Magic Software Enterprises India Pvt. ltd., Pune V. Income-tax Officer,

CO 97/PUN/2014

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 2711 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 30 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 31-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 23-01-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 01-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AJAY KERING
• Keywords: Reopening of assessment; Transfer pricing; Search and seizure; Opportunity of being heard; International transaction; Avoidance of tax; Reason to believe
• Section: 92C; 143(3); 92D; 92B; 92F; 142(1); 92A; 92E; 148; 144; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 1 801 /P U N/20 1 3 / ASSESSMENT YEAR: 20 07 - 08 THE INCOME TAX OFFICER , WARD 11 (1), PUNE . / APPELLANT VS. MAGIC SOFTWARE ENTERPRISES INDIA PVT. LTD., 9/12, TARA ICON, MUMBAI PUNE ROAD, WAKADEWADI, PUNE 41100 3 . / RESPONDENT PAN: AA BCM2443B . / CO NO. 97 /P U N/201 4 / ASSESSMENT YEAR : 20 07 - 08 / ASSESSMENT YEAR : 20 07 - 08 (OUT OF ITA NO.1 801 /P U N/201 3 ) MAGIC SOFTWARE ENTERPRISES INDIA PVT. LTD., 9/12, TARA ICON, MUMBAI PUNE ROAD, WAKADEWADI, P UNE 411003 / CROSS OBJECT OR PAN: AABCM2443B VS. THE INCOME TAX OFFICER, WARD 11(1), PUNE . / RESPONDENT ASSESSEE BY : S /S HRI ARUN CHHAB R A & AJAY KERING REVENUE BY : SHRI SUHAS KULKARNI / DATE OF HEARING : 2 3 . 0 1 .201 7 / DATE OF PRONOUNCEMENT: 31 . 0 1 .201 7 ITA NO . 1 801 / P U N /201 3 CO NO. 97 /P U N/201 4 MAGIC SOFTWARE ENTERPRISES INDIA PVT. LTD. 2 / ORDER PER SUSHMA CHOWLA, JM: T H E APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF CIT( A ) - IT/TP, PUNE , DATED 3 1 . 07 .201 3 RELATING TO ASSESSMENT YEAR 20 07 - 08 AGAINST THE ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) . THE ASSESSEE HAS ALSO FILED CROSS OBJECTIONS AGAINST THE APPEAL OF REVENUE. 2. THE APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTIONS FI LED BY THE ASSESSEE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 3. THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE TIME BARRED BY 26 DAYS. THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF D ELAY ALONG WITH AN THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF D ELAY ALONG WITH AN AFFIDAVIT OF THE DIRECTOR OF ASSESSEE, WHEREIN IT IS POINTED OUT THAT THE CROSS OBJECTIONS AGAINST THE APPEAL FILED BY THE REVENUE WERE DELAYED BECAUSE OF APPOINTMENT OF SENIOR COUNSEL FOR REPRESENTING THE CASE. WE FIND MERIT IN THE PLE A OF THE ASSESSEE IN THIS REGARD AND CONDONE THE DELAY AND ADMIT THE CROSS OBJECTIONS AND PROCEED TO DECIDE THE PRESENT APPEAL. 4. THE ASSESSEE HAS ALSO FILED AN APPLICATION FOR ADMISSION OF ADDITIONAL CROSS OBJECTIONS WHICH READ AS UNDER: - A. THE LD. A SSESSING OFFICER ERRED IN LAW, ON FACTS AND IN CIRCUMSTANCES OF THE CASE IN RE - OPENING ASSESSMENT UNDER SECTION 148 OF THE ACT BASED ON AN ORDER PASSED BY THE TRANSFER PRICING OFFICER U/S 92CA OF THE ACT WHICH WAS VOID AUTHORITIES BELOW INITIO B. THE LD. TRANSFER PRICING ORDER PASSED UNDER SECTION 92CA(3) OF THE ACT WAS WITHOUT JURISDICTION SINCE IT WAS ISSUED ON THE BASIS OF AN INCORRECT REFERENCE MADE BY THE ASSESSING OFFICER WITHOUT THERE BEING ANY PENDING ASSESSMENT PROCEEDINGS. ITA NO . 1 801 / P U N /201 3 CO NO. 97 /P U N/201 4 MAGIC SOFTWARE ENTERPRISES INDIA PVT. LTD. 3 WITHOUT PREJUDICE, THE TRANSFER PRICING ADJUSTMENT MADE AS PER THE ORDER PASSED UNDER SECTION 143 READ WITH SECTION 147 OF THE ACT IS INVALID BEING MADE IN PURSUANCE OF A TRANSFER PRICING ORDER WHICH WAS BAD IN LAW. 5. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSE E POINTED OUT THAT THE ADDITIONAL CROSS OBJECTIONS MERITS TO BE ADMITTED AS IT IS PURELY LEGAL ISSUE AND THE FACTS RELATING TO THE SAME ARE ALREADY ON RECORD. RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE APEX COURT IN NATIONAL POWER CO. LTD. VS. CIT (1998) 229 ITR 383 (SC). WE FIND MERIT IN THE PLEA OF ASSESSEE AND ADMIT THE ADDITIONAL CROSS OBJECTIONS RAISED BY THE ASSESSEE. THE SAID ADDITIONAL CROSS OBJECTIONS RAISED BY THE ASSESSEE ARE AGAINST REOPENING OF ASSESSMENT UNDER SECTION 148 OF THE ACT, WHICH GOES TO THE ROOT OF THE ASSESSMENT MADE AGAINST THE ASSESSEE. HENCE, WE PROCEED TO DECIDE THE ADDITIONAL CROSS OBJECTIONS FIRST. BOTH THE ASSESSEE AND THE REVENUE HAVE FILED APPEALS AGAINST RESPECTIVE PORTIONS OF THE ORDER OF CIT(A), WHEREIN THE I SSUES HAVE BEEN DECIDED AGAINST APPLICATION OF TRANSFER PRICING PROVISIONS. 6. THE FIRST ISSUE WHICH ARISES FOR ADJUDICATION IN THE PRESENT APPEAL IS VIS - - VIS PROCEDURE ADOPTED BY THE ASSESSING OFFICER WHILE REOPENING ASSESSMENT UNDER SECTION 148 OF TH E ACT, WHICH IN TURN, IS BASED ON ORDER PASSED BY THE TRANSFER PRICING OFFICER (IN SHORT THE TPO) UNDER SECTION 92CA OF THE ACT. THE TPO HAD PASSED THE ORDER UNDER SECTION 92CA(3) OF THE ACT ON A DATE WHEN THERE WERE NO PENDING ASSESSMENT PROCEEDINGS. THEREAFTER, THE ASSESSING OFFICER RECORDS REASONS FOR REOPENING THE ASSESSMENT UNDER SECTION 148 OF THE ACT, BASED ON SUCH ORDER PASSED BY THE ASSESSING OFFICER ALLEGING THAT THE INCOME HAS ESCAPED ASSESSMENT IN THE HANDS OF ASSESSEE ON ACCOUNT OF ARM'S LE NGTH PRICE OF INTERNATIONAL TRANSACTION. THE ASSESSEE IS AGGRIEVED BY RE - ASSESSMENT PROCEEDINGS INITIATED AGAINST IT UNDER SECTION 147 / 148 OF THE ACT AND HAS RAISED ITA NO . 1 801 / P U N /201 3 CO NO. 97 /P U N/201 4 MAGIC SOFTWARE ENTERPRISES INDIA PVT. LTD. 4 TWO ISSUES THAT THE TRANSFER PRICING ORDER PASSED WAS WITHOUT JURISDICTION AND CONSEQUEN TLY, RE - ASSESSMENT COULD NOT BE MADE UNDER SECTION 148 OF THE ACT. WITHOUT PREJUDICE, IT IS FURTHER POINTED OUT THAT THE TRANSFER PRICING ADJUSTMENT MADE IN THE HANDS OF ASSESSEE VIDE ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT IS INVALID BEIN G MADE PURSUANT TO TRANSFER PRICING ORDER WHICH WAS BAD IN LAW. THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS BEFORE US AND HAS REFERRED TO THE SEQUENCE OF EVENTS TO ESTABLISH ITS CASE THAT THE ASSESSING OFFICER / TPO HAD INITIATED TRANSFER PRICING / ASSESSM ENT PROCEEDINGS AND PASSED ORDER UNDER SECTION 92CA OF THE ACT WITHOUT THERE BEING ONGOING ASSESSMENT IN RELATION TO THE RELEVANT YEAR. THE ASSESSEE FURTHER ALLEGES THAT THE ASSESSING OFFICER HAD INITIATED RE - ASSESSMENT PROCEEDINGS TO CIRCUMVENT THE FAILU RE TO ASSESS THE INCOME UNDER NORMAL PROVISIONS WITHIN STIPULATED TIME. FURTHER, FOR INITIATING ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAD RELIED ON THE TPOS ORDER WHICH ITSELF WAS BAD IN LAW. THE ASSESSEE THUS, PLEADS THAT THE FOLLOWING PROPOSIT IONS NEED TO BE ADDRESSED FOR ADJUDICATING THE ISSUE. 