TMI Blog2021 (2) TMI 1111X X X X Extracts X X X X X X X X Extracts X X X X ..... s, 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 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of international transactions entered into by the appellant/assessee during the financial year 2015-16. The appellant was directed to produce evidence or material, which they may rely upon in support of computation made by them of ALP of the international transactions. 5.In paragraph 3 of the notice dated 19.12.2018, the list of information and documents, which the assessee was required to furnish/produce were mentioned. The assessee submitted their objection dated 03.01.2019, to the Assessing Officer through their Chartered Accountant, objecting for the reference made under Section 92CA(2) and Section 92D(3) to the TPO (second respondent) to determine the ALP. In the said objection, the appellant/assessee stated that the notice issued under Section 143(2) of the Act dated 27.07.2017, is for a limited scrutiny to identify as to whether the value of international transactions is correctly shown in Form 3CEB and return of income, whereas the notice issued by the TPO states that a reference has been received to determine the ALP under Section 92CA(3) in respect of international transactions entered into by the assessee during the financial year 2015-16. It was submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax that when the writ petition was posted for hearing, for extension of stay, the learned Standing Counsel for the Department submitted that an assessment order was already passed for the assessment year 2016-17 and therefore, the writ petition (W.P.No.5760 of 2019) is infructuous. 9.Further, the assessee stated that their counsel objected to the passing of the assessment order, when the writ petition was pending and that the Court adjourned the matter by a week to ascertain as to whether assessment order has been passed. A draft order under Section 144C of the Act was passed by the Deputy Commissioner of Income Tax on 27.11.2019. This order was challenged by the appellant in W.P.No.35246 of 2019. 10.The writ petition filed in W.P.No.5760 of 2019 challenging the notice dated 19.12.2019 was clubbed along with W.P.No.35246 of 2019 and both the writ petitions have been dismissed by a common order. This is how the assessee is before us by way of these appeals. 11.Before us, the assessee seeks to prosecute W.A.No.1134 of 2020, which has been filed challenging the dismissal of W.P.No.35246 of 2019. As stated above, the said writ petition was filed challenging the draft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls. Therefore, it is submitted that the learned Single Bench ought to have granted the relief sought for in the writ petitions. 15.Ms.Hema Muralikrishnan, would submit that the understanding of the appellant/assessee is wholly incorrect and this has been clearly brought out in the counter affidavit filed in the writ petitions and it is not a case, where the Assessing Officer was denuded of jurisdiction to make a reference to the TPO. The learned Standing Counsel referred to the reasons given in the CASS selection and the assessee is not right in contending that the case was selected for limited scrutiny only. Further, the learned counsel referred to relevant paragraphs in the impugned order and submitted that the learned Writ Court rightly rejected the relief sought for. 16.In reply, Mr.N.V.Balaji while briefly reiterating the submissions made earlier, had referred to the directions issued by the CBDT in Instruction No.7/2014 dated 26.09.2014 and Instruction No.20/2015 dated 29.12.2015 and that information cannot be called for in a routine manner and a separate instruction has also been issued fixing monetary limits for selecting cases for scrutiny. 17.What is required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. The said letter is as follows:- PAN: AADCT4603N/2018-19 Dated: 17/07/2018 To The Principal Commissioner of Income-tax, Chennai-3, Chennai. THROUGH THE ADDL. CIT, CORPORATE RANGE-3, CHENNAI Respected Sir, \ Sub: Computation of Arms Length Price Request for approval reference to Transfer Pricing Officer (TPO) in the following case AY 2016-17 Reg. ***** For the A.Y. 2016-17, the following scrutiny case has been selected for Limited scrutiny through CASS and notice u/s 143(2) was duly served on the assessee. On examination of Form 3CEBN in this case, it is observed that the assessee has entered into international transactions with its associated enterprises as mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 22.Further, the 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. 23.For the above reasons, W.A.No.1134 of 2020 is dismissed. Consequently, there is no merit in W.A.No.1133 of 2020. 24.In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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