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2016 (12) TMI 685 - CALCUTTA HIGH COURTReference to TPO without jurisdiction - TPA - Held that:- We are unable to hold that the reference to the TPO is without jurisdiction. Sec. 92CA(1) envisages that where the assessing officer considers it ‘necessary or expedient’ to do so, he may with the approval of the Commissioner refer the computation of the arm’s length price in relation to the concerned international transaction to the TPO. In my opinion, the said section does not contemplate that the assessing officer has to first come to a definite finding that there is an international transaction within the meaning of Sec. 92B before he can exercise his power to refer the matter to the TPO. So long as he is of a prima facie view that an international transaction is involved and it is necessary or expedient to refer the computation of the arm’s length price in relation thereto to the TPO, he will be well within his powers to do so. It is needless to say that the proceeding before the TPO will be only upon notice to the assessee who will have full opportunity of urging before the TPO that no international transaction is involved. In the present case, PWH shall have full opportunity of impressing upon the TPO that it and Services BV are not associated enterprises. Whether or not Services BV participates directly or indirectly in the management or control or capital of PWH and whether or not at least one of the conditions mentioned in the sub-paragraphs (a) to (m) of Sec. 92A(2) of the Act is satisfied, are factual issues which the TPO is equipped and competent to decide. It is not proper or convenient nor desirable for a Writ Court to go into such disputed questions of fact. Further, the decision of the TPO is in the nature of an opinion. The TPO will send his opinion to the Assessing Officer who shall conduct the re- assessment proceeding taking into consideration such opinion of the TPO and upon notice to the assessee. The opinion of the TPO is not binding on the Assessing Officer. The assessee will have a second opportunity of arguing before the Assessing Officer or before the Dispute Resolution Panel as envisaged under Sec. 144C of the Act that the parties involved are not associated enterprises and hence there is no international transaction and consequently reference to the TPO was without jurisdiction. If so satisfied, the Assessing Officer would be at liberty to ignore the opinion/report of the TPO. Thus the reference to the TPO under Sec. 92CA(1) of the Act should not be interfered with by the Writ Court at this stage. The nature of transaction between PWH and Services BV is not totally clear. We are not in a position to hold that the factual issues contemplated in Sec. 92A(1) and (2) of the Act do not exist and as such the reference to the TPO was without jurisdiction. No case of mala fide or ex facie lack of jurisdiction has been made out by the petitioners and it is of the considered opinion that we should not stifle the reference to the TPO by nipping the same in the bud. If the stand of the writ petitioner company is bona fide and indeed if no international transaction is involved, see no reason why the company should shy away from the proceeding before the TPO and not urge and establish the same in the proceeding before the TPO. Thus matter set aside to hold proceedings afresh
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