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2021 (9) TMI 691 - AT - Income TaxRevision u/s 263 - non reference to TPO made - cases as selected for scrutiny on non transfer pricing risk parameters - Limited or complete scrutiny - case of the assessee was selected for complete scrutiny through CASS and the relevant CASS reason was large outward remittance to a non-resident not being a company or a foreign company (form 15CA) - whether the case has been selected on the basis of "TP risk parameters" or on the basis of "non transfer pricing risk parameters"? - HELD THAT:- On perusal of notice issued u/s. 143(2) dated 13.03.2016, there is a clear mention on the face of the notice that case of the assessee was selected for limited scrutiny under CASS which also find clear assertion in the assessment order where the AO has clearly stated that the case of the assessee was selected for limited scrutiny. It is therefore a case of limited scrutiny and not that of complete scrutiny where the case has been selected under CASS. Not all international transactions as reported in Form 15CA relates to transactions with associated enterprises and only a part of such international transactions relates to associated enterprises - where there are separate and distinct parameters and coding employed through CASS to selected cases on TP risk parameters and non-TP risk parameters and where not all international transactions as reported in Form 15CA are with associated enterprises, it cannot be said that the case of the assessee was selected through CASS on the basis of TP risk parameters and the AO was mandatorily required to refer the matter to the TPO for determination of ALP. We find that under similar circumstances, as in case of Amira Pure Foods Private limited [2017 (12) TMI 189 - ITAT DELHI] where the case of the assessee was selected on account of mismatch between income declared in ITR and amount of remittance received (Form 15CA), negated the arguments advanced on behalf of the Revenue that it was mandatory for the AO to refer to TPO since the case of the assessee was selected for scrutiny on account of international transactions. The Instruction No. 3 of 2016 in para 3.3 states that where cases are selected for scrutiny on non transfer pricing risk parameters but also having international transactions or specified domestic transactions, shall be referred to TPO in specified circumstances. The said clause 3.3 of the Instruction specifies three situations and we find that none of the situation is applicable in the case of the assessee. The first situation requires that where there are international transactions or specified transactions or both and the taxpayer has not filed any report required to be submitted under section 92E. This is not a situation in the case of the assessee as the report was duly submitted. The second situation where in previous assessments if any addition on account of transfer pricing adjustment of more than ten crores and addition being upheld in appellate proceedings is also not applicable in the case of the assessee. Thirdly, this is not a case where search or seizure or survey operations had been carried out. In such a situation, it cannot be said that the assessment order is erroneous as reference to TPO was not made. The necessary enquiries and examination as reasonably expected have been carried out by the Assessing officer and he has taken a prudent, judicious and reasonable view after considering the entire material available on record as well as following the CBDT Instruction no. 3 of 2016 and the order so passed u/s. 143(3) cannot be held as erroneous in so far as prejudicial to the interest of Revenue. The impugned order passed by the ld. PCIT u/s. 263 is accordingly set aside - Decided in favour of assessee.
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