Fidelity Information Services India Private Limited, New Delhi V. JCIT, Circle-1(1), Chandigarh

ITA 649/CHANDI/2022

AI Insights

The case involves Fidelity Information Services India Private Limited, the appellant, contesting an order from the CIT(A) which dismissed their appeal regarding a rectification order issued by the Assessing Officer (AO). The rectification pertained to a transfer pricing adjustment and was initially set at INR 4,32,63,019. The CIT(A) dismissed the appeal mistakenly believing it was settled under the Vivad se Vishwas Act, 2020, which the appellant had not opted for. The Tribunal found that the CIT(A) had erred in dismissing the appeal without proper consideration and without providing an opportunity for the appellant to be heard.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127606 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 24-05-2023
• Assessment Year: 2009-2010
• Appeal Filed On: 06-10-2022
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MISS. SUMISHA
• Keywords: Transfer pricing; Rectification of order; Opportunity of being heard; Principle of natural justice; Difference of opinion; Competent authority; Change of opinion
• Section: 154; 143(3); 250; 144C

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ “ए” , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH ी आकाश द प जैन, उपा य एवं ी #व$म &संह यादव, लेखा सद+य BEFORE: SHRI. AAKASH DEEP JAIN, VP & SHRI. VIKRAM SINGH YADAV, AM ITA NO. 649/Chd/ 2022 Assessment Year : 2009-10 Fidelity Information Services India Private Limited S-405, LGF, Greater Kailash Part II, New Delhi-110048, India The JCIT, Circle 1(1) Chandigarh PAN NO: AAGCS0395D Appellant Respondent ! " Assessee by : Miss. Sumisha, C.A # ! " Revenue by : Shri Rohit Sharma, CIT DR $ % ! & Date of Hearing : 25/05/2023 '()* ! & Date of Pronouncement : 26/05/2023 आदेश/Order PER VIKRAM SINGH YADAV, A.M. : This is an appeal filed by the Assessee against the order of the Ld. CIT(A), NFAC, Delhi dt. 08/08/2022, wherein the assessee has raised the following grounds of appeal: 1. That on the facts and in the circumstances of the case and in law, the CIT(A) has erred in arbitrarily dismissing the appeal of the Appellant without appreciating the fact that the Appellant had not opted to settle the subject appeal filed before the CIT(A) under the Direct Tax Vivad se Vishwas Act, 2020 ("VSV Act"). 2. That on the facts and in the circumstances of the case and in law, the CIT(A) has grossly erred in not providing an opportunity of being heard to the Appellant before passing the order and thus, the order passed by the CIT (A) is bad in law and void ab initio. 3. That on the facts and in the circumstances of the case and in law, the CIT(A) has erred in not adjudicating the grounds of appeal raised by the Appellant and instead summarily dismissing the appeal of the Appellant. 4. That on the facts and in the circumstances of the case and in law, the CIT(A) has not appreciated that Assessing Officer ("AO") has erred in assessing the total income of the Appellant at INR 4,73,54,048 under section 154 of the Act as against the returned income of INR 40,91,029. 2 5. That on the facts and in the circumstances of the case and in law, the CIT(A) erred in not appreciating that the rectification order passed by AO under section 154 of the Act without invoking the mandatory provisions of section 144C of the Act is bad in law, invalid and void ab initio. 6. That on the facts and in the circumstances of the case and in law, the CIT(A) has erred in not appreciating that AO has grossly erred in making an amendment to the original assessment order dated February 1, 2014, in contravention of section 154(3) of the Act, without following the principles of natural justice. 7. That on the facts and in the circumstances of the case and in law, the CIT(A) erred in not appreciating that the order passed by the AO suffers from lack of jurisdiction as section 154 of the Act can be invoked only in the case of mistakes which are apparent from the record and not in case of change of opinion or where the issues are debatable. 