AI Drafter 
TaxTMI 
TaxTMI 
2024 (10) TMI 246
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....hallenging validity of the revisionary proceedings u/s 263 and had also argued on merits of the case alluding that the report of the TPO u/s 92CA(4) was in order and did not require any interference. During the course of present proceedings, the appellant vide its petition dated 24.11.2023 pleaded to file additional grounds challenging the jurisdictional authority of PCIT, Madurai-1. 3.0 Thus the Ld. Counsel for the assessee drew our attention to the additional grounds raised by the assessee vide dated 24.11.2023 whereby it has challenged the jurisdictional authority with the PCIT, Madurai-1 to pass the impugned revisionary order u/s 263 of the Act reproduced hereunder: "...The Appellant prefers the following Additional Grounds of Appeal, on the facts and in circumstances of the case and in law, without prejudice to one another or the grounds of appeal furnished in the Memorandum of Appeal inform 36: 1. The Impugned Order passed by the Ld. PCIT - 1, Madurai, under section 263 of the Act, is without jurisdiction and lacks the authority of law, in so far as it relates to the amendment of the TP Order passed under section 92CA (3) by the Ld. DCIT, TP, Circle 2(2) ....
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....ice dated 17.02.2023 to the assessee. 5.0 The Ld. Counsel for the assessee drew our attention to contemporaneous provisions of the statute governing section 263, Finance Act 2022, CBTD notification no.60/ 2014/F No.187/29/2014(ITA1 dated 03.11.2014 as well as a catena judicial pronouncements, in support of its contentions. 6.0 The Ld. DR vehemently opposed the admissibility of the additional grounds. Challenging the same Ld. DR has also placed on records its part written submissions. It is the case of the DR that Hon'ble Apex Court decision in the case of NTPC Limited relied upon by the assessee does not renders it an unfettered right to raise any ground in appeal at any point of time. It placed reliance upon the decision of Hon'ble Apex Court in the case of Jute Corporation of India 187 ITR 688 thus it was argued that the appellant has not been able to conclusively satisfy its bona-fide of the ground raised and why it was not raised earlier. The Ld. DR argued that the assessee fully participated in the assessment proceedings and hence cannot now challenge the revisionary proceedings. It was argued that the reliance of the appellant in the case of Essar Steels Limited reporte....
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....sactions with Associated Enterprises were duly reported in the Accountant's Report in Form 3CEB filed in accordance with the provisions of Indian Transfer Pricing Regulations contained in sections 92, 92A to 92F of the Income Tax Act, 1961. The return of income was selected for assessment under section 143(3) of the Act and a corresponding reference was made to the Transfer Pricing Officer ('TPO') under Section 92CA of the Act. Accordingly several notices under section 92CA(2) and 92D(3) read with section 129 were issued to the Appellant with a questionnaire enclosed alongside seeking details with respect to the international transactions of the Appellant. The Appellant made the relevant submissions in response to each of the notices. After examining the documents and submissions furnished by the Appellant, the TPO passed an order dated January 27, 2021 under section 92CA(3) of the Act and subsequently Assessing Officer (AO) passed an order dated May o4, 2021 under section 143(3) of the Act making only an addition towards disallowance of inventory write off, thereby determining an assessed income of Rs. 2,91,08,991. It was emphasized that no disturbance was made by the TPO and ....
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....andwiched between two AES - Phillips Foods Inc USA (PFUS) and you. But in, the TP documentation provided, it was claimed that you were the least complex entity and therefore chosen as the tested party while determining the ALP of the international transaction. It was also claimed that PFHK performed the functions of manufacturing, marketing and distribution and borne product and market related risks besides claiming to be the Licensee to use Trademark, Patents and Know- how owned by PFUS. On the basis of FAR analysis brought out in the documentation, PFIN were considered as least complex entity vis-à-vis PFHK and accordingly you were chosen as the tested party. But despite repeated opportunities, you have not substantiated full and complete details with regard to FAR of PFHK vis-à-vis you in respect of the export sales carried out by your Company to justify the above position..................................................................................... 5.4 It is clear from the above that PFHK acts as intermediary between your company and PFUS. The Chapter-2 of the OECD guidelines gives the example of intermediary activities where a tax payer p....
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....e Act 2022 w.e.f 01.04.2022, a PCIT was empowered to invoke his revisionary authority in respect of orders passed by an assessing officer. However, with the advent of provisions of 92CA mandating an assessing officer to pass assessment orders after considering the report of the TPO, a question arose as to who would be having revisionary powers u/s 263 over the orders passed by the TPO. The explanatory notes of Finance Act 2022 clarified this situation by mandating that the principle chief commissioner or chief commissioner or commissioner having jurisdiction over transfer pricing matters would be empowered to invoke revisionary action u/s 263 in respect of TPOs working under its administrative command and control. Thus it was argued that a conjoined reading of the explanatory notes of Finance Act 2022 r.w. notification of CBDT dated 03.11.2014 as well as the amended statute operative from 01.04.2022 clearly provides that only and only the commissioner in this case commissioner of income tax (Transfer Pricing) Chennai would have lawful authority u/s 263 to revise the orders passed by DCIT / ACIT (Transfer Pricing) 2(2), Chennai. It was therefore argued that consequently the revision....
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....t, for the purposes of this sub-section,- (a) an order passed on or before or after the 1st day of June, 1988 by the Assessing Officer 1[or the Transfer Pricing Officer, as the case may be,] shall include- (i) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income-tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (ii) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer 3[or the Transfer Pricing Officer, as the case may be,] conferred on, or assigned to, him under the orders or directions issued by the Board or by the Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General or Principal Commissioner or Commissioner authorised by the Board in this behalf under section 120; ^3[(iii) an order under section 92CA by the Transfer Pricing Officer;] (b) "record" shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Principal Chief Commissioner....
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....his section is stayed by an order or injunction of any court shall be excluded...". 13.0 On perusal of above, it clearly transpires that the principle chief commissioner or chief commissioner or commissioner having jurisdiction over transfer pricing matters has been specifically empowered, w.e.f 01.04.2022, to invoke revisionary action u/s 263 in respect of TPOs working under their administrative command and control. In this regard, we are fully in agreement with legislative intent embedded in the impugned amendment that there did existed a confusion as to who will have real revisionary powers u/s 263 qua orders passed by the TPO. A resolution to this controversy was necessary particularly in view of the notification dated 03.11.2014 which elaborately defined the chain of command right from Principal Chief Commissioner of Income Tax(International Taxation) at the top and the Deputy / Assistant Commissioner of income tax(Transfer Pricing) at the base of pyramid. Consequently, the law makers proceeded to include a "Transfer Pricing Officer" alongside an assessing officer for authorities in respect of whom revisionary orders can be invoked by the respective principle chief commissi....