TaxTMI 
TaxTMI 
TaxTMI 
2022 (4) TMI 1589
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....et Commission (FMC) in the affairs of the assessee company from inception till 30th September, 2013. The report was called for on various aspects including review of certain transactions undertaken with related and non-related parties. In accordance with the directions, the special auditor M/s. Price water House Coopers Pvt. Ltd. (PWC) conducted Special Audit and submitted its report on 21.04.2014. In the Special Audit Report, several discrepancies were brought to light by the Special Auditor based on review of various documents, procedures, agreements, etc., pertaining to the transactions. 3. Ld. Pr.CIT observed that the Assessing Officer alongwith recorded satisfaction of the Range head proposed that the assessment order dated 21.01.2019 passed by the Assessing Officer u/s 143(3) r.w.s 144C(3) of the Act for the current assessment year i.e. A.Y. 2014-15 be revised u/s.263 of the Act. It was submitted before him that during the assessment proceedings, while assessing the various related party transactions of the assessee, the assessee has submitted that such related party transaction have been examined by the transfer Pricing Officer (TPO) and therefore, no details pertaining to ....
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....f the Ld. PCIT4 to present their case. After waiting for almost more than two hours, one of the staff of the Ld. PCIT - 4, Mr Ranjan informed that he was in a meeting. Accordingly, a copy of the submission filed on 06/03/2019 was once again handed over to the staff to be put in the file when his staff stated that after talking to Ld. PCIT - 4, he will give a new date. However, to the Appellants utter surprise, the Ld. PCIT - 4 did not consider the same while passing the order under section 263 of the Income Tax Act, 1961. 4. The Ld. PCIT - 4 erred in stating that the order passed by the Ld. AO was erroneous and prejudicial to the interest of the revenue on the ground that the Ld. AO failed to refer the case to the learned Transfer Pricing Officer (Ld. TPO). Looking into the facts & circumstances of your Appellant it is submitted that Ld AO vide his letter dated 05/12 216 had refer the case to Ld TPO. Further, the Ld. PCIT - 4 himself in para 10 of the order has stated that the "...... The said Special audit report was available with the AO when the case was referred to the TPO, but the AQ erred in not making available the same to the TPQ...... ". Therefore, assessment order pass....
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....s to revised Assessment Order under Se. 263 of the Act. The Sr. Advocate place his reliance on the decision of the Hon'ble Tribunal, Pune Bench in ITA.No. No.1287/Pun/2017 of Alfa Laval Lund AB Vs CIT(IT/TP), Pune. The Counsel argued that the twin mandatory conditions provided under Sec. 263 of the Act i. e. (i) the CIT calling for and examining the record, And (ii) in HIS consideration an assessment Order is erroneous as well as prejudicial to interest of Revenue etc., which are sine qua non for the exercise of power under Sec. 263 of the Act and both the conditions must be fulfilled together. It is argued that in case of the Appellant both conditions are not fulfilled together as it is kicking point for invoking jurisdiction u/ s 263. Thus, when the CIT invoked his jurisdictions mechanically on basis of the proposal and recommendation of A.O., it lacks the jurisdictional requirement and therefore the exercise of jurisdiction and consequential proceedings by Ld. CIT under Section 263 is bad in law and without lawful assumption of jurisdiction. Submissions on Issue No. 2: The PCIT wrongly assumed jurisdiction to revise the order Passed by the TPO as Section 263 does not c....
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....ding transaction between MCX and significant related parties * Review of transactions of expenses incurred (individually) above INR 25 Lakhs * Review of trading transactions conducted by related parties identified above on the MCX platform * Review of Risk management system of the MCX technology platform. * Ascertain whether the meetings of the Board of MCX were held in compliance with the Companies Act, 1956. This Report has been structured in the aforesaid sequence for presentation of findings of this Review." 6. It was argued by the Appellant that as per clarification given by PwC, Auditors in Special Audit/Review Report that for the purpose of the SAR, the PWC has made it's own Working Definition" of the "Related Parties" which do not constitute 'Related Parties" as defined under provisions of any prevailing Laws or guidance from any Professional bodies of India. (Kindly ref. para 3.5.1. at Page No. 126 of paper book 1.) 7. It was further argued by the Appellant that the AO has already made 100% disallowance in respect all transactions of the Parties as mentioned in PWC's Special Audit/Review Report, other than related Parties as defined in Sec.....
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....Refer to pg.15 of pb para 29) Party Name Amount in Special Audit Report of PWC Amount disallowed in Assessment order Moneywise Financial Services Pvt. Ltd 1,25,00,000/ (at para 8.2.62 onwards of pg 183 of paper book 1) 1,25,00,000/- (At para 37 To 41 of assessment order at page 25- 26 of the Paper book 1) Informatic Value Research Private Ltd. Providing market intelligence and consulting services (In para 8.2.72 at page 185 of the Paper book 1) Period: 01/04/2013 to 30/09/2013 (6 months 32,00,000 * 6 = 1,92,00,000/- + Further additions: 90,00,000/- Total: 2,82,00,000/- 2,82,00,000/- (in Para 44-46 at Page No. 26-27 Dinesh Rao & Associates 50,00,000/- (in para 8.2.107 at page No. 190-191 of the paper book 1) 50,00,000/- In para 47-49 at Page 27 to 28 of paper book 1) Sky Star Advertising 3,90,00,000/-(In para 8.2.96 to 8.2.98 at In para 42-43 at Page 26 of the Paper 1)page 188-190 of the paper book 1) 5,00,00,000/- 7. It was also submitted that there are no other payments those have been left out by the A.O. and therefore, no prejudice caused to the interest of the Revenue. Hence one of the twin conditions under Section 263 of the Act, that the Order should be erro....
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....f the Act. The Pune bench in the similar situation held as under: - "4. Sub-section (1) of section 263 of the Act is an enabling provision which confers jurisdiction on the CIT to revise an assessment order which he considers erroneous and prejudicial to the interests of revenue. The process of revision u/s 263 of the Act initiates only when the CIT calls for and examines the record of any proceeding under this Act and considers that any order passed by the AO is erroneous and prejudicial to the interests of the revenue. The twin conditions of - (i) the CIT calling for and examining the record; succeeded by (ii) his considering the assessment order as erroneous etc. - are sine qua non for the exercise of power under this section. The use of the word `and' between the expression `call for and examine the record ....‟ and the expression `if he considers that any order ... is erroneous ...‟ abundantly demonstrates that both these conditions must be cumulatively fulfilled by the CIT and in the same order, that is, the first followed by the second. In other words, the kicking in point for invoking jurisdiction u/s 263 is calling for and examining the record of any proceedi....