SANGHI INDUSTRIES LIMITED,HYDERABAD V. DCIT., CIRCLE-3(1), HYDERABAD

MA 54/HYD/2025

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Sanghi Industries Ltd filed a Miscellaneous Application seeking recall of an order passed by the Income Tax Appellate Tribunal, Hyderabad, alleging a mistake apparent from the record concerning a transfer pricing adjustment made by the Transfer Pricing Officer. The adjustment was related to power transferred between the assessee's units, which the assessee argued did not warrant a transfer pricing adjustment as they had not claimed any deduction under section 80-IA of the Act. The Tribunal had previously considered a similar case, Star Paper Mills Limited vs. DCIT, but distinguished it based on the facts and law applicable to Sanghi Industries. The Tribunal dismissed the M.A., stating that the issues raised were not mistakes apparent from the record but rather disagreements with the Tribunal's earlier decision, which is not within the scope of section 254(2) of the Act.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 830643 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-01-2026
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-B
• Assessment Year: misc
• Appeal Filed On: 07-07-2025
• Other Referred Cases: Star Paper Mills Limited v. DCIT, Honda Siel Power Products Ltd. v. CIT, ACIT v. Saurashtra Kutch Stock Exchange Ltd., Union of India and Anr. Vs. Paras Laminates Private Limited, CIT Vs. L.G. Ramamurthi and Ors., CIT Vs. Goodlas Nerolac Paints Ltd., Sayaji Iron & Engg. Co. Vs. CIT, CIT Vs. Travancore Titanium Products Ltd., DCIT Vs. Summit Securities Ltd., CIT vs. Reliance Telecom Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SOURABH SOPARKAR
• Keywords: Set aside; Transfer pricing

Judgement Text

" MA No 54 of 2025 Sanghi Industries Ltd Page 1 of 8 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ B ‘ Bench, Hyderabad ŵी रिवश सूद,Ɋाियक सद˟ एवं ŵी मधुसूदन साविड़या लेखा सद˟ समƗ | Before Shri Ravish Sood, Judicial Member A N D Shri Madhusudan Sawdia, Accountant Member M.A. No. 54/Hyd/2025 आ.अपी.सं /ITA No.104/Hyd/2022 (िनधाŊरण वषŊ/Assessment Year: 2017-18) Sanghi Industries Ltd Hyderabad PAN:AAECS5510Q Vs. Deputy Commissioner of Income Tax Circle 3(1), Hyderabad (Appellant) (Respondent) िनधाŊįरती Ȫारा/Assessee by: Shri Sourabh Soparkar, Advocate राज̾ व Ȫारा/Revenue by:: Dr. Sachin Kumar, Sr. DR सुनवाई की तारीख/Date of hearing: 21/11/2025 घोषणा की तारीख/Pronouncement: 21/01/2026 आदेश/ORDER Per Madhusudan Sawdia, A.M.: This Miscellaneous Petition (M.A.) has been filed by the assessee seeking recall of the order passed by this Tribunal in ITA No.104/Hyd/2022 for the Assessment Year 2017–18 dated 23.01.2025, under section 254(2) of the Income Tax Act, 1961 (“the Act”), alleging that there is a mistake apparent from record in the impugned order. 2. The Learned Authorized Representative (“Ld. AR”) submitted that during the year under consideration, an adjustment was made by the Learned Transfer Pricing Officer (“Ld. TPO”) on Printed from counselvise.com MA No 54 of 2025 Sanghi Industries Ltd Page 2 of 8 account of power transferred by the power-generating unit of the assessee to its other units. It was contended that the assessee had never claimed any deduction under section 80-IA of the Act, and therefore, no transfer pricing adjustment could have been made in its case. It was further submitted that on an identical issue, the Kolkata Bench of the Tribunal, in the case of Star Paper Mills Limited v. DCIT (ITA No.127/Kol/2021 for A.Y. 2016–17, dated 26.10.2021), had decided the issue in favour of the assessee. According to the Ld. AR, though the said decision of the coordinate bench was cited before this Tribunal, the same was not followed, resulting in an apparent mistake in the impugned order. Placing reliance on the judgment of the Hon’ble Supreme Court in the case of Honda Siel Power Products Ltd. v. CIT (295 ITR 466) and ACIT v. Saurashtra Kutch Stock Exchange Ltd. (305 ITR 227), the Ld. AR submitted that non-consideration of a decision of a coordinate bench constitutes a mistake apparent from record, warranting recall of the order. It was further argued that even if this Tribunal did not agree with the view taken by the Kolkata Bench, the matter ought to have been referred to the Hon’ble President of the Tribunal for constitution of a Special Bench, and failure to do so itself constitutes a mistake apparent from record. In support of their contention, the assessee relied on the following judicial precedents: a) Union of India and Anr. Vs. Paras Laminates Private Limited, 186 ITR 0722. b) CIT Vs. L.G. Ramamurthi and Ors., 110 ITR 0453. c) CIT Vs. Goodlas Nerolac Paints Ltd., 188 ITR 01. d) Sayaji Iron & Engg. Co. Vs. CIT, 253 ITR 0749. e) CIT Vs. Travancore Titanium Products Ltd., 265 ITR 0526. f) DCIT Vs. Summit Securities Ltd., 11 ITR 088. Printed from counselvise.com MA No 54 of 2025 Sanghi Industries Ltd Page 3 of 8 3. Per contra, the Learned Departmental Representative (“Ld. DR”) strongly opposed the M.A. filed by the assessee. It was submitted that the reliance placed by the assessee on the decision of the Hon’ble Supreme Court in Honda Siel Power Products Ltd. Vs. CIT (Supra) is misplaced, as the said decision was rendered in a context where the Tribunal had failed to consider its own earlier decision in the assessee’s own case. It was