8. That on the facts and in the circumstances of the case and in law, the CIT(A) has erred in not considering that AO has arbitrarily rejected the approach adopted by the Transfer Pricing Officer ("TPO") while determining +/- 5 per cent variation of international transaction permissible as per proviso to section 92C(2) of the Act. 9. Without prejudice and on the facts and in the circumstances of the case and in law, the Learned Transfer Pricing Officer ("Ld. TPO") and Learned Dispute Resolution Panel ("Ld. DRP") erred in accepting comparable companies which were functionally not comparable to the Appellant from the accept/ reject matrix of the fresh search provided by the Appellant to the Ld. TPO.” 2. During the course of hearing, the Ld. AR submitted that the subject appeal has been filed by the assessee challenging the order dated August 8, 2022 passed by the Commissioner of Income Tax (Appeal) under section 250 of the Income-tax Act, 1961 ("Act"). It was submitted that the appeal before the CIT(A) for the subject assessment year was filed by the assessee challenging the rectification order dated February 1, 2014 passed by the Assessing Officer under section 154 of the Act whereby the transfer pricing adjustment was computed at INR 4,32,63,019. It was submitted that the said rectification order was passed by the AO pursuant to the issuance of section 154 notice dated March 29, 2018 proposing to rectify the order dated February 1, 2014. 3. It was submitted that the ld CIT(A) vide the order dated August 8, 2022 inadvertently dismissed the appeal filed by the Appellant holding it as infructuous on an incorrect understanding that the Appellant had settled the subject appeal under the Vivad se Vishwas ("VSV") Act. The CIT(A) had erred in not appreciating that the appeal filed by the Appellant before the CIT(A) was not settled under the VSV. 3 4. It was further submitted that the ld CIT(A) before passing the said order dated August 8, 2022, failed to provide the Appellant any opportunity to submit its reply or opportunity of being heard. 5. It was further submitted that the AO had passed the final assessment order dated February 1, 2014 under section 144C(13) read with section 143(3) of the Act. The AO, vide the said order, had made an addition of INR 3,44,47,773 on account of foreign travelling expenses and deleted the transfer pricing adjustment pursuant to the directions of the Dispute Resolution Panel ("DRP"). 6. It was submitted that the Appellant, challenging the corporate tax addition of INR 3,44,47,773 made vide assessment order dated February 1, 2014, filed an appeal bearing ITA No. 379/Chd/ 2014 before the Hon'ble Delhi Bench of the Tribunal. The Hon'ble Tribunal vide order dated December 13, 2018 restored the issue (corporate tax addition pertaining to foreign travelling expenses) to the file of DRP for adjudicating afresh in accordance with law after providing due and reasonable opportunity of being heard. 7. It was submitted that since the objections filed by the Appellant for the subject assessment order, in view of the directions of the Hon'ble Tribunal, were pending adjudication before the DRP when VSV Scheme was launched, the Appellant sought to settle the subject objections pending before the DRP under the VSV Scheme by filing requisite forms. In this regard, it is submitted that Form 5 was issued by the Designated Authority certifying the settlement of the pending objections bearing No. 121 (ITAT set- aside/ restored issue to DRP) for the subject assessment year. A Copy of Form 5 issued in this regard is placed at page 8 of the paperbook. 8. In view of the above laid down factual matrix, it was submitted that the CIT(A) has erred in dismissing the appeal of the Appellant for the subject assessment year vide order dated August 8, 2022 without appreciating that the said appeal was never settled by the Appellant under the VSV Act. 9. Per Contra, the Ld. DR relied on the orders of the authorities below. 4 10. After hearing both the parties and pursuing the material available on record, it is manifestly clear that the appeal of the assessee has been wrongly dismissed by the ld CIT(A) holding that the assessee has opted for the VSV Scheme and the requisite Form 5 has since been issued by the Competent authority. On perusal of Form 5, it is clear that the same relates to matter which were set-aside by the Tribunal and pending before the DRP and doesn’t relate to matter which were arising out of the rectification order passed by the AO against which the assessee moved in appeal before the ld CIT(A). In view of the same, we set-aside the impugned order of the ld CIT(A) and the matter is set-aside to ld CIT(A) to examine the same afresh as per law after providing reasonable opportunity to the assessee. 11. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 26/05/2023. Sd/- Sd/- आकाश द प जैन #व$म &संह यादव (AAKASH DEEP JAIN) ( VIKRAM SINGH YADAV) उपा य / VICE PRESIDENT लेखा सद+य/ ACCOUNTANT MEMBER AG Date: 26/05/2023 ( + ! , - . - Copy of the order forwarded to : 1. The Appellant 2. The Respondent 3. $ / CIT 4. - 0 ग 2 3 & 2 3 456 ग7 DR, ITAT, CHANDIGARH 5. ग 6 8 % Guard File ( + $ By order, 9 # Assistant Registrar