1) INITIATION OF PROCEEDINGS UNDER SECTION 147 HAVE BEEN UNDERTAKEN TO ASSESS THE INCOME UNDER NORMAL PROVISIONS; 2) LD. AO HAS NOT FORMED BELIEF POST DUE APPLICATION OF MIND AS IS EVIDENT FROM THE RE ASONS GIVEN FOR REOPENING THE ASSESSMENT; 3) FORMATION OF BELIEF IS BASED ON MATERIAL (I.E. TPOS ORDER) WHICH COULD NOT BE TAKEN COGNIZANCE OF FOR THE REASON THAT TPOS ORDER DATED 29 TH OCTOBER, 2010 WAS WITHOUT SANCTION OF LAW SINCE PROCEEDINGS U/S 143( 3) WERE NEVER INITIATED HENCE NO VALID REFERENCE COULD HAVE BEEN MADE TO THE TPO. 7. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER SUBMITTED THAT THE ISSUE ARISING IN THE PRESENT APPEAL IS IDENTICAL IN FACTS TO THE ISSUE BEFORE THE PUNE BENCH OF TRIBUNAL IN MAXIMIZE LEARNING PVT. LTD. VS. ACIT IN ITA NO.2234/PN/2012, RELATING TO ASSESSMENT YEAR 2007 - 08, ORDER DATED 02.02.2015, WHEREIN IDENTICAL FACTUAL ASPECTS WERE NOTED BY THE TRIBUNAL AND IT WAS HELD THAT REOPENING OF ASSESSMENT IS BAD IN LAW AND IS WITHOUT JURISDICTION. THE LEARNED ITA NO . 1 801 / P U N /201 3 CO NO. 97 /P U N/201 4 MAGIC SOFTWARE ENTERPRISES INDIA PVT. LTD. 5 AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER POINTED OUT THAT THE PUNE BENCH OF TRIBUNAL IN KAESER COMPRESSORS (INDIA) PVT. LTD. VS. ACIT IN ITA NO.2379/PN/2012, RELATING TO ASSESSMENT YEAR 2007 - 08, O RDER DATED 20.05.2015 HAS APPLIED THE PRINCIPLE LAID DOWN IN MAXIMIZE LEARNING PVT. LTD. VS. ACIT (SUPRA). HE FURTHER REFERRED TO THE RATIO LAID DOWN BY THE HONBLE HIGH COURT OF DELHI IN CIT VS. XL INDIA BUSINESS SERVICES (P) LTD. IN ITA NO.713/2015, JUD GMENT DATED 14.09.2015 AND POINTED OUT THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT IN CASE THIS JURISDICTIONAL ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE, THEN THE A PPEAL FILED BY THE REVENUE BECOMES INFRUCTUOUS AND THE CROSS OBJECTIONS RAISED BY THE ASSESSEE ON MERITS BECOME ACADEMIC. 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, RELIED ON THE ORDERS OF AUTHORITIES BELOW. HAND, RELIED ON THE ORDERS OF AUTHORITIES BELOW. 9. WE HAV E HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. BEFORE ADJUDICATING THE ISSUE ON MERITS, WE ADJUDICATE THE ADDITIONAL CROSS OBJECTIONS RAISED BY THE ASSESSEE BEFORE US, WHEREIN THE ASSESSEE HAS CHALLENGED THE REOPENING OF ASSESSMENT UNDER SECTION 14 7 / 148 OF THE ACT. IN ORDER TO APPRECIATE THE FACTS OF THE CASE, REFERENCE IS MADE TO THE SEQUENCE OF EVENTS WHICH ARE TABULATED BY THE ASSESSEE IN ITS WRITTEN PROPOSITIONS , AS UNDER: - DATE PARTICULARS 30/10/2007 THE ASSESSEE HAS FILED RETURN OF INCOME SHOWING INCOME OF RS.NIL 30/10/2008 LAST DATE FOR ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT I.E. 12 MONTHS FROM THE END OF THE MONTH IN WHICH THE RETURN IS FILED 15/10/2010 SHOW CAUSE NOTICE U/S 92(C)(3) WAS PASSED 26/10/2010 REPLY TO SCN WAS FILED 29/10/2010 TP ORDER ISSUED MAKING AN ADJUSTMENT OF RS.85,63,973/ - 14/01/2011 NOTICE U/S 148 WAS ISSUED AS WELL AS CERTAIN INFORMATION U/S 142(1) / 143(2) NOTICE WAS ISSUED CALLING FOR SOME ITA NO . 1 801 / P U N /201 3 CO NO. 97 /P U N/201 4 MAGIC SOFTWARE ENTERPRISES INDIA PVT. LTD. 6 INFORMATION (REASSESSMENT NOTICE HAS BEEN ISSUED WITHIN 6 Y EARS FROM RELEVANT ASSESSMENT YEAR I.E. BEFORE 31.03.2014 17/02/2011 IN RESPONSE TO NOTICE U/S 148, ASSESSEE REQUESTED THAT RETURN ORIGINALLY FILED ON 30 - 10 - 2007 BE CONSIDERED AS FINAL AND REQUESTED FOR REASONS FOR REOPENING OF ASSESSMENT 28/02/2011 ASSE SSEE WAS PROVIDED WITH REASONS FOR REOPENING OF ASSESSMENT 23/12/2011 DRAFT ASSESSMENT ORDER WAS PASSED AND BEEN SERVED ON 5/1/2012 29/02/2012 ORDER U/S 143(3) R.W.S. 147 OF THE ACT WAS PASSED 10. IN THE FACTS OF THE CASE, THE PROCEEDINGS RELAT E TO AS SESSMENT YEAR 2007 - 08, WHEREIN THE RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 30.10.2007. THE DUE DATE FOR ISSUING NOTICE UNDER SECTION 143(2) OF THE ACT I.E. 12 MONTHS FROM THE END OF MONTH IN WHICH RETURN OF INCOME WA S FILED EXPIRED ON 30.10.2008. A DMITTEDLY, NO NOTICE WAS ISSUED TO THE ASSESSEE UNDER SECTION 143(2) OF THE ACT TO PICK UP THE ASSESSMENT FOR SCRUTINY. THEREAFTER, ON 17.12.2009 AS EVIDENT FROM THE ORDER OF TPO REFERENCE WAS RECEIVED BY THE TPO FOR ADJUDICATING THE ARM'S LENGTH PRICE OF INTERNATIONAL TRANSACTION. THE TPO ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE UNDER SECTION 92C(3) OF THE ACT ON 15.10.2010. IT MAY BE POINTED OUT HEREIN THAT THE PROCEEDINGS BEFORE THE TPO HAD STARTED AFTER THE TIME PERIOD PROVIDED UNDER THE STATUTE FOR ISSUE OF NOTICE UNDER SECTION 143(2) OF THE ACT. THE ASSESSEE PARTICIPATED IN THE TP PROCEEDINGS AND FILED REPLY ON 26.10.2010 AND THE TPO ISSUED AN ORDER MAKING AN ADJUSTMENT OF RS. 85,63,973/ - ON 29.10.2010. THEREAFTER, REASONS WERE RECORDED BY THE ASSE SSING OFFICER UNDER SECTION 147 OF THE ACT AND NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED ON 14.01.2011 ALONG WITH CALLING FOR CERTAIN INFORMATION UNDER SECTION 142(1) / 143(2) OF THE ACT. THE ASSESSEE ADMITS THAT THE RE - ASSESSMENT NOTICE WAS ISSUED W ITHIN SIX YEARS FROM THE RELEVANT ASSESSMENT YEAR I.E. BEFORE 31.03.2014. IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT, THE ASSESSEE VIDE LETTER DATED 17.02.2011 REQUESTED THAT ORIGINAL RETURN OF INCOME FILED BY IT BE CONSIDERED AS FILED IN ITA NO . 1 801 / P U N /201 3 CO NO. 97 /P U N/201 4 MAGIC SOFTWARE ENTERPRISES INDIA PVT. LTD. 7 RESPONSE TO NOTICE ISSUED UNDER SECTION 148 OF THE ACT AND ALSO REQUESTED FOR REASONS FOR REOPENING THE ASSESSMENT. ON 28.02.2011, THE ASSESSEE WAS PROVIDED WITH REASONS FOR REOPENING OF ASSESSMENT AND THE DRAFT ASSESSMENT ORDER WAS PASSED ON 23.12.201 1. THE FINAL ASSESSMENT ORDER UNDER SECTION 143(3) R.W.S. 147 OF THE ACT WAS PASSED ON 29.02.2012. THE ASSESSEE IS AGGRIEVED BY THE PROCEEDINGS BEFORE THE ASSESSING OFFICER / TPO AND HAS ALLEGED THAT IN THE ABSENCE OF ANY PROCEEDINGS PENDING, REFERENCE M ADE TO THE TPO WAS INVALID. FURTHER, INITIATION OF RE - ASSESSMENT PROCEEDINGS ON THE BASIS OF ORDER PASSED BY THE TPO WAS TO CIRCUMVENT THE NORMAL PROVISIONS OF THE ACT, WHEREIN TIME LIMIT WAS PROVIDED FOR ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT . THE NEXT ASPECT OF THE ISSUE IS THAT WHERE THE ASSESSING OFFICER HAD RELIED ON THE ORDER PASSED BY THE TPO IN ORDER TO INITIATE RE - ASSESSMENT PROCEEDINGS AND SINCE THE ORDER OF TPO WAS VOID AB INITIO BEING ISSUED WITHOUT ANY AUTHORITY, THEN THE PROCEEDI NGS COMPLETED AGAINST THE ASSESSEE WERE VOID. 11. THE PERUSAL OF THE REASONS RECORDED FOR REOPENING THE ASSESSMENT REFLECT THE TPO HAD WORKED OUT THE ADJUSTMENT IN RELATION TO INTERNATIONAL TRANSACTION OF RS. 85,63,973 / - UNDER SECTION 92CA(3) OF THE ACT, ON A REFERENCE MADE BY THE ASSESSING OFFICER UNDER SECTION 92CA(1) OF THE ACT. IN VIEW OF THE SAME, ACCORDING TO THE ASSESSING OFFICER, ADJUSTMENT OF RS. 85,63,973/ - WAS TO BE MADE TO THE TOTAL INCOME AND INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT WI THIN THE MEANING OF SECTION 147(C)(I) OF THE ACT. ACCORDINGLY, THE ASSESSING OFFICER HAD REASON TO BELIEVE THAT INCOME TO THAT EXTENT HAD ESCAPED ASSESSMENT FOR THE IMPUGNED ASSESSMENT ORDER ON ACCOUNT OF ADJUSTMENT TO THE INTERNATIONAL TRANSACTION CARRIE D OUT BY THE ASSESSEE , P URSUAN T TO WHICH NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED TO THE ASSESSEE. THE ASSESSEE HAS CHALLENGED THE ITA NO . 