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TMI Blog2023 (12) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... justify. In this case as per the order of the learned transfer pricing officer under section 92CA (3) of the act dated 27/1/2021 says that reference u/s 92C (1) was received from the learned assessing officer on 31/12/2019 - Thereafter the learned transfer-pricing officer noted that assessee has not submitted form number 3CEB for the year under consideration. There was no reference that how transactions of export sales, import were benchmarked by the assessee by adopting which method, and how ALP of such transactions was determined. Thus, it is correctly held by CIT that the TPO has passed the order without taking any cognizance of making any inquiries with respect to transaction of export and import. Therefore, such an order is erroneous and prejudicial to the interest of revenue. It is also the fact that the CIT (TP) did not invoke the provisions of explanation 2 of section 263 of The Income Tax Act because of the reason that the order passed is without making any enquiry and therefore such an order is erroneous and prejudicial to the interest of revenue as there was no case to consider it under the deeming fiction of explanation 2 of that section. It is a case complete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts in all these four years are similar as similar TP order u/s 92CA (3) were passed by the ld TPO and Similar revisionary order are passed by the ld CIT. 03. The brief fact of the assessment year 2012-13 shows that the assessee dealt in Pharmaceutical products, manufacturing and export of various Pharmaceutical products. 04. Assessee filed its return of income on 21.06.2023 declaring total income of ₹ 1,63,90,590/-. This return of income was accepted under section 143 (1) of the Act. 05. A survey action was conducted on 17.01.2019 in case of Alpha Pharma group of companies. It was found that one Mr. Jacob Sporon Fielder, Dennis national and resident in India is engaged in the business of manufacturing and export of pharmaceutical products through various domestic and foreign incorporated entities. He has incorporated a number of entities in foreign jurisdiction such as St Lucia, Seychelles, Belize, Hong Kong etc. Assessee is also one such group company of Alpha Pharma group. 06. It was found that assessee has engaged in export sale and import from its associated enterprises. Therefore, the case was reopened by issuing notice under section 148 of the Act. In respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more than of ₹ 1 crore. A survey action u/s 133A was conducted on 17.01.2019 whereas the order u/s 92CA (3) was passed on 27.01.2021. He noted that the assessee has entered into several international transactions of import and export as well as receipt of Share capital from associated enterprises as under:- Serial number Nature of transaction Name of associated enterprises Amount of international transaction (rupees) 1 Receipt of share capital Alpha Pharma group Ltd Cecil is 4,95,66,178/ 2 export sales general Life science distributors GmbH 6,56,15,453 3 export sales Jinan pharmaceutical company Ltd 37,73,085 4 import purchases Jinan pharmaceutical company Ltd 42,08,526 011. The learned CIT noted that the case was reopened by issuing notice under section 148 of the act and reference was made to the learned transfer pricing off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pt the transaction at serial number I. Therefore, the learned transfer-pricing officer did not carry out any enquiry and hence there was a non-application of mind by the learned transfer-pricing officer. He further referred to the provisions of section 263 of the income tax act and held that the impugned order of the learned transfer-pricing officer is erroneous insofar as it is prejudicial to the interest of the revenue. He directed the learned transfer-pricing officer to make fresh order under section 92CA (3) after conducting inquiries into the international transaction undertaken by the assessee for assessment year 2012 13. The learned TPO was also directed to include the issues and findings already considered and decided by the TPO for assessment year 12 13 without disturbing them. Consequently, order under section 263 of the income tax act was passed on 30/3/2023. 014. Assessee is aggrieved with that order and is in appeal before us. 015. The learned authorized representative referred to the provisions of section 263 of the income tax act and submitted that any order passed by the learned transfer-pricing officer is subject to revision under section 263 of the incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iv. He further relied upon the decision of the Reliance Money Infrastructure Ltd versus principal Commissioner of income tax (ITA number 3259/M/2017 dated 6/10/2017 wherein in paragraph number 26 also reference was made that the amendment to section 263 is also prospective. v. Reference was also made to the decision of the coordinate bench in case of ITA number 3469/M/2010 dated 6/11/2015 in case of A V industries wherein in paragraph number 11 it was stated that when the revisionary order was passed on 25/3/2010 and it was held that the amendment did not apply to this case. vi. The learned authorized representative further relied upon the decision of ITA number 1056/PU when/2016 dated 27/6/2019 in case of