Rolls-Royce Marine India Pvt. Ltd v. The Income-Tax Appellate Tribunal & Anr

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.755 OF 2019 Rolls-Royce Marine India Pvt. Ltd..... Petitioner versus The Income-tax Appellate Tribunal & Anr.... Respondents….... Mr.Paras Savla a/w Mr.Harsh Shah a/w Mr.Pratik Poddar, Advocate for Petitioner.Mr.Paras Savla a/w Mr.Harsh Shah a/w Mr.Pratik Poddar, Advocate for Petitioner. Mr.Suresh Kumar, Advocate for Respondent.Mr.Suresh Kumar, Advocate for Respondent. CORAM : AKIL KURESHI &SARANG V. KOTWAL, JJ.DATE: 18[th] APRIL, 2019. P.C. : 1. Heard learned Counsel for the parties for final disposal of the Petition. Petitioner's grievance is limited and arises out ofan order dated 22/10/2018 passed by the Income Tax AppellateTribunal (for short 'Tribunal'). 2. The brief facts are as under; The Petitioner is a company registered under the 2 / 6 18-WP-755-19.odtCompanies Act, 1956. For the assessment year 2012-2013, thePetitioner had filed return of income, which was taken inscrutiny by the Assessing Officer. The Assessing Officer referredcertain transactions of the assessee for Transfer PricingAdjustment ('TPA' for short). The Transfer Pricing Officerpassed an order dated 18/01/2018 in which he suggestedfollowing two Transfer Pricing Adjustments. 3. In terms of order of Transfer Pricing Officer, theAssessing Officer passed a draft order on 01/03/2016incorporating the above Transfer Pricing Adjustments. Againstsuch draft order, the Petitioner approached the DisputeResolution Panel (for shot 'DRP'). The DRP passed order dated09/09/2016 upholding both the adjustments. The AssessingOfficer thereupon passed the order of assessment on 3 / 6 18-WP-755-19.odt 30/11/2016 which obviously contained both the TransferPricing Adjustments. Against such order of assessment, thePetitioner filed an Appeal before the Tribunal disputing both theadjustments. The Petitioner's grounds Nos.8 to 12 were inrelation to the amount of Rs.4,88,96,708/- on account ofpayment of Corporate fees. The Petitioner had also filed anApplication for admitting additional evidence before theTribunal. The Tribunal disposed of the Appeal on 18/10/2017.The Tribunal allowed the Petitioner's Application for productionof additional evidence. However, with respect to the Petitioner'ssubstantial challenge to the addition of Rs.4,88,96,708/-, therewas no finding by the Tribunal. In relation to the addition ofRs.4,88,96,708/-, which was the other head of Transfer PricingAdjustments, the Tribunal deleted the same. 4. The Petitioner thereupon filed an Application forrectification before the Tribunal. The Petitioner urged that theTribunal had allowed the additional evidence to be brought onrecord, but had not given any directions to the Assessing Officer 4 / 6 18-WP-755-19.odtto reconsider the question of addition of Rs.4,88,96,708/- on thebasis of such additional evidence. Neither the Tribunal had onits own decided the issue with or without the aid of suchadditional evidence. In other words, according to Applicant, thisground of challenge remained unanswered by the Tribunal. 5. The Tribunal rejected such Application by theimpugned order on the ground that the Petitioner's plea fallsunder the realm of reconsideration of the Tribunal's order,which, within the jurisdiction of rectification, cannot be done. 6. We have heard learned Counsel for the parties. Petitionis strongly opposed by learned Counsel Mr.Suresh Kumar. Hesupported the order passed by the Tribunal contending that thepowers of rectification are limited. In exercise of such powers,the Tribunal cannot review its own decision. 7. In our opinion, however, this was a fit case where theTribunal ought to have exercised the rectification powers. We 5. The Tribunal rejected such Application by theimpugned order on the ground that the Petitioner's plea fallsunder the realm of reconsideration of the Tribunal's order,which, within the jurisdiction of rectification, cannot be done. 6. We have heard learned Counsel for the parties. Petitionis strongly opposed by learned Counsel Mr.Suresh Kumar. Hesupported the order passed by the Tribunal contending that thepowers of rectification are limited. In exercise of such powers,the Tribunal cannot review its own decision. 7. In our opinion, however, this was a fit case where theTribunal ought to have exercised the rectification powers. We 5 / 6 18-WP-755-19.odtmay recall that, before the Tribunal the assessee had raisedspecific ground to challenge the addition of Rs.4,88,96,708/-. Infact, this was the substantial part of the Petitioner's challenge inthe Appeal before the Tribunal. In support of such ground, thePetitioner had also sought permission to produce additionalevidence. Such permission was granted. Additional evidence wasallowed to be brought on record. Thereafter the choice beforethe Tribunal was either to ask the Assessing Officer to take suchadditional evidence into account and re-decide the issue or to doitself. Unfortunately, the Tribunal did neither. In other words,the Tribunal disposed of the Petitioner's Appeal without givingany answer to the Petitioner's challenge to the addition ofRs.4,88,96,708/- made by the Assessing Officer. The power ofrectification of the Tribunal flowing from section 254(2) of theIncome Tax Act, 1961, howsoever, restricted, would definitelybe available in a situation like the present one. When theAppellant before the Tribunal raises a ground, presses theground in service, it is the duty of the Tribunal to dispose ofsuch ground and give its opinion thereon. A ground which is 6 / 6 18-WP-755-19.odt raised and not given up when remains undecided in thejudgment of the Tribunal, gives rise to an error on the face ofrecord, which is rectifiable. 8. Under such circumstances, the impugned order of theTribunal is set aside. The Petitioner's request for rectification ofthe original judgment of the Tribunal dated 18/10/2017 isgranted. The Appeal is revived for the limited purpose ofdeciding the assessee's ground of challenge to the addition ofRs.4,88,96,708/-. The Tribunal would hear both the sides onthis limited issue and dispose of the Appeal in accordance withlaw. 9. Petition is disposed of accordingly. (SARANG V. KOTWAL, J.) (AKIL KURESHI, J.)