1 801 / P U N /201 3 CO NO. 97 /P U N/201 4 MAGIC SOFTWARE ENTERPRISES INDIA PVT. LTD. 8 VALIDITY OF THE PROCEEDINGS INITIATED UNDER SECTION 148 OF THE ACT BY WAY OF ADDITIONAL GROUND IN CROSS OBJECTIONS. 1 2 . THE PLEA OF THE ASSESSEE BEFORE US WAS THAT THE SAID NOTICE ISSUED UNDER SECTION 148 OF THE ACT TO REOPEN THE ASSESSMENT WAS TO CIRCUMVENT THE SITUATION ARISING BECAUSE OF NON - ISSUE OF THE NOTICE UNDER SECTION 143(2) OF THE ACT WITHIN THE STIPULATED TIME PRESCRIBED UNDER THE ACT. AS PER THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE, THE NOTICE UNDER SECTION 143(2) OF THE ACT WAS TO BE ISSUED UPTO 31. 1 0.2008, WHICH ADMITTEDLY IN THE PRESENT CASE HAD NOT BEEN DONE. CONSEQUENTLY, NOTICE UNDER SECT ION 148 OF THE ACT WAS ISSUED ON 14.01.2011 BY THE ASSESSING OFFICER, IN ORDER TO RECTIFY THE SAID ERROR BY WAY OF REOPENING THE ASSESSMENT. THE SECOND CONTENTION RAISED BY THE ASSESSEE BEFORE US WAS THAT THE BASIS FOR REOPENING THE ASSESSMENT UNDER SECTI ON 147 OF THE ACT WAS ON AN INCORRECT REFERENCE MADE TO THE TPO UNDER SECTION 92CA OF THE ACT AND CONSEQUENTLY FURTHER PROCEEDINGS CARRIED OUT IN THE CASE ARE TO BE TREATED AS ILLEGAL. THE ASSESSING OFFICER HAD MADE THE REFERENCE TO THE TPO FOR DETERMINAT ION OF ARM'S LENGTH PRICE OF THE INTERNATIONAL TRANSACTION ENTERED INTO BY THE ASSESSEE ON 17 .1 2 .2009, WHICH WAS AT A POINT OF TIME WHEN NO PROCEEDINGS FOR ASSESSMENT WERE PENDING BEFORE THE ASSESSING OFFICER. CONSEQUENTLY, THE SAID REFERENCE MADE TO THE TPO BY THE ASSESSING OFFICER WAS BOTH INCORRECT AND ILLEGAL AND THE SUBSEQUENT ORDER PASSED BY THE TPO UNDER SECTION 92CA(3) OF THE ACT ON 2 9 .10.2010 WAS VOID AB INIT I O AND SUCH AN ORDER COULD NOT FORM BASIS TO FORM A BELIEF THAT CERTAIN INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT. ANOTHER ISSUE RAISED BEFORE US WAS THAT REASON TO BELIEVE THAT CERTAIN INCOME HAD ESCAPED ASSESSMENT UNDER THE PROVISIONS OF SECTION 147 OF THE ACT, HAS TO BE THAT OF THE ASSESSIN G OFFICER HIMSELF ITA NO . 1 801 / P U N /201 3 CO NO. 97 /P U N/201 4 MAGIC SOFTWARE ENTERPRISES INDIA PVT. LTD. 9 AND NOT THAT OF ANY OTHER AUTHORITY. BY MAKING REFERENCE TO THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT, THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE BASIS FOR HOLDING THAT THE INCOME HAS ESCAPED ASSES SMENT IS THE ADJUSTMENT WORKED OUT BY THE TPO UNDER SECTION 92CA OF THE ACT, AS PER WHICH ADJUSTMENT OF RS. 85,63,973/ - WAS TO BE MADE TO THE TOTAL INCOME AND CONSEQUENTLY INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT. WHERE THE SATISFACTION OF REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEAR WAS BASED ON THE ORDER PASSED BY THE TPO UNDER SECTION 92CA OF THE ACT, IT CANNOT BE SAID TO BE THE BELIEF OF THE ASSESSING OFFICER, A S UNDER THE PROVISIONS OF SECTION 147 OF THE ACT, IT IS THE BELIEF OF THE ASSESSING OFFICER WHICH CAN FORM THE BASIS FOR REOPENING THE ASSESSMENT AND NOTICE ISSUED/SERVED UNDER SECTION 148 OF THE ACT. ANOTHER POINT RAISED BY THE LD. AUTHORIZED REPRESENTAT IVE FOR THE ASSESSEE WAS THAT THE REFERENCE TO THE PROVISIONS OF SECTION 147(C)(I) OF THE ACT BY THE ASSESSING OFFICER WAS WITHOUT APPLICATION OF MIND AND ON THIS ACCOUNT ALSO THE REOPENING OF THE ASSESSMENT HAS TO FAIL. 1 3 . THE LD. AUTHORIZED REPRESENTAT IVE FOR THE ASSESSEE FURTHER POINTED OUT THAT COMPARATIVE CHART OF IMPORTANT DATES AND EVENTS VIS - - VIS THE FACTS OF THE PRESENT CASE WERE SIMILAR TO THE FACTS BEFORE THE TRIBUNAL IN MAXIMIZE LEARNING (P.) LTD. VS. ACIT (SUPRA). IT WAS POINTED OUT BY THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT THE RE - ASSESSMENT PROCEEDINGS UNDER SECTION 147/148 OF THE ACT WERE INITIATED IN RELATION TO ASSESSMENT YEAR 2007 - 08 IN BOTH THE CASES. THE RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 30 .10.2007 WHEREA S THE RETURN OF INCOME BY MAXIMIZE LEARNING (P.) LTD. WAS FILED ON 05.11.2007. IT WAS FURTHER POINTED OUT THAT IN BOTH THE CASES NO INTIMATION UNDER SECTION 143(1) OF THE ACT ITA NO . 1 801 / P U N /201 3 CO NO. 97 /P U N/201 4 MAGIC SOFTWARE ENTERPRISES INDIA PVT. LTD. 10 WAS SERVED UPON THE ASSESSEE. FURTHER, AS IN THE CASE OF THE ASSESSEE , NO NOTIC E UNDER SECTION 143(2) OF THE ACT WAS ISSUED WITHIN THE PRESCRIBED PERIOD IN THE CASE OF MAXIMIZE LEARNING (P.) LTD. VS. ACIT (SUPRA) AND IN BOTH THE CASES FOR SUCH NON - ISSUE OF NOTICE UNDER SECTION 143(2) OF THE ACT WITHIN THE PRESCRIBED PERIOD, THE ASSES SMENT GETS BARRED BY LIMITATION ON 31.03.2010. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER POINTED OUT THAT THE REFERENCE OF THE CASE WAS MADE BY THE ASSESSING OFFICER TO THE TPO FOR DETERMINATION OF ARM'S LENGTH PRICE OF THE INTERNATIONAL TRANSACTION IN THE CASE OF THE ASSESSEE ON 17 . 09 .2009 AND IN THE CASE OF MAXIMIZE LEARNING (P.) LTD. VS. ACIT (SUPRA) ON 14.09.2009. THE TPO HAD PASSED THE ORDER UNDER SECTION 92CA(3) OF THE ACT PROPOSING THE ADJUSTMENT ON ACCOUNT OF ARM'S LENGTH PRICE OF THE INTERNATIONAL TRANSACTION IN THE CASE OF THE ASSESSEE ON 2 9 .10.2010 AND IN THE CASE OF MAXIMIZE LEARNING (P.) LTD. VS. ACIT (SUPRA) ON 29.10.2010. THEREAFTER, NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED BY THE ASSESSING OFFICER IN THE CASE OF THE ASSESSEE. THE FACTS OF THE CASE WERE IDENTICAL TO THE CASE IN MAXIMIZE LEARNING (P.) LTD. VS. ACIT (SUPRA). 1 4 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. WE FIND THAT THE FACTS AND ISSUE ARISING IN PRESENT CASE ARE IDENTICAL TO THE FAC TS AND ISSUE IN MAXIMIZE LEARNING (P.) LTD. VS. ACIT (SUPRA) . AFTER GOING THROUGH THE FACTUAL AND LEGAL ASPECTS OF THE CASE, THE TRIBUNAL VIDE ORDER DATED 02.02.2015 (SUPRA) HAD FIRSTLY HELD THAT THE ASSESSING OFFICER WAS PRECLUDED FOR MAKING A REFERENCE TO THE TPO UNDER SECTION 92CA(1) OF THE ACT FOR THE PURPOSE OF COMPUTING ARM'S LENGTH PRICE IN RELATION TO THE INTERNATIONAL TRANSACTION, WHEN NO ASSESSMENT PROCEEDINGS WERE PENDING IN RELATION TO THE RELEVANT ASSESSMENT YEAR. THE RELEVANT OBSERVATIONS OF THE TRIBUNAL (SUPRA) ARE IN PARAS 10 TO 23, WHICH READ AS UNDER : - ITA NO . 