contended that in the present case, the decision relied upon is of another bench of the Tribunal in a different assessee’s case, and therefore, the facts are clearly distinguishable. The Ld. DR further submitted that this Tribunal, in para no. 21 of the impugned order, has specifically considered and discussed the decision of the Kolkata Bench in Star Paper Mills Limited vs. DCIT (Supra) and thereafter, for detailed reasons, has held that the said decision was not applicable to the facts of the present case. Therefore, it cannot be said that there was any non-consideration of the decision relied upon by the assessee. It was argued that what the assessee is seeking under the garb of section 254(2) of the Act is a review of the order, which is impermissible in law in view of the decision of Hon’ble Supreme Court held in the case of CIT vs. Reliance Telecom Ltd. (440 ITR 01). Accordingly, the Ld. DR prayed before the Bench to dismiss the M.A. of the assessee. 4. In rejoinder, the Ld. AR also contended that the Tribunal is one unified institution and functions through benches located at different places across the country, and therefore, the contention of the Revenue that the Kolkata Bench and Hyderabad Bench are different tribunals is misplaced. Finally, the Ld. AR submitted that the M.A. of the assessee may be allowed. Printed from counselvise.com MA No 54 of 2025 Sanghi Industries Ltd Page 4 of 8 5. We have carefully considered the rival submissions and perused the material available on record. At the outset, we may observe that the contention raised by the Ld. DR that the Kolkata Bench of the Tribunal and the Hyderabad Bench of the Tribunal are different tribunals is not correct. We agree with the submission of the Ld. AR that the Income-tax Appellate Tribunal is one single institution, which functions through different benches located at various places across the country. There is no dispute on this legal position. We also agree with the contention of the Ld. AR that where a coordinate bench of the Tribunal does not agree with the view taken by another coordinate bench on an identical issue, the proper course ordinarily would be to refer the matter to the Hon’ble President of the Tribunal for constitution of a Special Bench. There is no quarrel with this settled proposition of law. However, the crucial aspect to be examined is whether, in the facts of the present case, such a situation actually arose. On perusal of the impugned order, we find that this Tribunal has specifically taken note of the decision of the Kolkata Bench in the case of Star Paper Mills Limited vs. DCIT (Supra). Thus, this is not a case of non- consideration of a coordinate bench decision. Rather, it is a case where this Tribunal, after considering the decision of the Kolkata Bench, has consciously distinguished the same, on facts and law. Once the decision of the coordinate bench has been considered and distinguished, the question of reference to a Special Bench does not arise. 6. Coming to the reliance placed by the assessee on the judgment of the Hon’ble Supreme Court in Honda Siel Power Products Ltd. Vs. CIT(Supra), we find that the said decision applies to cases where the Tribunal has failed to consider a Printed from counselvise.com MA No 54 of 2025 Sanghi Industries Ltd Page 5 of 8 binding decision relied upon by a party, resulting in prejudice. In the present case, as noted above, the decision of the Kolkata Bench was duly considered and discussed by this Tribunal. Therefore, the ratio laid down in Honda Siel Power Products Ltd. Vs. CIT (Supra) is not applicable to the facts of the assessee’s case. Similarly, the reliance placed by the assessee on the judgment of the Hon’ble Supreme Court in ACIT v. Saurashtra Kutch Stock Exchange Ltd. (Supra) is also misplaced, as that decision again deals with cases of patent and obvious mistakes arising from non-consideration of binding precedent, which is not the situation here. In our considered view, what the assessee is effectively seeking is a re-appreciation of the reasoning adopted by this Tribunal and a reconsideration of the conclusion already reached. Such an exercise clearly falls within the realm of review, which is not permissible under section 254(2) of the Act, as held by the Hon’ble Supreme Court in the case of CIT Vs. Reliance Telecom Ltd. (Supra). In this regards, we have gone through the para nos. 3.1 to 6 of the order of the Hon’ble Supreme Court in the case of CIT Vs. Reliance Telecom Ltd. (Supra), which is to the following effect : 3.1 We have considered the order dated 18-11-2016 passed by the ITAT allowing the miscellaneous application in exercise of powers under section 254(2) of the Act and recalling its earlier order dated 6-9-2013 as well as the original order passed by the ITAT dated 6-9-2013. 