Dismissing the appeal of the Revenue the Court held that  the Tribunal was correct in holding that when the reference under section 92CA was made to the Transfer Pricing Officer by the Assessing Officer for computation of the arm’s length price in relation to the international transaction, no assessment proceedings were pending and hence it was invalid reference. Consequently, the subsequent order passed by the Transfer Pricing Officer was a nullity and void ab initio. Therefore, the Assessing Officer could not have relied upon an order of the Transfer Pricing Officer which was a nullity to form a belief that certain income chargeable to tax had escaped the assessment for the assessment year 2007-08. The belief of the Assessing Officer that there has been escapement of income must be based on some material on record and the only material relied upon was the order of the Transfer Pricing Officer. No notice under section 143(2) was issued to the assessee before making the reference to the Transfer Pricing Officer. When no assessment proceedings were pending in relation to the assessment year 2007-08 the Assessing Officer was precluded from making a reference to the Transfer Pricing Officer under section 92CA(1) for computing the arm’s length price. No question of law arose. Referred  The Central Board of Direct Taxes in Instruction No. 3 dated May 20, 2003 [2003] 261 ITR (St.) 51)  (AY.2007-08)