1 801 / P U N /201 3 CO NO. 97 /P U N/201 4 MAGIC SOFTWARE ENTERPRISES INDIA PVT. LTD. 11 10. THE CRUX OF THE CONTROVERSY REVOLVES AROUND THE PROVISIONS OF SECTION 147/148 OF THE ACT WHICH EMPOWER AN ASSESSING OFFICER TO ASSESS OR RE - ASSESS SUCH INCOME WHICH HAS ESCAPED ASSES SMENT. SECTION 147 OF THE ACT POSTULATES THAT IF THE ASSESSING OFFICER HAS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, HE MAY SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153 OF THE ACT, ASSESS OR RE - ASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF PROCEEDINGS UNDER THIS SECTION. A SIGNIFICANT EXPRESSION CONTAINED IN SECTION 147 OF THE ACT IS REASO N TO BELIEVE. IT IS JUDICIALLY WELL - SETTLED THAT SUCH BELIEF OF THE ASSESSING OFFICER MUST BE BASED ON SOME MATERIAL ON RECORD. IN OTHER WORDS, THERE MUST BE SOME MATERIAL ON RECORD TO ENABLE THE ASSESSING OFFICER TO ENTERTAIN A BELIEF THAT CERTAIN INCO ME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THE RELEVANT ASSESSMENT YEAR. 11. IN THE PRESENT CASE, THE PERTINENT POINT SETUP BY THE ASSESSEE IS THAT THE ASSESSING OFFICER HAS ENTERTAINED THE BELIEF FOR ESCAPEMENT OF INCOME BASED ON AN ORDER OF THE TPO DATED 29.10.2010 U/S 92CA(3) OF THE ACT WHICH IS NONEST AND VOID AB INITIO. THE FUNDAMENTAL POINT CANVASSED BY THE APPELLANT IS THAT THE REFERENCE U/S 92CA MADE BY THE ASSESSING OFFICER TO THE TPO FOR COMPUTING THE ARM'S LENGTH PRICE WAS INVALID BECAUSE W HEN THE REFERENCE WAS MADE ON 14.09.2009, NO ASSESSMENT PROCEEDINGS WERE PENDING IN RELATION TO THE INSTANT ASSESSMENT YEAR. 12. AT THIS STAGE, IT WOULD BE APPROPRIATE TO CONSIDER WHETHER THE REFERENCE 12. AT THIS STAGE, IT WOULD BE APPROPRIATE TO CONSIDER WHETHER THE REFERENCE MADE BY THE ASSESSING OFFICER TO THE TPO ON 14.09.200 9 FOR DETERMINATION OF ARM'S LENGTH PRICE IS VALID OR NOT ? FOR THE SAID PURPOSE, WE MAY BRIEFLY TOUCH - UPON THE RELEVANT PROVISIONS RELATING TO THE TRANSFER PRICING ASSESSMENT WHICH ARE CONTAINED IN SECTIONS 92 TO 92F OF THE ACT UNDER CHAPTER X RELATING TO THE SPECIAL PROVISIONS RELATING TO AVOIDANCE OF TAX . SECTIONS 92 TO 92F OF THE ACT WERE INTRODUCED BY THE FINANCE ACT, 2001 AND ARE EFFECTIVE FROM THE ASSESSMENT YEAR 2002 - 03. SECTION 92(1) OF THE ACT PROVIDES THAT ANY INCOME ARISING FROM AN INTERN ATIONAL TRANSACTION BETWEEN ASSOCIATED ENTERPRISES SHALL BE COMPUTED HAVING REGARD TO THE ARMS LENGTH PRICE. SECTIONS 92A AND 92B OF THE ACT CONTAIN PROVISIONS RELATING TO THE MEANING OF THE EXPRESSIONS ASSOCIATED ENTERPRISE AND INTERNATIONAL TRANSACT ION RESPECTIVELY. SECTION 92C OF THE ACT CONTAINS THE POWERS OF THE ASSESSING OFFICER AND THE MANNER OF DETERMINATION OF ARM'S LENGTH PRICE IN RELATION TO AN INTERNATIONAL TRANSACTION. SECTION 92CA OF THE ACT PROVIDES THAT WHERE THE ASSESSING OFFICER CO NSIDERS IT NECESSARY OR EXPEDIENT TO DO SO, HE MAY REFER TO THE TRANSFER PRICING OFFICER THE DETERMINATION OF THE ARMS LENGTH PRICE. SECTION 92CB OF THE ACT RELATES TO THE POWER OF THE BOARD TO MAKE SAFE HARBOUR RULES. SECTION 92D OF THE ACT RELATES TO MAINTENANCE AND KEEPING OF INFORMATION AND DOCUMENT BY PERSONS ENTERING INTO AN INTERNATIONAL TRANSACTION. SECTION 92E OF THE ACT PRESCRIBES THAT THE PERSON ENTERING INTO INTERNATIONAL TRANSACTION SHALL FURNISH A REPORT FROM A CHARTERED ACCOUNTANT IN FORM NO.3CEB. SECTION 92F OF THE ACT CONTAINS DEFINITIONS OF CERTAIN TERMS WHICH ARE RELEVANT TO COMPUTE ARM'S LENGTH PRICE, ETC. IN TERMS OF SECTIONS 92 TO 92F OF THE ACT. 13. NOTABLY, THE ENTIRE SCHEME AND MECHANISM TO COMPUTE ANY INCOME ARISING FROM AN INT ERNATIONAL TRANSACTION ENTERED BETWEEN ASSOCIATED ENTERPRISES IS ITA NO . 1 801 / P U N /201 3 CO NO. 97 /P U N/201 4 MAGIC SOFTWARE ENTERPRISES INDIA PVT. LTD. 12 CONTAINED IN SECTIONS 92 TO 92F OF THE ACT. NOW, WE MAY DEAL IN SLIGHT DETAIL THE PROVISIONS OF TRANSFER PRICING ASSESSMENT WHICH ARE RELEVANT IN THE CONTEXT OF CONTROVERSY BEFORE US. SECTI ON 92(1) OF THE ACT MANDATES THAT ANY INCOME ARISING FROM AN INTERNATIONAL TRANSACTION SHALL BE COMPUTED HAVING REGARD TO THE ARM'S LENGTH PRICE. SECTION 92C, INTER - ALIA, PRESCRIBES THE METHODS FOR COMPUTATION OF ARM'S LENGTH PRICE IN RELATION TO AN INTER NATIONAL TRANSACTION. SUB - SECTION (3) OF SECTION 92C OF THE ACT EMPOWERS THE ASSESSING OFFICER TO DETERMINE THE ARM'S LENGTH PRICE IN RELATION TO AN INTERNATIONAL TRANSACTION IN ACCORDANCE WITH THE METHODS PRESCRIBED IN SUB - SECTION (1), ON THE BASIS OF MA TERIAL OR INFORMATION OR DOCUMENTS AVAILABLE WITH HIM, AFTER ALLOWING THE ASSESSEE AN OPPORTUNITY IN THIS REGARD; AND, SUB - SECTION (4) OF SECTION 92C PROVIDES THAT WHERE THE ASSESSING OFFICER SO DETERMINES THE ARM'S LENGTH PRICE, HE MAY COMPUTE THE TOTAL I NCOME OF THE ASSESSEE HAVING REGARD TO THE ARM'S LENGTH PRICE SO DETERMINED. HOWEVER, SECTION 92CA OF THE ACT PROVIDES THAT WHERE THE ASSESSING OFFICER CONSIDERS IT NECESSARY OR EXPEDIENT SO TO DO, HE MAY REFER THE COMPUTATION OF ARM'S LENGTH PRICE IN REL ATION TO AN INTERNATIONAL TRANSACTION TO THE TPO. IN SUCH A SITUATION, THE TPO, AFTER TAKING INTO ACCOUNT THE MATERIAL BEFORE HIM, PASS AN ORDER IN WRITING U/S 92CA(3) OF THE ACT DETERMINING THE ARM'S LENGTH PRICE IN RELATION TO AN INTERNATIONAL TRANSACTI ON. ON RECEIPT OF THIS ORDER, SUB - SECTION (4) OF SECTION 92CA OF THE ACT REQUIRES THE ASSESSING OFFICER TO COMPUTE THE TOTAL INCOME OF THE ASSESSEE IN CONFORMITY WITH THE ARM'S LENGTH PRICE SO DETERMINED BY THE TPO. IN OTHER WORDS, THE DETERMINATION OF T HE ARM'S LENGTH PRICE, WHEREVER A REFERENCE IS MADE TO HIM, IS DONE BY THE TPO UNDER SUB - SECTION (3) OF SECTION 92CA BUT THE COMPUTATION OF TOTAL INCOME HAVING REGARD TO THE ARM'S LENGTH PRICE SO DETERMINED BY THE TPO IS REQUIRED TO BE DONE BY THE ASSESSIN G OFFICER UNDER SUB - SECTION (4) OF SECTION 92C, REQUIRED TO BE DONE BY THE ASSESSIN G OFFICER UNDER SUB - SECTION (4) OF SECTION 92C, READ WITH SUB - SECTION (4) OF SECTION 92CA. 14. IN SUM AND SUBSTANCE, THE SCHEME OF THE ACT POSTULATES THAT ARM'S LENGTH PRICE IN RELATION TO AN INTERNATIONAL TRANSACTION IS DETERMINED EITHER BY THE ASSESSING OFFICER AS PROVIDED IN SUB - SECTION (3) OF SECTION 92C OR BY THE TPO U/S 92CA(3) OF THE ACT WHERE A REFERENCE IS MADE TO HIM BY THE ASSESSING OFFICER. IN BOTH SITUATIONS, THE ASSESSING OFFICER IS REQUIRED TO COMPUTE THE TOTAL INCOME OF THE ASSESSEE HAVING REGARD TO THE ARM'S LENGTH PRICE OF THE INTERNATIONAL TRANSACTION SO DETERMINED, EITHER IN TERMS OF SUB - SECTION (4) OF SECTION 92C OR SUB - SECTION (4) OF SECTION 92CA. NOTABLY, SUB - SECTION (4) OF SECTION 92C COMES INTO PLAY WHERE AN ARM'S LENGTH PRICE IN R ELATION TO THE INTERNATIONAL TRANSACTION IS DETERMINED BY THE ASSESSING OFFICER AND SUB - SECTION (4) OF SECTION 92CA COMES INTO PLAY WHERE THE ARM'S LENGTH PRICE IN RELATION TO AN INTERNATIONAL TRANSACTION IS DETERMINED BY THE TPO, ON A REFERENCE BY THE ASS ESSING OFFICER. IN THE CASE BEFORE US, THE TOTAL INCOME OF THE ASSESSEE HAS BEEN COMPUTED HAVING REGARD TO THE ARM'S LENGTH PRICE DETERMINED BY THE TPO UNDER SECTION 92CA(3) OF THE ACT AND THEREFORE THE ASSESSING OFFICER HAS TAKEN RECOURSE TO SECTION 92CA (4) OF THE ACT. 15. IT IS QUITE CLEAR THAT THE PROCESS OF DETERMINATION OF ARM'S LENGTH PRICE IS TO BE CARRIED OUT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, MAY IT BE, UNDER SUB - SECTION (3) OF SECTION 92C WHERE THE ASSESSING OFFICER DETERMINES THE ARM 'S LENGTH PRICE OR UNDER SUB - SECTIONS (1) TO (3) OF SECTION 92CA, WHERE THE ASSESSING OFFICER REFERS THE DETERMINATION OF ARM'S LENGTH PRICE TO THE TPO. WE MAY ALSO REFER TO THE PROVISIONS OF SECTION 143(3) OF THE ACT DEALING WITH ASSESSMENT OF INCOME. I N TERMS OF CLAUSE (II) OF SUB - SECTION (3) OF SECTION 143, IT IS PRESCRIBED THAT THE ITA NO . 