3.2 Having gone through both the orders passed by the ITAT, we are of the opinion that the order passed by the ITAT dated 18-11-2016 recalling its earlier order dated 6-9-2013 is beyond the scope and ambit of the powers under section 254(2) of the Act. While allowing the application under section 254(2) of the Act and recalling its earlier order dated 6-9-2013, it appears that the ITAT has re-heard the entire appeal on merits as if the ITAT was deciding the appeal against the order passed by the C.I.T. In exercise of powers under section 254(2) of the Act, the Appellate Tribunal may amend any order passed by it under sub-section (1) of Printed from counselvise.com MA No 54 of 2025 Sanghi Industries Ltd Page 6 of 8 section 254 of the Act with a view to rectifying any mistake apparent from the record only. Therefore, the powers under section 254(2) of the Act are akin to Order XLVII Rule 1 CPC. While considering the application under section 254(2) of the Act, the Appellate Tribunal is not required to re-visit its earlier order and to go into detail on merits. The powers under section 254(2) of the Act are only to rectify/correct any mistake apparent from the record. 4. In the present case, a detailed order was passed by the ITAT when it passed an order on 6-9-2013, by which the ITAT held in favour of the Revenue. Therefore, the said order could not have been recalled by the Appellate Tribunal in exercise of powers under section 254(2) of the Act. If the Assessee was of the opinion that the order passed by the ITAT was erroneous, either on facts or in law, in that case, the only remedy available to the Assessee was to prefer the appeal before the High Court, which as such was already filed by the Assessee before the High Court, which the Assessee withdrew after the order passed by the ITAT dated 18- 11-2016 recalling its earlier order dated 6-9-2013. Therefore, as such, the order passed by the ITAT recalling its earlier order dated 6-9-2013 which has been passed in exercise of powers under section 254(2) of the Act is beyond the scope and ambit of the powers of the Appellate Tribunal conferred under section 254(2) of the Act. Therefore, the order passed by the ITAT dated 18-11-2016 recalling its earlier order dated 6-9-2013 is unsustainable, which ought to have been set aside by the High Court. 5. From the impugned judgment and order passed by the High Court, it appears that the High Court has dismissed the writ petitions by observing that (i) the Revenue itself had in detail gone into merits of the case before the ITAT and the parties filed detailed submissions based on which the ITAT passed its order recalling its earlier order; (ii) the Revenue had not contended that the ITAT had become functus officio after delivering its original order and that if it had to relook/revisit the order, it must be for limited purpose as permitted by section 254(2) of the Act; and (iii) that the merits might have been decided erroneously but ITAT had the jurisdiction and within its powers it may pass an erroneous order and that such objections had not been raised before ITAT. 6. None of the aforesaid grounds are tenable in law. Merely because the Revenue might have in detail gone into the merits of the case before the ITAT and merely because the parties might have filed detailed submissions, it does not confer jurisdiction upon the ITAT to pass the order de hors section 254(2) of the Act. As observed hereinabove, the powers under section 254(2) of the Act are only to correct and/or rectify the mistake apparent from the record and not beyond that. Printed from counselvise.com MA No 54 of 2025 Sanghi Industries Ltd Page 7 of 8 Even the observations that the merits might have been decided erroneously and the ITAT had jurisdiction and within its powers it may pass an order recalling its earlier order which is an erroneous order, cannot be accepted. As observed hereinabove, if the order passed by the ITAT was erroneous on merits, in that case, the remedy available to the Assessee was to prefer an appeal before the High Court, which in fact was filed by the Assessee before the High Court, but later on the Assessee withdrew the same in the instant case. 7. On a perusal of above, it is evident that, the Hon’ble Supreme Court has categorically held that while considering the application under section 254(2) of the Act, the Tribunal is not required to re-visit its earlier order and to go into detail on merits. The powers under section 254(2) of the Act are only to rectify/correct any mistake apparent from the record. If the Assessee was of the opinion that the order passed by the Tribunal was erroneous, either on facts or in law, in that case, the only remedy available to the assessee was to prefer the appeal before the High Court. In the present case of the assessee, the Tribunal has already taken a conscious view. Therefore, in our considered opinion, any further interference at this stage would amount to a review of the order passed by the Tribunal, which is impermissible in law in view of the clear mandate laid down by the Hon’ble Supreme Court. 8. In view of the above discussion, we hold that there is no mistake apparent from record in the impugned order warranting interference under section 254(2) of the Act. The M.A. filed by the assessee is, therefore, devoid of merit and is accordingly dismissed. Printed from counselvise.com MA No 54 of 2025 Sanghi Industries Ltd Page 8 of 8 9. In the result, the M.A. filed by the assessee is dismissed. Order pronounced in the Open Court on 21st January 2026. Sd/- Sd/- (RAVISH SOOD) JUDICIAL MEMBER (MADHUSUDAN SAWDIA) ACCOUNTANT MEMBER Hyderabad, dated 21st January 2026 Vinodan/sps Copy to: S.No Addresses 1 Sanghi Industries Ltd, Sanghi Nagar, Koheda, RR Distt. Telangana 501511 2 DCIT Circle 3(1) Hyderabad 3 Dy. CIT (Transfer Pricing)-2 Hyderabad 4 DRP-1 Bengaluru 5 PCIT Central, Hyderabad 6 DR, ITAT Hyderabad Benches 7 Guard File By Order Printed from counselvise.com "