TaxTMI 
TaxTMI 
2023 (12) TMI 1262
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.... The assessee is a partnership firm and engaged in manufacturing and export of readymade garments. During the relevant year the assessee had shown to earn income from business. Besides this the assessee has also shown income from house property. The return which was filed by the assessee declaring total income of Rs. 10,02,41,200/- was processed u/s 143(1) and subsequently was selected for scrutiny for which notice u/s 143(2) was issued followed by questionnaire and notice u/s 142(1) and after examining the details the Ld. Assessing Officer (hereinafter referred as the "AO") had accepted the return income by order dated 17.11.2016. 3. However, the Ld. PCIT was not satisfied from the order as the case of assessee was selected for complete....
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....nt order as erroneous due to the following reasons: (i) The AO as required by the Act/Circular did not send your case to the TPO, who has knowledge and ability to properly examine the specified domestic transaction which in your case appears to be in large amount. This was on the issues required to be examined extensively and it was one of the basis on which the case was selected for scrutiny. The AO, the record shows, has failed to apply his mind in making enquiries with regard to Specified Domestic Transactions. (ii) Besides this AO, has not properly examined the amount paid to related persons u/s 40(A)(2)(b) which was also a parameter for selection of the case for scrutiny. (iii) Further AO has failed to verify....
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....anation/comparison/reconciliation have been submitted by the assessee and AO has failed to make detailed enquiry about the rent paid to various parties of Rs. 5,39,328/- which does not have premises/building no. and no rent agreement found in assessment records. Vide reply dated 17.08.2016 the assessee has submitted the party wise details of Fabrication and Embroidery charges for top ten parties with their PAN and address with aggregate amount paid during the year. But there is difference between amount paid to the parties i.e. for Fabrication Expenses and for Embroidery Expenses as compared to TDS certificate submitted by the assessee. Further, the assessee also claimed the various expenses on account of foreign tour expenses of R....
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....ection 263 of the Act. Therefore, the order is not sustainable in law and liable to be quashed. 2. The assessment framed by the AO was after due consideration of the facts and the law. There is nothing pointed out by the Pr. CIT in the order of AO as erroneous or resulting in any prejudice to the interest of the Revenue and hence the setting aside of the order of AO by the Pr. CIT u/s 263 of the Income Tax Act, 1961 is in excess of jurisdiction and bad in law. 3. Without prejudice, setting aside the order of the AO on the ground of not referring the case to TPO and directing for examination of other reasons for scrutiny cannot be reason for calling the AO's order as erroneous or prejudicial to the interest of the Revenue, ....
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....es of the case and the submissions, it comes up that as with regard to failure of the AO to send the case to the TPO. The assessee's claim was that there was Specified Domestic Transactions and the payments were made covered u/s 40(A)(2)(b) of the Act and for which both the parties are paying similar rate of taxation and no Revenue has been affected. The case of assessee is that this angle was examined by the AO while completing the assessment. It was also submitted before Ld. PCIT that for the AY 2015-16 on the same facts as this year no adverse view was found by TPO. 11. We are of the considered view that Instruction No.3/2016 dated 10.03.2016 of CBDT providing for guidelines/implementation of transfer pricing provisions in para 3.2 sp....