1 801 / P U N /201 3 CO NO. 97 /P U N/201 4 MAGIC SOFTWARE ENTERPRISES INDIA PVT. LTD. 13 ASSESSING OFFICER SHALL, BY AN ORDER IN WRITING, MAKE AN ASSESSMENT OF THE TOTAL INCOME OR LOSS OF THE ASSESSEE, AND DETERMINE THE SUM PAYABLE BY HIM OR REFUND ON ANY AMOUN T DUE TO HIM ON THE BASIS OF SUCH ASSESSMENT. IT IS ONLY IN THE COURSE OF SUCH ASSESSMENT OF TOTAL INCOME, THAT THE ASSESSING OFFICER IS OBLIGATED TO COMPUTE ANY INCOME ARISING FROM AN INTERNATIONAL TRANSACTION OF AN ASSESSEE WITH ASSOCIATED ENTERPRISES, HAVING REGARD TO THE ARM'S LENGTH PRICE. IN THIS BACKGROUND, IS IT NOT APPROPRIATE TO INFER THAT THE PROVISIONS OF SECTION 92 TO 92F OF THE ACT GET TRIGGERED ONLY DURING THE PENDENCY OF THE PROCESS OF ASSESSMENT OF TOTAL INCOME BEFORE THE ASSESSING OFFICE R, WHICH CULMINATES IN AN ORDER UNDER SECTION 143(3) OR SECTION 144 OF THE ACT, AS THE CASE MAY BE ? 16. IN - FACT, THE OCCASION WHICH REQUIRES THE ASSESSING OFFICER TO COMPUTE INCOME FROM AN INTERNATIONAL TRANSACTION ARISES ONLY DURING THE ASSESSMENT PROC EEDINGS, WHEREIN HE IS DETERMINING THE TOTAL INCOME OF THE ASSESSEE. THE APPELLANT HAS CANVASSED THE AFORESAID POSITION BEFORE US AND IN THIS CONTEXT REFERENCE HAS ALSO BEEN MADE TO THE CBDT INSTRUCTION NO.3 DATED 20 TH MAY, 2003 THE RELEVANT PORTION OF WH ICH READ AS UNDER : - ..........THE CENTRAL BOARD OF DIRECT TAXES, THEREFORE, HAVE DECIDED THAT WHEREVER THE AGGREGATE VALUE OF INTERNATIONAL TRANSACTION EXCEEDS RS.5 CRORES, THE CASE SHOULD BE PICKED UP FOR SCRUTINY AND REFERENCE UNDER SECTION 92CA BE MA DE TO THE TPO. IF THERE ARE MORE THAN ONE TRANSACTION WITH AN ASSOCIATED ENTERPRISE OR THERE ARE TRANSACTIONS WITH MORE THAN ONE ASSOCIATED ENTERPRISES THE AGGREGATE VALUE OF WHICH EXCEEDS RS.5 CRORES, THE TRANSACTIONS SHOULD BE REFERRED TO THE TPO. BEFO RE MAKING REFERENCE TO THE TPO, THE ASSESSING OFFICER HAS TO SEEK APPROVAL OF THE TO THE TPO, THE ASSESSING OFFICER HAS TO SEEK APPROVAL OF THE COMMISSIONER/DIRECTOR AS CONTEMPLATED UNDER THE ACT. UNDER THE PROVISIONS OF SECTION 92CA REFERENCE IS IN RELATION TO THE INTERNATIONAL TRANSACTION. HENCE ALL TRANSACTIONS HAVE TO BE EXPLICITLY MENTIONED IN THE LETTER OF REFERENCE. SINCE THE CASE WILL BE SELECTED FOR SCRUTINY BEFORE MAKING REFERENCE TO THE TPO, THE ASSESSING OFFICER MAY PROCEED TO EXAMINE OTHER ASPECTS OF THE CASE DURING PENDENCY OF ASSESSMENT PROCEEDINGS B UT AWAIT THE REPORT OF THE TPO ON THE VALUE OF INTERNATIONAL TRANSACTION BEFORE MAKING FINAL ASSESSMENT. [UNDERLINED FOR EMPHASIS BY US] 17. IT IS EMPHASIZED ON THE BASIS OF THE CBDT INSTRUCTION (SUPRA) THAT EVEN AS PER THE UNDERSTANDING OF THE CBDT, A C ASE IS TO BE SELECTED FOR SCRUTINY ASSESSMENT BEFORE THE ASSESSING OFFICER MAY REFER THE COMPUTATION OF ARM'S LENGTH PRICE IN RELATION TO AN INTERNATIONAL TRANSACTION TO THE TPO U/S 92CA OF THE ACT. THEREFORE, WE ARE INCLINED TO UPHOLD THE POSITION SOUGHT TO BE CANVASSED BY THE ASSESSEE THAT AN ASSESSING OFFICER CAN MAKE REFERENCE TO THE TPO U/S 92CA OF THE ACT ONLY AFTER SELECTING THE CASE FOR SCRUTINY ASSESSMENT. IN - FACT, THE AFORESAID UNDERLINED OBSERVATIONS OF THE CBDT INSTRUCTION (SUPRA) IS A POINTER TO THE LEGISLATIVE IMPORT THAT THE REFERENCE TO THE TPO FOR DETERMINING THE ARM'S LENGTH PRICE IN RELATION TO AN INTERNATIONAL TRANSACTION IS ENVISAGED ONLY IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, WHICH IS THE ONLY PROCESS KNOWN TO THE ACT, WHEREBY T HE ASSESSMENT OF TOTAL INCOME IS DONE. AS PER THE CBDT (SUPRA), THE ASSESSING OFFICER MAY PROCEED TO EXAMINE OTHER ASPECTS OF THE CASE DURING PENDENCY OF ASSESSMENT PROCEEDINGS BUT AWAIT THE REPORT OF THE TPO ON THE VALUE OF THE ITA NO . 1 801 / P U N /201 3 CO NO. 97 /P U N/201 4 MAGIC SOFTWARE ENTERPRISES INDIA PVT. LTD. 14 INTERNATIONAL TRANSACTIONS BEFORE MAKING ASSESSMENT SINCE THE CASE WOULD BE SELECTED FOR SCRUTINY BEFORE MAKING REFERENCE TO THE TPO. 18. IN THE CONTEXT OF THE AFORESAID CONTROVERSY, WE MAY REFER TO THE ARGUMENTS RAISED BY THE LD. CIT - DR WHEREBY IT IS CONTENDED THAT IT WAS OPEN FOR THE ASSESSING OFFICER TO MAKE A REFERENCE TO THE TPO FOR DETERMINATION OF ARM'S LENGTH PRICE WITHOUT ISSUING NOTICE U/S 143(2) OF THE ACT; IN OTHER WORDS, AS PER THE REVENUE, REFERENCE TO THE TPO U/S 92CA OF THE ACT CAN BE MADE EVEN IF NO ASSESSMENT PROCE EDING IS PENDING BEFORE THE ASSESSING OFFICER. IN THIS CONTEXT, IT IS SUBMITTED THAT THE ANNUAL NORMS FOR SELECTION OF CASES FOR SCRUTINY PRESCRIBED BY THE CBDT FOR ASSESSMENT YEAR 2007 - 08, INTER - ALIA, PRESCRIBED COMPULSORY SCRUTINY IN ALL CASES WHERE THE TOTAL VALUE OF INTERNATIONAL TRANSACTIONS AS DEFINED IN SECTION 92B EXCEEDED RS.15 CRORES. ACCORDING TO HER, IN SUCH A CASE, THE ASSESSING OFFICER CAN VERY WELL ISSUE THE NOTICE U/S 143(2) OF THE ACT AND THEN MAKE A REFERENCE TO THE TPO. HOWEVER, IT IS SUBMITTED THAT THE CBDT NORMS ALSO PROVIDE THAT A CASE WHICH IS NOT DIRECTLY COVERED UNDER THE AFORESAID COMPULSORY SCRUTINY NORM, CAN ALSO BE SELECTED FOR SCRUTINY IF THE ASSESSING OFFICER RECORDS A SATISFACTION AND SEEKS THE APPROVAL OF THE CCIT/DGIT (IN TERNATIONAL TAXATION)/DGIT (EXEMPTION). THE AFORESAID NORM HAS BEEN POINTED OUT TO SAY THAT IN ORDER TO PICK - UP A CASE FOR SCRUTINY, SOME SATISFACTION IS REQUIRED TO BE RECORDED BEFORE THE NOTICE U/S 143(2) OF THE ACT IS TO BE ISSUED. THIS EXERCISE, ACCO RDING TO THE LD. CIT - DR, COULD VERY WELL BE THE REFERENCE OF THE MATTER OF THE TPO, THEREFORE, THE STIPULATED PERIOD LAID DOWN BY THE CBDT DOES NOT PRE - SUPPOSE THAT THE ISSUE OF NOTICE U/S 143(2) OF THE ACT HAS TO BE NECESSARILY AND WITHOUT FAIL PRECEDE TH E REFERENCE TO TPO. 19. WE HAVE CAREFULLY CONSIDERED THE PLEA OF THE LD. CIT - DR, THAT IT IS OPEN TO THE DEPARTMENT TO MAKE A REFERENCE TO THE TPO WITHOUT ISSUING NOTICE U/S 143(2) OF THE ACT, BUT IN OUR VIEW, IT IS NOT SUPPORTED BY A SCHEMATIC READING OF T HE RELEVANT PROVISIONS RELATING TO THE TRANSFER PRICING ASSESSMENT CONTAINED IN SECTIONS 92 TO 92F. THE ENTIRE PURPOSE OF COMPUTATION OF ARM'S LENGTH PRICE IN RELATION TO AN INTERNATIONAL TRANSACTION IS FOUND IN SUB - SECTION (1) OF SECTION 92 OF THE ACT. SECTION 92(1) MANDATES THAT ANY INCOME ARISING FROM AN INTERNATIONAL TRANSACTION SHALL BE COMPUTED HAVING REGARD TO THE ARM'S LENGTH PRICE. THEREFORE, THE SOLE AIM OF COMPUTING THE ARM'S LENGTH PRICE IN RELATION TO ANY INTERNATIONAL TRANSACTION IS TO COMP UTE THE INCOME ARISING THEREFROM. THUS, THE COMPUTATION OF INCOME AND THE DETERMINATION OF ARM'S LENGTH PRICE IN RELATION TO THE INTERNATIONAL TRANSACTION HAVE TO GO HAND - IN - HAND AND WITHOUT THERE BEING AN OCCASION TO COMPUTE INCOME ARISING FROM AN INTERN ATIONAL TRANSACTION, IT IS DIFFICULT TO COMPREHEND THE PROCESS FOR COMPUTATION OF ARM'S LENGTH PRICE IN RELATION TO THE RELEVANT INTERNATIONAL TRANSACTION. THEREFORE, IT WOULD NOT BE OPEN FOR THE DEPARTMENT TO SAY THAT THE PROCESS OF COMPUTING ARM'S LENGT H PRICE OF AN INTERNATIONAL TRANSACTION OR A REFERENCE TO THE TPO TO DETERMINE ARM'S LENGTH PRICE CAN BE INITIATED IN THE ABSENCE OF ANY PROCEEDING FOR COMPUTING TOTAL INCOME OF THE ASSESSEE. 