For the AY 2018-19 the assessee had entered into several international transactions amounting to Rs. 2,79,457.28 crores. The Commissioner (International Taxation) noticed that the A.O. had not referred the matter of determination of the arm\u2019s length price of international transactions to the Transfer Pricing Officer as required by Central Board of Direct Taxes Instruction No. 3 of 2016, dated March 10, 2016 ([2016 382 ITR (St.) 36). Accordingly, he initiated revision proceedings under section\u00a0263\u00a0of the Act, set aside the assessment order and directed the A.O. to make a reference to the Transfer Pricing Officer as stipulated in Instruction No. 3 of 2016 and passed an assessment order in respect of the international transactions based on the order of Transfer Pricing Officer as per law. Being aggrieved, the assessee filed appeal before Tribunal who upheld the revision. The Tribunal held that in terms of clause (c) of Explanation 2 to section\u00a0263,the order passed without complying with the Instruction issued by the Board u\/s.\u00a0119\u00a0of the Act would render the order erroneous and prejudicial to the interests of the Revenue.\u00a0 In view of the Instruction No. 3 of 2016, it was mandatory for the A.O. to refer the matter of determination of arm\u2019s length price of the assessee\u2019s international transactions to the Transfer Pricing Officer after obtaining approval from the Principal Commissioner or Commissioner, if the return of income of the assessee had been selected under \u201cthe transfer pricing risk\u201d parameter. The A.O. having failed to follow the instructions, there was no infirmity or illegality in the revision order passed by the Commissioner (International Taxation).(AY .2018-19)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 263 : Commissioner-Revision of orders prejudicial to revenue-
\n-Requirement of reference to Transfer Pricing Officer-Return of income of assessee selected under \u201ctransfer pricing risk\u201d parameter-Failure by AO to make reference or record satisfaction for not doing so-Instruction of Board not followed-Order erroneous and prejudicial to revenue-Revision justified \u2014CBDT Instruction No. 3 Of 2016, Dated 10-3-2016 .[S. 92C, 144C, 119,263 Expl. 2(c)] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-42303","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-b0j","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/42303","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=42303"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/42303\/revisions"}],"predecessor-version":[{"id":42304,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/42303\/revisions\/42304"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=42303"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=42303"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=42303"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}