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TMI Blog2018 (3) TMI 1310X X X X Extracts X X X X X X X X Extracts X X X X ..... administration will mean nothing. Satisfaction of one authority cannot be substituted by the satisfaction of the other authority. It is trite that when a statue requires, a thing to be done in a certain manner, it shall be done in that manner alone and the court would not expect its being done in some other manner.” Additional Ground of the assessee is allowed. At this juncture, the assessment has become time barred as the reference made to TPO itself is not sustainable and the Assessing Officer should have passed Assessment Order at the prescribed time provided under the statute. We are not deciding on the merit of the case as the additional ground is decided in favour of the assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Aztec Software and Technology Services Ltd. 107 ITD 141 (Bang) (SB). Consequently, the impugned assessment is time barred and, therefore, bad in law." 5. The Ld. AR submits that as regards the legal ground, the reference made to the TPO is bad in law. There are two limbs of this ground. Firstly, the Assessing Officer has not taken any approval from the Commissioner in this regard and secondly, as the quantum of the international transaction is below ₹ 5 crore the Assessing Officer ought to have determined the ALP himself and not referred to the TPO. The order of the TPO makes it clear that quantum of international transaction is ₹ 2,15,04,878/- which means the same is below the monetary limit of ₹ 5 crore. The Ld. AR submitted that limit of ₹ 5 crore is not mentioned anywhere in the provisions of Transfer Pricing, however, CBDT vide its Instruction dated 20.03.2003 being Instruction No. 03 of 2003 categorically provided that only those cases where the quantum of international transaction is above ₹ 5 crore would be referred to the TPO. The Ld. AR submitted that the CBDT made it clear that "it would be appropriate if a small number of cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ITAT in the case of present assessee, for the same assessment year, has directed the Assessing Officer to accept the revised return instead of original return. Therefore, the Assessing Officer was not correct in ignoring the revised return. The Ld. AR submitted that provisions related to furnishing of FBT return are prescribed under section 115 WD and provisions relating to revised return of FBT are prescribed as under section 115 WD (4). The Ld. AR submitted that the perusal of section 115 WD (4) would make it clear that the language of this sub-section as well as language of section 135 (5) is verbatim. Therefore, interpretation as adopted by the ITAT vis-à-vis FBT return may be adopted here for Income Tax Return. The Ld. AR submitted that in view of the above the revised return of the assessee may be accepted and the matter may be restored to the AO for fresh adjudication. The Ld. AR submitted that it is settled position of law that revised return would replace the original return and has to be considered for all aspects which means, the original return become non-est a reference was made to the following cases:- A Bico engineering Ltd Vs, CIT 148 ITR 478 Punjab & Ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that in revised return assessee has reflected an amount of ₹ 2,48,26,091 under the sales receipts, out of this amount an amount of ₹ 2,15,04,878/- was related to the AE of assessee and balance amount of ₹ 33,21,213/- was related to independent party and that is why the Assessing Officer has only referred the transaction of ₹ 2,15,04,878/- to the TPO. The Ld. AR pointed out that belated return of Abridge was filed on 19.03.2008, in which the income pertaining to that firm has been declared. The Ld. AR further submitted that till date no action has been taken by the revenue to assess the income of Abridge and whatever declared over there has been accepted by the revenue as correct. Therefore the entire assessment may be annulled and a direction may be given to AO to reassess the income of the assessee on the basis of revised return. 10. As regards to merit, the Ld. AR submitted that the TPO has wrongly applied the TNMM method instead of CUP method. During the course of TP proceeding as well as in the proceeding before the DRP, the assessee has averted that it had entered into similar transactions with M/s Visiongain Ltd, UK. The Ld. AR further submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arable with the assessee company. The Ld. AR submitted that these companies cannot at all be compared with the assessee company. The sample set is too small (only 2 companies) to be generically applied to a company like CALANCE INDIA. The relevant sample size had to be hundreds of companies in order to be statistically meaningful. a) Bodh Tree Consulting was founded in 1999 and has been in business for 7 years and hence probably matured. Comparison of Calance India (18 month old startup company) with Bodhtree is not meaningful Besides Bodh Tree Consulting was in the business of Business Consulting, Business Transformation and Data Management which are not the same as Calance Software business lines. This companies is absolutely meaningless. b) SIP Technologies was founded in 1996 and again a mature company and should not be compared with Calance India. Also, the line of business pursued by SIP Technologies is very different from Calance India. They are into testing, portability and maintenance and support. None of these business lines were pursued by Calance India in 2005-2006. Calance India was doing Custom Software Development Calance India responded to the show cause notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. AR has taken a ground which is on legal point that as per the Instruction No. 3/2003 issued by the CBDT, the Assessing Officer should have decided the issue of international transaction himself instead of referring it to Transfer Pricing Officer as the quantum of International Transaction is below the monetary limit of ₹ 5 crore. Prima facie, it appears that the contention of the Ld. AR is supported by the Instruction No. 3/2003. Therefore, we have to verify whether that Instruction has a binding force or it is just an administrative Instruction within the Departments day to day activities. The Circular has been considered by the Andhra Pradesh High Court in case of CIT Vs. Nayana P Dedhia 270 ITR 572 wherein it is held that the authorities responsible for administration of the Act shall observe and follow any such orders, instructions and directions of the board. This is actually reiterated from the decision of the Hon'ble Apex Court in case of UCO Bank Vs. CIT 237 ITR 889. But at the same time the Hon'ble Supreme Court also held that the Circulars can be adverse to the IT Department but still are binding on the authorities of the Income Tax Departments but cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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