20. FURTHER, IN OUR VIEW, THE LD. CIT - DR HAS RELIED ON ONE OF TH E NORMS PRESCRIBED FOR PICKING A RETURN FOR SCRUTINY ASSESSMENT TO SAY THAT CERTAIN EXERCISE IS REQUIRED TO BE DONE ON THE PART OF THE ASSESSING OFFICER TO RECORD HIS SATISFACTION BEFORE THE MATTER IS PUT - UP TO THE CCIT/DGIT WHO SHALL APPROVE THE SELECTION OF CASE FOR SCRUTINY. ACCORDING TO HER, THE RECORDING OF SUCH SATISFACTION ITA NO . 1 801 / P U N /201 3 CO NO. 97 /P U N/201 4 MAGIC SOFTWARE ENTERPRISES INDIA PVT. LTD. 15 CONTEMPLATED IN THE CBDT INSTRUCTION, WOULD, INTER - ALIA, ENVISAGE A REFERENCE TO THE TPO ALSO. IN OUR CONSIDERED OPINION, THE RELIANCE PLACED BY THE LD. CIT - DR ON THE AFORESAID C BDT PROCEDURE FOR SELECTION OF CASES FOR SCRUTINY, CANNOT DISTRACT FROM THE RELEVANT STATUTORY PROVISIONS RELATING TO THE CONTROVERSY BEFORE US. IN - FACT, THE SCHEME OF THE ACT WHICH WE HAVE DEALT EARLIER, ESTABLISHES THAT THE WORK OF COMPUTING THE ARM'S L ENGTH PRICE IN RELATION TO INTERNATIONAL TRANSACTION ARISES ONLY AND ONLY WHEN THE INCOME FROM SUCH INTERNATIONAL TRANSACTION IS BEING ASSESSED. CERTAINLY, THE REFERENCE TO THE TPO FOR THE COMPUTATION OF ARM'S LENGTH PRICE CANNOT PRECEDE THE INITIATION OF THE ASSESSMENT PROCEEDINGS BY THE ASSESSING OFFICER BY ISSUANCE OF NOTICE U/S 143(2) OF THE ACT. 21. AS PER THE LD. CIT - DR, SECTION 92C(3) OR 92CA OF THE ACT DO NOT ENJOIN THE ASSESSING OFFICER TO HAVE ANY ASSESSMENT PROCEEDINGS PENDING BEFORE A REFEREN CE TO THE TPO CAN BE MADE FOR COMPUTATION OF ARM'S LENGTH PRICE IN RELATION TO AN INTERNATIONAL TRANSACTION. IN THIS CONTEXT, REFERENCE HAS BEEN MADE TO THE PHRASEOLOGY OF SECTION 92CA(1) OF THE ACT TO SAY THAT ONLY TWO CONDITIONS ARE PRESCRIBED THEREIN W HICH ARE TO BE FULFILLED BY THE ASSESSING OFFICER BEFORE REFERRING THE MATTER TO THE TPO. FIRSTLY, ASSESSEE SHOULD HAVE ENTERED INTO INTERNATIONAL TRANSACTION; AND, THAT IF THE ASSESSING OFFICER CONSIDERS IT NECESSARY AND EXPEDIENT TO DO SO, HE MAY REFER THE MATTER TO THE TPO UNDER APPROVAL OF THE COMMISSIONER. IF BOTH THE CONDITIONS ARE SATISFIED THERE IS NO BAR OR REQUIREMENT OF ANY ASSESSMENT PROCEEDINGS BEING PENDING, BEFORE THE REFERENCE IS MADE TO THE TPO. 22. THE AFORESAID PLEA OF THE LD. CIT - DR AL SO, IN OUR VIEW, FAILS TO TAKE INTO CONSIDERATION THE ENTIRE SCHEME ENVISAGED FOR THE TRANSFER PRICING ASSESSMENT IN SECTIONS 92 TO 92F OF THE ACT. THE PROVISIONS OF SECTIONS 92 TO 92F OF THE RELATE TO SECTIONS 92 TO 92F OF THE ACT. THE PROVISIONS OF SECTIONS 92 TO 92F OF THE RELATE TO COMPUTATION OF INCOME FROM THE INTERNATIONAL TRANSACT ION HAVING REGARD TO THE ARM'S LENGTH PRICE, MEANING OF ASSOCIATED ENTERPRISES, MEANING OF INTERNATIONAL TRANSACTION, DETERMINATION OF ARM'S LENGTH PRICE, KEEPING AND MAINTAINING OF INFORMATION AND DOCUMENTS BY PERSONS ENTERING INTO INTERNATIONAL TRANSACTI ONS, FURNISHING OF A REPORT FROM AN ACCOUNTANT BY PERSONS ENTERING INTO SUCH TRANSACTION AND THE DEFINITION OF CERTAIN EXPRESSIONS OCCURRING IN SUCH SECTIONS. THE AFORESAID PROVISIONS DO NOT OPERATE IN INDIVIDUAL SPHERES BUT THE SAME OPERATE WITH A SINGUL AR PURPOSE OF COMPUTING INCOME ARISING FROM AN INTERNATIONAL TRANSACTION. THE PROCESS OF COMPUTATION OF INCOME IS NECESSARILY A PART AND PARCEL OF THE ASSESSMENT PROCEEDINGS ENVISAGED UNDER THE ACT. SECTION 92CA OF THE ACT IS NOT AN INDEPENDENT PROVISION , BUT IT IS TRIGGERED ONLY WHEN THE OCCASION ARISES FOR APPLICATION OF SECTION 92(1) OF THE ACT, WHEREBY INCOME FROM AN INTERNATIONAL TRANSACTION IS TO BE COMPUTED HAVING REGARD TO ITS ARM'S LENGTH PRICE; AND, THE OCCASION TO COMPUTE THE INCOME WOULD ARISE ONLY WHEN THERE IS AN ON - GOING ASSESSMENT PROCEEDING. THEREFORE, REFERENCE MADE BY THE LD. CIT - DR TO THE PHRASEOLOGY OF SECTION 92CA(1) WITHOUT CONSIDERING THE ENTIRE SCHEMATIC ARRANGEMENT OF SECTIONS 92 TO 92F WOULD BE INCORRECT. 23. THEREFORE, WE CO NCLUDE THIS ASPECT BY HOLDING THAT THE ASSESSING OFFICER IS PRECLUDED FROM MAKING A REFERENCE TO THE TPO U/S 92CA(1) OF THE ACT FOR THE PURPOSES OF COMPUTING ARM'S LENGTH PRICE IN RELATION TO THE INTERNATIONAL TRANSACTION WHEN NO ASSESSMENT PROCEEDINGS ARE PENDING IN RELATION TO THE RELEVANT ASSESSMENT YEAR. ITA NO . 1 801 / P U N /201 3 CO NO. 97 /P U N/201 4 MAGIC SOFTWARE ENTERPRISES INDIA PVT. LTD. 16 1 5 . THE TRIBUNAL FURTHER HELD THAT WHEN REFERENCE WAS MADE TO THE TPO BY THE ASSESSING OFFICER FOR DETERMINATION OF ARM'S LENGTH PRICE IN RELATION TO THE INTERNATIONAL TRANSACTION, NO ASSESSMENT PROCE EDINGS WERE PENDING AND HENCE IT WAS AN INVALID REFERENCE. CONSEQUENTLY, THE SUBSEQUENT ORDER PASSED BY THE TPO DETERMINING THE ADJUSTMENT TO THE INTERNATIONAL TRANSACTION WAS A NULLITY IN LAW AND VOID AB INITIO . THE RELEVANT FINDINGS OF THE TRIBUNAL VID E PARAS 24 TO 27 READ AS UNDER : - 24. NOW, WE MAY COME BACK TO THE FACTS OF THE PRESENT CASE. IN THIS CASE, RETURN OF INCOME WAS FILED ON 05.11.2007, WHICH WAS PROCESSED U/S 143(1) OF THE ACT. ON 14.09.2009, THE ASSESSING OFFICER MADE A REFERENCE TO THE TPO FOR COMPUTATION OF ARM'S LENGTH PRICE IN RELATION TO AN INTERNATIONAL TRANSACTION ENTERED BY ASSESSEE WITH ITS ASSOCIATED ENTERPRISE. THE TPO, AFTER ALLOWING THE ASSESSEE OPPORTUNITY OF BEING HEARD AND AFTER TAKING INTO ACCOUNT THE MATERIAL AVAILABLE WITH HIM, PASSED AN ORDER DATED 29.10.2010 DETERMINING THE ARM'S LENGTH PRICE IN ACCORDANCE WITH SUB - SECTION (3) OF SECTION 92CA OF THE ACT. 25. IN THE BACKGROUND OF THE ABOVE FACTS, IT NEEDS TO BE ESTABLISHED AS TO WHETHER ON 14.09.2009 WHEN THE ASSES SING OFFICER MADE A REFERENCE TO THE TPO U/S 92CA(1) OF THE ACT, WAS THERE AN ASSESSMENT PROCEEDINGS U/S 143 OF THE ACT U/S 92CA(1) OF THE ACT, WAS THERE AN ASSESSMENT PROCEEDINGS U/S 143 OF THE ACT PENDING FOR THE YEAR UNDER CONSIDERATION. IN THE PRESENT CASE, WE ARE DEALING WITH ASSESSMENT YEAR 2007 - 08 AND ASSESSEE FILED ITS RETUR N OF INCOME ON 05.11.2007. IN TERMS OF CLAUSE (II) TO SUB - SECTION (2) OF SECTION 143 OF THE ACT, AS IT STOOD AT THE RELEVANT POINT OF TIME, NOTICE U/S 143(2) OF THE ACT IN ORDER TO SUBJECT THE RETURN OF INCOME TO SCRUTINY ASSESSMENT, SHOULD HAVE BEEN ISSU ED WITHIN THIS SIX MONTHS FROM THE END OF THE RELEVANT ASSESSMENT YEAR I.E. UPTO 30.09.2008. THERE IS NO DISPUTE THAT NO SUCH NOTICE HAS BEEN ISSUED WITHIN THE ABOVE STIPULATED PERIOD. A CONSEQUENCE OF THE AFORESAID SITUATION IS THAT THE RETURN OF INCOME FILED BY THE ASSESSEE ON 05.11.2007 BECAME FINAL AS NO SCRUTINY PROCEEDINGS WERE STARTED WITHIN THE PERIOD STIPULATED IN LAW. THE AFORESAID POSITION IS