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2021 (9) TMI 1119 - AT - Income TaxRevision u/s 263 by CIT - Non reference of matter to the TPO in respect of international transactions and specified domestic transactions - case selected for scrutiny to consider the mismatch in the amount paid to related persons u/s. 40A(2)(b) reported in audit report and the international transactions entered by the assessee with AE referred to in section 92A(2) reported in Form 3CEB, the AO should have referred the matter to the TPO so as to ascertain the ALP of specific domestic transactions with related parties - as per PCIT AO failed to follow the CBDT Instruction No. 3/16 dated 10.3.2016, which expressly provides for determination of ALP of international transactions as well as specific domestic transactions - HELD THAT:- The case was not selected for limited scrutiny of specified domestic transactions or international transactions so as to draw inference that the case was selected on Transfer Pricing risk parameter. On the other hand, the case was selected for limited scrutiny one of the reasons being mismatch in amount paid to related persons u/s. 40A(2)(b) reported in audit report and ITR. From a reading of these reasons, we are of the view that no prudent business person properly instructed in law would have inferred the TP risk parameter as a reason for scrutiny so as to mandatorily make reference u/s. 92C of the Act in terms of CBDT Instruction No. 3/16 and failure to make such reference made the assessment order erroneous. In our opinion, the TP risk parameter was not one of the reasons for limited scrutiny of the case and as such the PCIT was not justified in invoking jurisdiction u/s. 263 of the Act so as to direct the AO to refer the matter to the TPO in respect of international transactions and specified domestic transactions listed in Form 3CEB and Form 3CD. As relying on Eveready Industries Ltd [2019 (12) TMI 1033 - ITAT KOLKATA] we are inclined to quash the impugned revisionary order passed by the PCIT u/s. 263 of the Act. - Decided in favour of assessee.
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