section was inadvertently mentioned as 144 r.w.s. 144C(3) & 144B.
On appeal, CIT(A) set aside the assessment & remanded it to AO under the impression that it was an ex parte order u/s 144. ITAT noted that this was a clear mistake since AO had in fact completed assessment after due submissions & had specifically concluded it u/s 143(3) r.w.s. 144B. Tribunal held that CIT(A) should have corrected the erroneous reference to section 144 & adjudicated the TP issue on merits rather than mechanically remanding.
Accordingly, ITAT set aside CIT(A)’s order & restored matter to CIT(A) with direction to decide the TP issue afresh on merits after giving opportunity of hearing