ALSO REINFORCED BY THE CBDT CIRCULAR NO.549 DATED 31.10.1989. AS PER THE CBDT, IF, AFTER FURNISHING R ETURN OF INCOME, AN ASSESSEE DOES NOT RECEIVE A NOTICE U/S 143(2) OF THE ACT FROM THE DEPARTMENT WITHIN PERIOD STIPULATED IN THE PROVISO TO SECTION 143(2) OF THE ACT, IT FOLLOWS THAT THE RETURN FILED BY THE ASSESSEE HAS BECOME FINAL AND NO SCRUTINY PROCEED INGS SHOULD BE STARTED IN RESPECT OF THAT RETURN. IN OTHER WORDS, IN THE PRESENT CASE, ASSESSMENT PROCEEDINGS U/S 143 OF THE ACT CAME TO END AND THE MATTER BECAME FINAL ON 30.09.2008 I.E. THE DATE WITHIN WHICH A NOTICE U/S 143(2) OF THE ACT WAS REQUIRED T O BE ISSUED, WHICH WAS NOT DONE. THE JUDGEMENT OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF VIPAN KHANNA VS. CIT AND OTHERS, 255 ITR 220 (P&H) IS ALSO TO THE SAME EFFECT. IN - FACT, AS PER THE HONBLE PUNJAB & HARYANA HIGH COURT, IN CASE WHERE A RETURN IS FILED AND IS PROCESSED AND NO NOTICE UNDER SUB - SECTION (2) OF SECTION 143 THEREAFTER IS SERVED ON THE ASSESSEE WITHIN THE STIPULATED PERIOD, THE ASSESSMENT PROCEEDINGS U/S 143 COME TO AN END AND MATTER BECOMES FINAL. AS PER THE HONBLE HIGH C OURT, ALTHOUGH ITA NO . 1 801 / P U N /201 3 CO NO. 97 /P U N/201 4 MAGIC SOFTWARE ENTERPRISES INDIA PVT. LTD. 17 TECHNICALLY NO ASSESSMENT IS FRAMED IN SUCH A CASE, YET THE PROCEEDINGS FOR ASSESSMENT STAND TERMINATED. TO THE SIMILAR EFFECT IS THE RATIO OF THE JUDGEMENTS OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF (I) CIT VS. M. CHELLAPPAN AND ANOT HER, 281 ITR 444 (MADRAS); AND, (II) CIT VS. DEEP BARUAH, 329 ITR 362 (MADRAS). 26. IN THIS BACKGROUND, IF ON THE DATE OF MAKING OF REFERENCE TO THE TPO, THE ASSESSMENT PROCEEDINGS U/S 143 OF THE ACT HAD COME TO AN END AND THE PROCEEDINGS FOR ASSESSMENT ST OOD TERMINATED, THERE WAS NO OCCASION FOR THE ASSESSING OFFICER TO HAVE MADE A REFERENCE TO THE TPO FOR DETERMINATION OF ARM'S LENGTH PRICE OF THE INTERNATIONAL TRANSACTIONS IN TERMS OF SECTION 92CA OF THE ACT. WE HAVE ALREADY INFERRED IN THE EARLIER PARA S THAT UNDER THE PROVISIONS OF SECTION 92CA OF THE ACT, A REFERENCE TO THE TPO FOR COMPUTATION OF ARM'S LENGTH PRICE IN RELATION TO INTERNATIONAL TRANSACTIONS IS PERMISSIBLE ONLY IN THE COURSE OF THE ASSESSMENT PROCEEDINGS. 27. IN VIEW OF THE AFORESAID DIS CUSSION, IT HAS TO BE INFERRED THAT WHEN THE ASSESSING OFFICER MADE REFERENCE TO THE TPO ON 14.09.2009 FOR DETERMINATION OF ARM'S LENGTH PRICE IN RELATION TO AN INTERNATIONAL TRANSACTION, THERE WAS NO ASSESSMENT PROCEEDINGS PENDING, AND THEREFORE IT WAS AN INVALID REFERENCE. CONSEQUENTLY, THE SUBSEQUENT ORDER PASSED BY THE TPO ON 29.10.2010 (SUPRA) DETERMINING THE ADJUSTMENT OF RS.2,49,48,811/ - TO THE INTERNATIONAL TRANSACTION IS A NULLITY IN LAW AND VOID AB INITIO. 1 6 . ANOTHER ASPECT NOTED BY THE TRIBUN AL WAS WHETHER IN THE ABOVE SAID 1 6 . ANOTHER ASPECT NOTED BY THE TRIBUN AL WAS WHETHER IN THE ABOVE SAID CIRCUMSTANCES THE ORDER OF THE TPO COULD BE VALID MATERIAL FOR THE ASSESSING OFFICER TO ENTERTAIN A BELIEF THAT CERTAIN INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT. IT WAS H ELD BY THE TRIBUNAL THAT THE REASONS RECORDED BY THE ASSESSING OFFICER IN THE PRESENT CASE DO NOT MEET THE REQUIREMENT OF SECTION 147 OF THE ACT AND THEREFORE THE ASSESSING OFFICER HAD NO JURISDICTION TO ISSUE NOTICE UNDER SECTION 148 OF THE ACT DATED 14.0 1.2011 AND AS A CONSEQUENCE, THE SUBSEQUENT ASSESSMENT ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 AND 144C(3) OF THE ACT WAS LIABLE TO BE QUASHED. THE RELEVANT OBSERVATIONS OF THE TRIBUNAL (SUPRA) ARE IN PARAS 28 TO 35, WHICH ARE AS UNDER : - 28. THE N EXT ASPECT IS AS TO WHETHER, IN THE ABOVE CIRCUMSTANCES, THE ORDER OF THE TPO DATED 29.10.2010 (SUPRA) CAN BE A VALID MATERIAL FOR THE ASSESSING OFFICER TO ENTERTAIN A BELIEF THAT CERTAIN INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT WITHIN THE MEANING O F SECTION 147 OF THE ACT. ITA NO . 1 801 / P U N /201 3 CO NO. 97 /P U N/201 4 MAGIC SOFTWARE ENTERPRISES INDIA PVT. LTD. 18 29. IN THIS CONTEXT, THE LD. CID - DR HAS VEHEMENTLY POINTED OUT THAT THE RETURN OF INCOME FILED BY THE ASSESSEE INCLUDED INTERNATIONAL TRANSACTIONS ENTERED WITH THE ASSOCIATED ENTERPRISE AND SUCH RETURN OF INCOME WAS REQUIRED TO B E TAKEN - UP FOR COMPULSORY SCRUTINY, AS PER THE NORMS OF THE CBDT RELATING TO ASSESSMENT YEAR 2007 - 08. THEREFORE, WHEN SUCH A RETURN OF INCOME WAS NOT PICKED UP FOR A SCRUTINY ASSESSMENT WITHIN THE STIPULATED PERIOD, THE ONLY COURSE FOR THE REVENUE WAS TO ISSUE NOTICE U/S 148 OF THE ACT ON THE GROUND THAT CERTAIN INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. SECONDLY, IT IS POINTED OUT THAT THE RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 05.11.2007 WITH CIRCLE 11(2), PUNE WHEREAS FORM NO.3CEB FOR THE SAME ASSESSMENT YEAR WAS FILED IN CIRCLE 1(1), PUNE ON 31.10.2007. IT IS ONLY ON 28.07.2009, FORM NO.3CE B WAS RECEIVED BY THE PRESENT ASSESSING OFFICER I.E. CIRCLE 1(1) WHEREIN IT WAS SEEN THAT ASSESSEE HAD ENTERED INTO INTERNATIONAL TRANSACTIONS WITH AS SOCIATED ENTERPRISES. FOR THIS REASON, THE CASE OF THE ASSESSEE HAD ESCAPED FROM COMPULSORY SELECTION FOR SCRUTINY. ON THIS BASIS, IT IS SOUGHT TO BE POINTED OUT THAT THE RE - OPENING OF ASSESSMENT BY ISSUANCE OF NOTICE U/S 147/148 OF THE ACT IS JUSTIFIED. 30. APART FROM THE AFORESAID, IT WAS ALSO VEHEMENTLY ARGUED THAT ANY ILLEGALITY OR IRREGULARITY IN MAKING OF A REFERENCE TO THE TPO U/S 92CA OF THE ACT CANNOT RENDER THE SUBSEQUENT ORDER PASSED BY THE TPO U/S 92CA(3) OF THE ACT AS A NULLITY QUA THE BELIE F ENTERTAINED BY THE ASSESSING OFFICER THAT CERTAIN INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT ON ACCOUNT OF DETERMINATION OF ARM'S LENGTH PRICE OF THE INTERNATIONAL TRANSACTION WITH THE ASSOCIATED ENTERPRISE. THE LD. CIT - DR SUBMITTED THAT IN THE CAS E OF THE POORAN MAL VS. DIT, (1974) 93 ITR 505 (SC), THE COURT HAD REFUSED TO EXCLUDE FROM THE PURVIEW OF ASSESSMENT EVEN THE MATERIAL AND EVIDENCE WHICH WAS OBTAINED BY THE DEPARTMENT EVEN THROUGH A ILLEGAL SEARCH AND EVIDENCE WHICH WAS OBTAINED BY THE DEPARTMENT EVEN THROUGH A ILLEGAL SEARCH AND SEIZURE ACTION. DRAWING A SIMILAR AN ALOGY TO THE FACTS OF THE PRESENT CASE, IT IS CONTENDED THAT AN ILLEGAL OR INCORRECT REFERENCE TO THE TPO WOULD NOT INVALIDATE THE ARM'S LENGTH PRICE DETERMINED BY HIM U/S 92CA(3) OF THE ACT, WHICH SHOWED THAT AN ADJUSTMENT OF RS.2,49,43,811/ - WAS REQUIRED TO BE MADE TO THE STATED VALUES OF THE INTERNATIONAL TRANSACTION. THEREFORE, THE AFORESAID MATERIAL PROVIDED A GOOD GROUND FOR THE ASSESSING OFFICER TO FORMULATE A BELIEF THAT CERTAIN INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. 