TaxTMI 
TaxTMI 
TaxTMI 
2020 (7) TMI 35
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....inted out that an assessment order dated 20.06.2016 concerning AY 2014- 16 passed under s.143(3) of the Act assessing the total income at Rs. 27,81,630/-. The order so passed under s.143(3) of the Act was sought to be set aside by the Pr.CIT in exercise of jurisdiction under s.263 of the Act on the ground that despite the domestic transactions undertaken by the assessee covered within the ambit of Section 92BA of the Act for which prescribed form 3CEB issued by the Chartered Accountant was filed by assessee, the AO has failed to refer the matter to the Transfer Pricing Officer (TPO) and in carrying out the necessary consequential inquiries. 3.1 A show cause notice under s.263 of the Act dated 04.12.2018 was issued in the regard was referred to by the learned AR for the assessee which read as under: " On verification of your assessment case records for the A. Y. 2014- 15, i t is seen that the assessment order u/ s. 143 (3 ) of the Income Tax Act, 1961 was passed on 20/ 06/ 2016 by the ITO, Ward- 5 ( 2)(1 ), Ahmedabad, determining the total income at Rs. 27, 81, 630/- against the returned income of Rs. 27, 60, 030/-. However, on examination of the details as made available by you ....
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....ional Commissioner. It was thereafter contended that the aforesaid prescribed form was filed only as a matter of abundant caution and was actually not required to be filed in law owing to the fact that the 'SDT' primarily represented sales made to 'Associate Enterprise'(AE) amounting to Rs. 19,36,86,462/-. The learned AR submitted that 'sales' made to AE/sister concern do not fall within the sweep of meaning of 'SDT' defined under s.92BA(i) of the Act which is narrower in its scope and relates to 'expenditure' in respect of which any payment has been made etc., by the assessee to certain category of persons referred to in Section 40A(2)(b) of the Act. It was emphatically asserted that making sales to sister concerns/AE is totally dissimilar to any expenditure transactions entered by the assessee. It was thus contended that a sale transaction is out of ambit of erstwhile clause (i) of Section 92BA of the Act. 3.3 It was further pointed out that the assessee has not entered into any 'SDT' as spelt under clause (ii) to (vi) of Section 92BA of the Act either, as can be easily seen from the return of income filed by the assessee. The assessee has not entered into any transaction suscep....
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.... as on merits. The learned AR thus urged that order under s.263 of the Act be quashed and the assessment order passed under s.143(3) of the Act be restored. 4. The learned DR, on the other hand, relied upon the order of the Revisional Commissioner and contended that Pr.CIT has rightly invoked its sacrosanct jurisdiction vested under s.263 of the Act in the peculiar facts and circumstances of the case. The learned DR referred to the assessment order and submitted that the assessment order is totally cryptic on all points and has been passed by AO mechanically without any reflection of application of mind. The learned DR thereafter submitted that despite the submission of Form No.3CEB by the assessee himself, the AO has not looked into the same and did not bother to follow the prescribed procedure for reference to the TPO necessary for suitable inquiry. It was submitted that such non-descript assessment order passed flippantly is clearly erroneous insofar as prejudicial to the interest of Revenue. It was next submitted that the Pr.CIT has merely set aside such a perfunctory assessment order for fresh inquiry by the AO to frame assessment in accordance with law and thus no interferen....
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....v) any transaction, referred to in any other section under Chapter VI- A or section 10 AA. to which provisions of sub- section ( 8) or sub- section ( 10 ) of section 80- IA are applicable; or (vi) any other transaction as may be prescribed, and where the aggregate of such transactions entered into by the assessee in the previews year exceeds a sum of f ive crore rupees." Needless to say, the consequential proceedings under s.92BA for referent to TPO and other enquiries contemplated in respect of SDT would trigger only when a stipulated transaction falls within the meaning of definition of SDT as provided under s.92BA of the (supra). 5.3 In the facts and circumstances of the case, it is an admitted fact that the so called 'SDT' under lens of the Pr.CIT primarily represents 'sale' made by the assessee to its sister concern. Naturally a 'sale' made by the assessee gets outrightly excluded from the ambit of clause (i) of Section 92BA of the Act which is meant to deal with 'expenditure' incurred by the assessee to the benefit of sister concern/AE. We thereafter notice assertions made on behalf of the assessee that the assessee has not availed any benefit under s.80IA of the Act or....