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| The Tax Publishers2020 TaxPub(DT) 4261 (Ahd-Trib) INCOME TAX ACT, 1961
Section 263
Where no enquiry had been made by AO to refer the matter to the TPO for determination of correct Arm's Length Price of specified domestic transaction and if any enquiry has been claimed to have been done the same was acted on the basis of the wrong 3CB-3CD report which vitiates the entire proceeding. Thus, there was no infirmity could be found in the observation made by PCIT in setting aside the assessment order considering it erroneous and prejudicial to the interest of Revenue.
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Revision under section 263 - Erroneous and prejudicial order - Elaborate enquiry not conducted -
Assessee made payment to persons specified under section 40A(2)(b) for purchase of Grey Cloth, which falls under the definition of specified domestic transactions. On this special fact it was mandatory for AO to refer the matter to the TPO for determination of correct Arm's Length Price of specified domestic transaction. Such reference could not be made by AO since the actual Audit Report of the assessee was not filed. However, the AO failed to exercise such power of referring the matter to the TPO by conducting necessary enquiry, the order of assessment passed was held as erroneous so far as it was prejudicial to the interest of Revenue by Pr. CIT.Held: No enquiry had been done by AO and if any enquiry has been claimed to have been done the same was acted on the basis of the wrong 3CB-3CD report which vitiates the entire proceeding. Therefore, there was no infirmity in the observation made by PCIT in setting aside the assessment order, considering it erroneous and prejudicial to the interests of revenue and in passing direction upon the concerned AO to complete proper enquiries and verification de novo so as to warrant interference.
REFERRED :
FAVOUR : Against the assessee.
A.Y. : 2014-15
IN THE ITAT, AHMEDABAD BENCH
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