TaxTMI 
TaxTMI 
2014 (5) TMI 114
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....er of convenience, these appeals were heard together and are being disposed off by way of this consolidated order. 4. Facts in brief:- The Assessing Officer made a reference under section 92CA(1) of the Act to the TPO for the computation of arm's length price (for short "ALP") in relation to the international transactions. In pursuance thereof, the TPO passed an order under section 92CA(3) on 23rd January 2008, proposing the adjustment of Rs. 12,19,83,099 for the assessment year 2005-06 and vide order dated 6th February 2008, proposing adjustment of Rs. 9,18,20,608, for the assessment year 2006-07. The Assessing Officer, after the receipt of the order of the TPO, computed the income of the assessee in conformity with the ALP determined by the TPO. Thereafter, on the basis of transfer pricing order for the subsequent assessment year i.e., 2007-08, the Commissioner issued show cause notice dated 23rd February 2012 for both the years under section 263 for cancelling the assessment order and also why the case should not be referred again to the TPO to determine the ALP of international transaction and determining the transfer pricing adjustment as done by the TPO in assessment yea....
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....52 TTJ 265 (Mum.) has held that the Commissioner has no jurisdiction over the TPO administratively and, therefore, the Commissioner could not have revised the order under section 92CA(3) passed by the TPO. Thus, when the TPO's order cannot be revised by the Commissioner under section 263, then the impugned order cancelling the TPO's order and consequently the assessment order has to be set aside. Thus, he submitted that the issue involved is squarely covered by the decision of the co-ordinate bench of the Tribunal in Essar Steel Ltd. (supra). 8. The learned Departmental Representative, Mr. Ajeet Kumar Jain, on the other hand, submitted brief written submissions to highlight his points. The said submissions, for the sake of ready reference, are reproduced herein below:- "The issue before the Honourable bench is "whether the Jurisdictional CIT has the powers u/s 263 of the Act to revise the order of the Assessing Officer, when the order is passed in conformity with the arm's length price determined by the TPO and the order of the TPO is erroneous or prejudicial to the interest of the revenue? The arm's length price ....
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....lso under the Act and the Commissioner is empowered to examine the records of transfer pricing proceedings. 7. Section 263(1) refers to the order passed by the Assessing Officer. The phrase "Assessing Officers" is defined in Section 2(7 A) of the Act. However an explanation has been placed below Section 92CA(7) of the Act which is reproduced hereunder: Explanation. -For the purposes of this section, "Transfer Pricing Officer" means a Joint Commissioner or Deputy Commissioner or Assistant Commissioner authorised by the Board to perform all or any of the functions of an Assessing Officer specified in sections 92C and 92Din respect of any person or class of persons. 8. Thus it is clear from the explanation reproduced above, that the transfer pricing officer is an Assessing Officer for the purpose of Section 92C and 920 of the Act. 9. Therefore the Commissioner is fully empowered to examine the records of any proceedings before the transfer pricing officer and if the determination of arm's length price is found to be erroneous in so far as it is prejudicial to the interest of rev....
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.... erroneous. Accordingly, he set aside the assessment order with direction to refer the issue of adjustment of arm's length value of international transaction to the TPO for re-consideration and then to pass assessment order afresh in view of the findings and the directions of the TPO. We find that the co-ordinate bench of the Tribunal, Mumbai Benches, in Essar Steel Ltd. (supra) has held that the Commissioner has no jurisdiction over the TPO administratively and he could not have revised the order passed under section 92CA(3) passed by the TPO. The relevant observations of the Tribunal in Essar Steel Ltd. (supra) are as under:- "13. We are not considering the issue whether the TPO's order could be revised by the CIT or by the Director of IT as that issue is not before us at this moment. As seen from the provisions, the CIT has no jurisdiction over the TPO administratively and therefore, the CIT could not have revised the order u/s 92CA(3) passed by the TPO. Whether the Director of IT can revise the order which he himself has approved as per the Board circular can only be examined when such issue arises but for deciding this issue, we can safely con....