|COURT:||Gujarat High Court|
|CORAM:||B. N. Karia J, M. R. Shah J|
|CATCH WORDS:||Reference, Transfer Pricing|
|COUNSEL:||R. K. Patel|
|DATE:||November 16, 2016 (Date of pronouncement)|
|DATE:||December 8, 2016 (Date of publication)|
|FILE:||Click here to download the file in pdf format|
|Transfer Pricing: As per CBDT's Instruction No.3/2016 dated 10.03.2016, the AO is required to give an opportunity to the assessee to show cause why the reference should not be made to the TPO and thereafter pass a speaking order while making a reference to the TPO. The failure to do so renders the reference void|
(i) No speaking order has been passed by the Assessing Officer while making a reference to the TPO, which is a requirement as per the Instruction No.3/2016 dated 10th March, 2016, issued by the CBDT. Before making a reference to the TPO, the assessee is required to be given an opportunity to show cause why the reference may not be made to the TPO and thereafter a speaking order is required to be passed by the Assessing Officer while making a reference to the TPO.
(ii) Under the circumstances, on the aforesaid ground alone, the impugned reference made by the Assessing Officer to the TPO deserves to be quashed and set aside and the matter is required to be remanded to the Assessing Officer to pass a speaking order while making a reference to the TPO.
Indorama Synthetics (India) Ltd. v. Additional Commissioner of IncomeTax, [(2016) 71 Taxmann.com 349 (Delhi)] referred