Back
2025 Supreme(Guj) 1048
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
BHARGAV D. KARIA, D.N. RAY, JJ.
The Principal Commissioner Of Income Tax 1 Ahmedabad – Petitioner
Versus
M/s. Bosch Rexroth (India) Ltd. – Respondent
R/Special Civil Application No. 14656 of 2024
Decided On : 25-03-2025
For the Petitioner: Mr. Varun K. Patel.
The Tribunal's exercise of powers under Section 254(2) to rectify its order was justified, as no substantial question of law arose from its decision.
Headnote:
(A) Income Tax Act, 1961 - Sections 143(2), 92CA(1), 254(2) - Challenge to Tribunal's order allowing rectification of mistake - Tribunal recalled its earlier order for re-adjudication of Transfer Pricing Adjustment - Court found no substantial question of law arising from the Tribunal's decision. (Paras 3.8, 6, 8)
(B) Transfer Pricing - The Tribunal's decision to allow the adjustment of guarantee fees was justified based on the earlier year's findings and the absence of error in the original order. (Paras 5.1, 7)
Facts of the case:
The petitioner challenged the Tribunal's order allowing a rectification application regarding Transfer Pricing adjustments for the Assessment Year 2010-11, following a previous adjustment for the Assessment Year 2009-10. The Tribunal had dismissed the petitioner's appeal and allowed the respondent's cross-objection. (Paras 3.6, 4)
Findings of Court:
The Tribunal's decision to recall its order was justified based on the precedent set in the earlier assessment year, confirming the absence of substantial questions of law. (Paras 6, 8)
Issues: Whether the Tribunal erred in allowing the rectification application under Section 254(2) and whether there was a mistake apparent on record. (Paras 5, 7)
Ratio Decidendi: The court held that the Tribunal acted within its powers under Section 254(2) and that the findings from the earlier assessment year supported the adjustment of guarantee fees. (Paras 6, 8)
Result: Petition dismissed.
ORDER :
(BHARGAV D. KARIA, J.)
1. Heard learned Senior Standing Counsel Mr.Varun K.Patel for the Petitioner.
2. By this petition filed under Article 226 of the Constitution of India, the petitioner has challenged the Order dated 24.01.2024 passed by the Income Tax Appellate Tribunal, “D” Bench, Ahmedabad (for short “the Tribunal”), in Misc. Application No.85/Ahd/2023 in IT(TP)A No.930/Ahd/2015 for the Assessment Year 2010-11.
3. The brief facts of the case can be summarized as under:-
3.1 The respondent filed the return of income on 12.10.2010 declaring total income of Rs.32,83,18,600/- for the Assessment Year 2009-10.
3.2 The case of the petitioner was selected for scrutiny and the notice under Section 143(2) of the Act was issued on 24.08.2011.
3.3 The Assessing Officer made reference under Section 92CA(1) of the Act to the Transfer Pricing Officer for computation of Arm’s Length Price (ALP) in relation to the international transactions of the Respondent -Assessee.
3.4 The Transfer Pricing Officer passed an Order dated 20.01.2014 under Section 92CA(3) of the Act, determining upward adjustment of Rs.5,23,55,986/-. The Assessing Officer had initially passed the draft Assessment Order dated 11.03.2014 under Section 143(3) read with Section 144C(1) of the Act. The Respondent- Assessee selected the option of raising objections before the Dispute Resolution Panel against the said draft order. The Assessing Officer thereafter passed the Assessment Order dated 12.02.2015 under Section 143(3) read with Section 144C(13) of the Act in conformity with the directions of the Dispute Resolution Panel for the Assessment Year 2010-11.
3.5 Being aggrieved, the Respondent-Assessing Officer preferred the Tax Appeal before the Tribunal, which was registered as IT(TP)A No.930/Ahd/2015. The petitioner also preferred an appeal being IT(TP)A No.850/Ahd/2015. Being aggrieved by the Assessment Order, the Respondent-Assessing Officer filed the Cross-objection No.84/Ahd/2015 in the appeal filed by the petitioner.
3.6 The Tribunal by common judgment and order dated 31.05.2023, dismissed the appeal filed by the petitioner and the appeal of the Respondent-Assessee was partly allowed whereas, the Cross-objection was dismissed.
3.7. The Respondent-Assessee, thereafter, filed Misc. Application No. 85/Ahd/2023 under Section 254(2) of the Act for rectification of mistake in the Order dated 31.05.2023, passed by the Tribunal in IT(TP)A No. 930 of 2015 of the Respondent -Assessee.
3.8. The Tribunal by the impugned Order dated 24.01.2024 allowed the Misc. Application filed by the Respondent- Assessee by recalling its order dated 31.05.2023 passed in IT(TP)A No.930 of 2015 for the limited purpose of re-adjudicating Ground No.4 with regard to the Transfer Pricing Adjustment in relation to the international transaction of payment of guarantee fees by the Respondent- Assessee to the Associated Enterprise.
4. Being aggrieved by the order dated 24.01.2024 passed by the Tribunal, allowing the Misc. Application filed by the Respondent- Assessee, the Petitioner-Revenue has preferred this petition for quashing and setting aside the same.
5. Learned Senior Standing Counsel Mr.Varun Patel for the petitioner submitted that the Tribunal could not have entertained the Misc. Application filed by the Respondent- Assessee under Section 254(2) of the Act as there is no mistake apparent on record. It was submitted that the Tribunal has failed to consider the comparable cases of earlier year i.e., Assessment Year 2009-10 relied upon by the petitioner, wherein, the Tribunal has deleted the similar addition made by the Assessing Officer/TPO, as it was never cited but, only the decision of the CIT (Appeals) was pointed out during the course of hearing of the appeal by the Assessee. It was submitted that the reference to the order of the CIT(Appeals) was made in the submissions of the Assessee, filed before the Tribunal. Learned Senior Standing Counsel Mr.Patel invited the attention of the Court to the
