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2021 (2) TMI 1111 - HC - Income TaxValidity of draft order u/s 144C passed by the Deputy Commissioner of Income Tax - whether the assessee is right in contending that the assessee's case was selected for a limited scrutiny and the reference to the TPO was beyond the scope of the scrutiny? - HELD THAT:- As rightly contended by Revenue the first respondent is not competent to check whether the value of the international transactions as furnished in Form 3CEB by a Chartered Accountant and return of income is correctly shown. Assessing Officer, being not competent to examine the said issue, necessarily, the case has to be referred to the TPO as per Section 92CA - the contention of the appellant/assessee that the case was selected for mere reconciliation is an incorrect interpretation. This is clear from the reason for which the case was selected for scrutiny and the issue arising there from. Thus, we find that there is no violation of the instructions issued by the CBDT. In our considered view, the learned Single Bench rightly took note of these aspects as well as paragraph 3.4 of the CBDT Instruction No.15/2015, which states that the issue on which a reference was thought to be necessary, has to be explicitly mentioned in the Assessing Officer's letter seeking reference to the TPO and such letter of the Assessing Officer dated 17.07.2018, was found to have complied with the said condition. We also agree and endorse the finding rendered by the learned Single Bench that the reason for selection of scrutiny by CASS was only for numerical reconciliation is a over simplification of the reason stated for selection. In fact, the learned Single Bench has observed that the officer might have been more detailed in the choice of words employed so as to specifically refer to the issue of total employee cost, however, non-reference to this, is not fatal, as the reason for selection by CASS has been produced and placed on record by the officer while seeking approval of a Principal Commissioner of Income Tax (PCIT) for reference to the TPO. As Court noted that after the interim order, which was initially granted, was not extended, the Assessing Officer issued show cause notice dated 11.10.2019, the appellant/assessee submitted their reply dated 23.10.2019, enclosing various details on the computation of the ALP as sought for by the Assessing Officer. However, the affidavit filed in support of the writ petitions was silent with regard to these facts. Thus, the learned Single Bench rightly concluded that the appellant has not only cooperated and participated in the conduct of assessment, but has also filed objections before the DRP that are pending disposal. Hence, we are of the considered view that the learned Single Bench rightly dismissed the writ petitions and the order does not call for any interference.
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