TaxTMI 
TaxTMI 
2020 (10) TMI 1210
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....ent be passed. The interim order was however not extended beyond 29.03.2019. 2. As a result, the 3rd respondent/Deputy Commissioner of Income Tax took up proceedings for continuation and finalization of assessment in the absence of an interim order. A draft order of assessment under Section 144C of the Act came to be passed effectively rendering WP.No.5760 of 2019 infructuous. The draft order of assessment came to be challenged in WP.No.35246 of 2019. Since the learned counsel for the petitioner had challenged the basis of reference to the Transfer Price Officer (TPO), the first writ petition was also kept pending and both matters were taken up for final hearing together. 3. The challenge to the order of assessment relates back to the reference made to the TPO dated 19.12.2018 and I am thus called upon to decide on the legality or otherwise of this reference. If the reference dated 19.12.2018 is found to have been issued in excess of jurisdiction, then the notice for assessment and all proceedings thereafter would be rendered invalid. If on the other hand, I find that notice dated 19.12.2018 had been validly issued, there would be no infirmity in the proceedings for assessmen....
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....to the TPO to determine ALP. Reliance in this regard was placed on a Instruction issued by the Central Board of Direct Taxes (CBDT) bearing No.3 of 2016 dated 10.03.2016. The relevant portion of the Instruction reads as follows: 3.2. All cases selected for scrutiny, either under the Computer Assisted Scrutiny Selection (CASS) system or under the compulsory manual selection system (in accordance with the CBDT's annual instructions in this regard for example, instruction No.6/2014 for selection in F.Y.2014-15 and Instruction No.8/2015 for selection in F.Y 2015-16), on the basis of transfer pricing risk parameters (in respect of international transactions or specified domestic transactions or both) have to be referred to the TPO by the AO, after obtaining the approval of the jurisdictional Principal Commissioner of Income-tax (PCIT) or Commissioner of Income-tax (CIT). The fact that a case has been selected for scrutiny on a TP risk parameter becomes clear from a perusal of the reasons for which a particular case has been selected and the same are invariably available with the jurisdictional AO. Thus, if the reason or one of the reasons for selection of a case for scrutiny is....
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.... in the scrutiny notice dated 27.07.2017. (xv) On 24.12.2019, the petitioner has approached the Dispute Resolution Panel (DRP) objecting to the draft order dated 27.11.2019. The assumption of jurisdiction by the TPO however, is not a matter of challenge before the DRP. 5. The learned revenue counsel has circulated a copy of Instruction No.15 of 2015 issued by the Board on 16.10.2015 which sets out the revised and updated Guidance notes for implementation of T.P. provisions. The Instruction mandates that in order for the AO to make a reference to the TPO, he should first ascertain that the assessee in question has entered into international transactions, and gather basic details in connection therewith from the Form-3CEB, such as the associated enterprises with which the transaction is entered into, the documents maintained and the methodology followed. 6. Upon an examination of the aforesaid documents and details, the Assessing Officer should arrive at a prima facie belief on whether a reference to the TPO is at all required. This is a preliminary stage which does not require detailed enquiry or scrutiny to verify the correctness of otherwise of the ALP. As an added ....
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.... To The Principal Commissioner of Income-tax, Chennai-3, Chennai. THROUGH THE ADDL. CIT, CORPORATE RANGE-3, CHENNAI Respected Sir, \ Sub: Computation of Arms Length Price - Request for approval - reference to Transfer Pricing Officer (TPO) - in the following case - AY 2016-17 - Reg. ***** For the A.Y. 2016-17, the following scrutiny case has been selected for Limited scrutiny through CASS and notice u/s 143(2) was duly served on the assessee. On examination of Form 3CEBN in this case, it is observed that the assessee has entered into international transactions with its associated enterprises as mentioned below: S.No. Name of the Assessee PAN A.Y. CASS Reason 1 M/s. Transsys Solutions Pvt. Ltd. AADCT4603N 2016-17 (v) Large Aggregate value of total employee cost in comparison to aggregate value of International transactions as per books of accounts. (Form 3CEB) Name and address of the associated enterprise with whom the International transaction has been entered into. Description of services provided / availed to/from the associated enterprise Amount paid/received or payable /receivabl....