Income Tax Appellate Tribunal - Bangalore
3M India Ltd, Bangalore vs Addl.Cit, Ltu,, Bangalore on 31 March, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
'B' BENCH, BANGALORE
BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER
and
SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER
MP No.42/Bang/2017
(In IT(TP)A No.727/Bang/2011)
(Assessment year: 2005-06)
and
MP No.140/Bang/2016
(In IT(TP)A No.725/Bang/2011)
(Assessment year: 2005-06)
M/s. 3M India Ltd.,
No.48/51, Electronic City,
Hosur Road,
Bangalore-560 100. ... Petitioner
PAN:AAACB 5724H
Vs.
Addl. Commissioner of Income-tax (LTU),
Bangalore. ... Respondent
AND
Petitioner by : Shri Sharath Rao, CA.
Respondent by : Shri Kamaladar, Standing Counsel
Date of hearing : 17/03/2017
Date of pronouncement : 31/03/2017
O R D E R
Per INTURI RAMA RAO, AM :
These are MPs filed by the assessee praying that the order of the Tribunal dated 13/05/2016 in IT(TP)A No.725 & 727/Bnag/2011 remanding issues to the AO/TPO for verification of whether services are actually rendered in respect of provision for administrative and business support services and technical MP No.42/Bang/2017 Page 2 of 5 services is unwarranted as the finding of the Tribunal in para.4 of the order that evidence in support of business services was furnished for the first time before the Tribunal is contrary to the fact that information filed for the first time before the CIT(A).
2. We heard rival submissions and perused material on record. The Tribunal, in the impugned order, while dealing the issue of administrative and business support services and technical fees held that ALP of the above transactions cannot be determined at nil on the ground that no benefit was derived by the assessee- company by incurring such expenditure and therefore there was no necessity of incurring of such expenditure. However, this Tribunal held that onus lies on the assessee-company to prove that above services were actually rendered by the AE company. The assessee-company had filed, for the first time, certain evidence before the CIT(A) in an attempt to prove that services are actually benefitted the assessee-company. The CIT(A), on considering that evidenced had granted relief in respect of expenditure incurred on IT support services to the extent of Rs.1,16,13,640/-. The CIT(A) had granted relief to the assessee- company considering benefits derived by the assessee-company on account of incurring of such expenditure. But on perusal of the order of the CIT(A) (paras.10.201 and 10.202) it is not discernable that the CIT(A) has come to the conclusion that services are actually rendered by the AE in respect of IT support services. Therefore the Tribunal, in its wisdom, felt that the MP No.42/Bang/2017 Page 3 of 5 matter requires remand to the AO/TPO for due verification of aspect of rendition of actual services as nothing is discernable from the order of the CIT(A) that the CIT(A) has reached satisfaction as to rendition of services by AE. It appears from perusal of the order of the CIT(A) that the CIT(A) had dealt this issue from this perspective. The Tribunal has already rendered a finding that evidence on record does not conclusively prove that services are actually rendered by AE. It is further mentioned that the assessee-company merely described the nature of services rendered which does not conclusively prove that services are rendered by the AE. This issue undoubtedly requires verification ofvarious factual evidence. Therefore, Tribunal felt that this issue requires remand to the AO/TPO for fresh adjudication in accordance with law. Further jurisdiction of CIT(A) on issues involving facts can be exercised only if there is a finding by lower authorities. The CIT(A) can only give a finding as to correctness or otherwise of the decision of the lower authorities in the given facts of the case. It is not the case of the assessee-company that it has filed this information before TPO/AO and he had failed to render a finding on this issue. The submission of the assessee- company that when the CIT(A) had called for information on his own, there is no need to call for remand report from the AO is irrelevant in the facts of the present case because assessee- company has not proved that the CIT(A) has called for information/evidence to prove that services are actually rendered MP No.42/Bang/2017 Page 4 of 5 by the assessee-company. This Tribunal remanded the matter after considering the entire submissions of the assessee-company and had come to conclusion that the case requires remand to the TPO/AO for due verification of the evidence on the aspect of rendition of services. Therefore, we do not find any illegality or mistake apparent in the impugned order so as to enable us to modify the direction of remand to the AO/TPO. Further it is trite law that in the proceedings u/s 254, the final conclusion reached by the Tribunal in the earlier order cannot be disturbed. Reliance in this regard can be placed on the decision of the jurisdictional High Court in the case of CIT vs. McDowell & Co.Ltd. (269 ITR
451) wherein it was held as follows:
'9. We have given our anxious consideration to the issue. Section 35(1)(e) provides that with a view to rectifying any mistake apparent from the record, the Tribunal may amend any order passed by it under section 24. Subsection (5) of section 35 provides that where an amendment is made under section 35, an order shall be passed in writing by the Tribunal. The power vested in the Tribunal, by section 35, is only to amend the order, to rectify any mistake apparent from the record and not to review its order. Section 35 also clearly states the mistake should be rectified by amending the original order. Therefore, rectification presupposes the continued existence of the original order. When an amendment is made to the original order, the amendment merges with the original order. The original order is read with the amendment thereto. If the power to rectify the original order by way of amendment to that order is to be interpreted as permitting recalling of the original order, then the original order ceases to exist and a fresh original order is made. Recalling the original order involves rehearing of the matter which is not the purpose and intention of the provision for rectification. When the wording of the statutory provision are clear and unambiguous and can be given effect without any difficulty, it is not permissible to give an extending meaning to the provision. The words "amended the original order to rectify any mistake apparent from the record" does MP No.42/Bang/2017 Page 5 of 5 not mean recall the original order, rehear the matter and replace the original order by a fresh order. The purpose can be achieved by continuing the original order and passing an amendment order stating whatever is necessary to rectify the mistake apparent from the record. Whether the issue involved is one or more makes no difference, as what is contemplated and provided for is an amendment to the original order and not an order in substitution of the original order.
The finding of the Tribunal that information was filed for the first time in para.4.1 is hereby deleted.
3. The MP is disposed on the above lines.
Order pronounced in the open court on this 31st March, 2017 Sd/- sd/-
(VIJAY PAL RAO) (INTURI RAMA RAO)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Place : Bangalore
D a t e d : 31/03/2017
srinivasulu, sps
Copy to :
1 Appellant
2 Respondent
3 CIT(A)
4 CIT
5 DR, ITAT, Bangalore.
6 Guard file
By order
Assistant Registrar
Income-tax Appellate Tribunal
Bangalore