Shruti Rahul Mane wherein the revisionary order dated 10/3/2016 was held to be not covered by the above amendment. vii. Further reference was made to ITA number 932/PU when/2016 dated 7/3/2019 in case of Mr. Sunil C Bhaybhang wherein in paragraph number eight it was held that the amendment with effect from 1/4/2014 by introduction of explanation 2 would not apply retrospectively. viii. He further referred to the decision of the coordinate bench in case of ITA number ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g officer and therefore there is no need to go to the deeming fiction provided in explanation 2 of section 263 of the act. vii. He further submitted that it is to be seen as on the date of examination of the records by the respective revisionary authority and not the dates of the order, which is subject to revision. viii. In the result, it was submitted that there is no merit in the appeal of the assessee as assessee does not want to state anything on the facts and merits of the case. Nothing is also submitted before the learned CIT. 020. We have carefully considered the rival contention and perused the orders of the lower authorities. As per provisions of section 263 of the income tax act several authorities are authorized to call for and examine‟ the record of any proceedings‟ under the income tax act and if they consider that any order passed therein by the respective authorities including the learned transfer pricing officer is erroneous insofar as it is prejudicial to the interest of the revenue, such authority may after giving the assessee an opportunity of being heard and after making or causing to be made such enquiry as deems necessary, passed such o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he interest of revenue u/s 263(1) itself. 025. Coming to the various judicial precedents cited by the learned authorized representative those are merely on the issue whether the explanation 2 introduced under section 263 of the income tax act applies prospectively or retrospectively. Before us that are not the issue, therefore, those judgments do not help the case of the assessee. 026. It is not the case of the assessee that a. the date on which the revisionary authority examined the record, the order of the transfer pricing officer was not forming the part of such record or b. The show cause notice is issued to the assessee prior to 1/4/ 2022, when revisionary authority was not authorized to revise the order of the learned transfer-pricing officer. 027. Further explanation 1 (a) to section 263 of the Act is also amended with effect from 1/4/2022 wherein the order passed by the learned transfer pricing officer is also included and in sub clause (iii) the order under section 92CA by the transfer pricing officer is included. Therefore, even if such order is passed by the transfer pricing Officer prior to 1/4/2022, but is available before the assessing officer passing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment or cancelling the assessment and directing a fresh assessment, after making or causing to be made any such inquiry as he deems necessary. It is proposed to provide that in addition to the existing provision, the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner may call for and examine the record of any proceedings under the Act, and if he considers that any order passed by the Transfer Pricing Officer under the Act is erroneous in so far as it is prejudicial to the interests of revenue, he may pass such order thereon as the circumstances of the case justify, including an order modifying the order under section 92CA or cancelling the order under section 92CA and directing a fresh order under section 92CA, after making or causing to be made any such inquiry as he deems necessary. Such order shall be passed only after giving the assessee an opportunity of being heard. It is further proposed to amend clause (a) of Explanation 1 to the said sub-section also to include an order under section 92CA by the Transfer Pricing Officer for the purposes of the said section. It is also proposed that the clause (c) of the Explanati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee for assessment year 2012 13 against the revisionary order passed under section 263 of the income tax act is dismissed. 034. In ITA number 2003/MUM/2023 assessee is challenging the revision order passed by the learned Commissioner of income tax (TP) 4, Mumbai dated 29/3/2023 wherein it has been held that the transfer pricing assessment order passed under section 92CA (3) for that assessment year on 27/1/2021 without examination of the arm s-length price of the international transaction of export sales and import purchases is erroneous and prejudicial to the interest of revenue. 035. In ITA number 2004/MUM/2023 the assessee has challenged the order under section 263 of the income tax act passed for assessment year 2018 19 on 31/3/2023 wherein it is held that the order under section 92CA (3) dated 22/7/2021 is erroneous and prejudicial to the interest of revenue as it was passed without examining arm s-length price of the international transaction of export sales and import purchases. 036. ITA number 2005/MUM/2023 for assessment year 2019 20 is preferred by the assessee challenging the correctness of the revisionary order passed under section 263 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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