In the recent ruling Honorable Tribunal dismissed the rectification application made by the Transfer Pricing Officer (TPO) for the rectification of directions issued by the Dispute Resolution Panel (DRP).
Honorable Tribunal state that from a plain and careful reading of Rule 13 of the Income Tax (Dispute Resolution Panel)Rules, 2009 (“the Dispute Resolution Rules”) makes it clear and unambiguous that the rectification powers of the said Rule by the DRP can be exercised only in one of the three circumstances – namely, (a) suo motu, i.e., on its own by the DRP; (b) on an application made by the eligible assessee, or (c) on an application made by the Assessing Officer. The scheme of Rule 13 does not visualize any rectification of mistake, by the DRP, on an application by the TPO. Therefore, the application filed by the Transfer Pricing Officer before the Dispute Resolution Panel, irrespective of its nomenclature, was liable to be dismissed.
Honorable Tribunal also clarifies the scope of the terms “mistake apparent from record” and “error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions”. It states that a mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long-drawn process of reasoning on points on which there may conceivably be two opinions. A decision on a debatable point of law is not a mistake apparent from the record. Therefore, the scope of mistakes apparent from the record is inherently limited. In this respect, this Tribunal relied upon the following judicial rulings:
1. ITO Vs Volkart Brothers [(1971) 82ITR 50 (SC)],
2. CIT Vs Ramesh Electric & Trading Co [(1993) 203 ITR 497 (Bom)]
3. CIT Vs Reliance Telecom Limited [(2021) 133 taxmann.com 41 (SC)]
Shapoorji Pallonji Bumi Armada Pvt. Ltd. v. ACIT (Mum.)(Trib.) (ITA No. 1353/Mum/2021 dated June 27, 2022) (Bench ‘J’ )(AY. 2016 -17)
