The Tax Publishers2021 TaxPub(DT) 0208 (Mum-Trib)

INCOME TAX ACT, 1961

Section 92CA

Where assumption of jurisdiction to make reference to the TPO was clearly vitiated in law, in as much as neither any proceedings were pending before AO nor any approval of the CIT or PCIT was taken in present case and once it was concluded that assumption of jurisdiction for making a reference to TPO itself was vitiated in law, no other valid legal consequences can flow from the same, therefore, conclusions arrived at by CIT(A) cannot be faulted.

Transfer pricing - Computation of arm's length price - Legality of reference to TPO -

Assessee was a manufacturer and exporter of diamond studded gold jewellery and had entered into certain international transaction. The case of assessee was not selected for any scrutiny assessment proceedings. AO, however, made a reference to the TPO under section 92CA(1) nevertheless but admittedly while making this reference he did not obtain the prior approval of the CIT or Pr. CIT. On receipt of TPO's order, AO reopened the assessment under section 147 and proceeded to make ALP adjustment on the basis of the TPO's order. Held: The very assumption of jurisdiction to make reference to the TPO was clearly vitiated in law, in as much as neither any proceedings were pending before AO nor any approval of the CIT or Pr. CIT was taken in the present case. Once it was concluded that assumption of jurisdiction for making a reference to TPO itself was vitiated in law, no other valid legal consequences can flow from the same. The conclusions arrived at by CIT(A) cannot be faulted.

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2007-08



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