31. AT THE OUTSET, WE MAY NOTICE THAT THE VALIDITY OF THE NOTICE REOPENING THE ASSESSMENT U/S 148 OF THE ACT HAS TO BE DETERMINED ON THE BASIS OF THE REASONS WHICH ARE DISCLOSED TO THE ASSESSEE. THOSE REASONS CONSTITUTE THE FOUNDATION OF THE ACTION INITIATED BY THE ASSESSING OFFICER OF REOPENING THE ASSESSMENT. THE AVERMENTS MADE BY THE LD. CIT - DR REGARDING THE COMPULSORY SCRUTINY OF RETURNS WHICH INVOLVED INTERNATIONAL TRANSACTIONS AND/OR THAT THE FORM NO.3CEB WAS NOT FILED WITH THE ASSESSING OFFICER, ARE REASONS WHICH ARE N OT FINDING A PLACE IN THE REASONS RECORDED BY THE ASSESSING OFFICER FOR RE - ASSESSMENT. THE REASONS RECORDED BY THE ASSESSING OFFICER FOR RE - ASSESSMENT, HAVE ALREADY BEEN REPRODUCED BY US IN THE EARLIER PART OF THIS ORDER. ITS A TRITE LAW THAT THE REASON S RECORDED BY THE ASSESSING OFFICER ARE ALONE TO BE EXAMINED SO AS TO TEST THEIR VALIDITY. IN THIS CONTEXT, A REFERENCE CAN BE MADE TO THE JUDGEMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF NORTHERN EXIM (P) LTD. VS. DCIT, (2012) 20 TAXMANN.COM 466 (DELHI) WHEREIN IT HAS BEEN HELD THAT A COURT IS TO BE GUIDED ONLY BY THE REASONS RECORDED FOR RE - ASSESSMENT AND NOT BY THE REASONS OR EXPLANATION GIVEN BY THE REVENUE AT A LATER STAGE IN RESPECT OF THE NOTICE OF RE - ITA NO . 1 801 / P U N /201 3 CO NO. 97 /P U N/201 4 MAGIC SOFTWARE ENTERPRISES INDIA PVT. LTD. 19 ASSESSMENT. THE HONBLE DELHI HIGH COUR T AFTER MAKING A REFERENCE TO THE FOLLOWING JUDGEMENTS : - ( I ) JAMNA LAL KOBRA VS. ITO (1968) 69 ITR 461 (ALL.); ( II ) CIT VS. AGARWALLA BROS. (1991) 189 ITR 786 (PAT.); ( III ) G.M. RAJGHARIA VS. ITO, (1975) 98 ITR 486 (PAT.); ( IV ) ASA JOHN DEVINATHAN VS. ADDL. CIT, (1980) 126 I TR 270 (MAD.); ( V ) EAST COAST COMMERCIAL CO. LTD. VS. ITO, (1981) 128 ITR 326 (CAL.); ( VI ) EQUITABLE INVESTMENT CO. (P.) LTD. VS. ITO, (1988) 174 ITR 714 (CAL.); AND, ( VII ) S. SREERAMACHANDRA MURTHY VS. DCIT, (2000) 243 ITR 427 (AP). HELD AS UNDER : - THE RATIO LAID DOW N IN ALL THESE CASES IS THAT, HAVING REGARD TO THE ENTIRE SCHEME AND PURPOSE OF THE ACT, THE VALIDITY OF THE ASSUMPTION OF JURISDICTION UNDER SECTION 147 CAN BE TESTED ONLY BY REFERENCE TO THE REASONS RECORDED UNDER SECTION 148(2) OF THE ACT AND THE ASSESS ING OFFICER IS NOT AUTHORIZED TO REFER TO ANY OTHER REASON EVEN IF IT CAN BE OTHERWISE INFERRED AND/OR GATHERED FROM THE RECORDS. HE IS CONFINED TO THE RECORDED REASONS TO SUPPORT THE ASSUMPTION OF JURISDICTION. HE CANNOT RECORD ONLY SOME OF THE REASONS AND KEEP THE OTHERS UP HIS SLEEVES TO BE DISCLOSED BEFORE THE COURT IF HIS ACTION IS EVER CHALLENGED IN A COURT OF DISCLOSED BEFORE THE COURT IF HIS ACTION IS EVER CHALLENGED IN A COURT OF LAW. 32. TO THE SIMILAR EFFECT IS THE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF 31 INFOTECH LTD. VS. ACIT, (2010) 329 ITR 25 7 (BOM.) WHEREIN IT HAS BEEN HELD THAT THE VALIDITY OF THE REOPENING OF ASSESSMENT HAS TO BE DETERMINED WITH REFERENCE TO THE REASONS WHICH HAD WEIGHED WITH THE ASSESSING OFFICER AND THOSE CANNOT BE ADDED TO OR SUPPORTED ON A BASIS WHICH WAS NOT PRESENT TO THE MIND OF THE ASSESSING OFFICER WHEN HE ISSUED THE NOTICE TO REOPEN THE ASSESSMENT. AS A CONSEQUENCE OF OUR AFORESAID DISCUSSION, WE ARE UNABLE TO CONSIDER THE VALIDITY OF THE ISSUANCE OF NOTICE OF RE - ASSESSMENT BASED ON THE EXPLANATION/REASONS NOW SOU GHT TO BE SUPPLEMENTED BY THE LD. CIT - DR, WHICH OTHERWISE DO NOT FIND A PLACE IN THE REASONS RECORDED BY THE ASSESSING OFFICER. 33. WE HAVE ALSO CAREFULLY CONSIDERED THE OTHER PLEA RAISED BY THE LD. CIT - DR BASED ON THE JUDGEMENT OF THE HONBLE SUPREME COUR T IN THE CASE OF POORAN MAL (SUPRA). IT IS QUITE WELL - SETTLED THAT ANY ILLEGALITY OR IRREGULARITY IN OBTAINING MATERIAL OR EVIDENCE WOULD NOT PRECLUDE THE REVENUE AUTHORITIES FROM UTILIZING THE SAME IN ASSESSMENT OF INCOME UNLESS THE GENUINENESS AND CORRE CTNESS OF THE MATERIAL OR EVIDENCE IS IN DOUBT. SO HOWEVER, IN THE PRESENT CASE, WE ARE NOT DEALING WITH THE POWER OF THE ASSESSING OFFICER TO COMPUTE INCOME OF THE ASSESSEE ARISING FROM AN INTERNATIONAL TRANSACTION BASED ON THE ARM'S LENGTH PRICE DETERMI NED BY THE TPO. INDEED, AS WE HAD SEEN EARLIER THE COMPUTATION OF TOTAL INCOME FROM AN INTERNATIONAL TRANSACTION HAS TO BE DONE BY THE ASSESSING OFFICER UNDER SUB - SECTION (4) OF SECTION 92C READ WITH SUB - SECTION (4) OF SECTION 92CA OF THE ACT HAVING REGAR D TO THE ARM'S LENGTH PRICE DETERMINED BY THE TPO. THERE IS NO ITA NO . 1 801 / P U N /201 3 CO NO. 97 /P U N/201 4 MAGIC SOFTWARE ENTERPRISES INDIA PVT. LTD. 20 DISPUTE ON THE SAID ASPECT. IN THE PRESENT CASE, THE POINT MADE OUT BY THE ASSESSEE IS THAT A NONEST AND VOID AB INITIO ORDER PASSED BY THE TPO ON 29.10.2010 DETERMINING THE ARM'S LENGTH PRIC E U/S 92CA(3) OF THE ACT CANNOT FORM A BASIS TO FORMULATE A BELIEF THAT CERTAIN INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT. THE CONTROVERSY IN THE PRESENT CASE HAS TO BE ADJUDICATED IN THE LIGHT OF THE PAR AMETERS OF SECTION 147/148 OF THE ACT. IN A SOMEWHAT SIMILAR SITUATION, THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF BRIG B. LAL VS. WTO, 127 ITR 308 (RAJ.) WAS DEALING WITH A SITUATION WHERE THE REOPENING OF ASSESSMENT WAS BASED ON A REPORT SUBMITTED BY THE VALUATION OFFICER IN AN INVALID REFERENCE. AS PER THE HONBLE HIGH COURT, A REPORT SUBMITTED BY THE VALUATION OFFICER IN AN INVALID REFERENCE MUST BE TREATED AS A NULLITY IN THE EYES OF LAW, NONEST AND VOID AB INITIO. ACCORDING TO THE HONBLE HIGH COURT, WHERE THE REOPENING OF ASSESSMENT WAS BASED ON SUCH ILLEGAL, NULL AND VOID REPORT, THE ENTIRE FABRIC FOR REOPENING OF THE ASSESSMENT PROCEEDINGS FALLS FLAT. IN OUR CONSIDERED OPINION, THE RATIO OF THE JUDGEMENT OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF BRIG B. LAL (SUPRA) IS SQUARELY APPLICABLE IN THE PRESENT CASE. THEREFORE, HAVING REGARD TO THE PECULIAR FACTS OF THE PRESENT CASE, THE PROPOSITION SOUGHT TO BE CANVASSED BY THE LD. CIT - DR BASED ON THE DECISION IN THE CASE OF POORAN MAL (SU PRA) DOES NOT VALIDATE THE ISSUANCE OF NOTICE U/S 148 OF THE ACT TO REOPEN THE ASSESSMENT IN THE PRESENT CASE. 34. THE LD. CIT - DR ALSO RELIED UPON THE JUDGEMENT OF THE PUNJAB & HARYANA HIGH COURT IN THE CASE OF M/S COCA COLA INDIA INC VS. ACIT, (2009) 17 7 TAXMANN.COM 103 TO SAY THAT AN ORDER PASSED BY THE TPO CAN BE A REASON FOR RE - ASSESSMENT OF INCOME U/S 147/148 OF THE ACT. THE ABOVE PROPOSITION CANVASSED BY THE LD. CIT - DR IS NOT AN ABSOLUTE PROPOSITION, AND THE JUDGEMENT OF THE HONBLE BY THE LD. CIT - DR IS NOT AN ABSOLUTE PROPOSITION, AND THE JUDGEMENT OF THE HONBLE PUNJAB & HARYAN A HIGH COURT IN THE CASE OF M/S COCA COLA INDIA INC (SUPRA) HAS TO BE APPRECIATED IN THE LIGHT OF THE FACT - SITUATION THEREIN. IN THE CASE OF M/S COCA COLA INDIA INC (SUPRA), THE STAND OF THE REVENUE WAS THAT ASSESSEE WAS SUPPRESSING ITS PROFIT IN ITS TRAN SACTIONS WITH ITS ASSOCIATED ENTERPRISES IN THE PERIOD PRIOR TO THE ASSESSMENT YEAR 2002 - 03. THE REVENUE CONTENDED THE SUPPRESSION OF PROFITS ON THE GROUND OF AN ORDER PASSED BY THE TPO UNDER CHAPTER X AFTER 01.04.2002 IN RELATION TO AN ASSESSMENT YEAR AF TER 01.04.2002. SUCH ORDER OF THE TPO FORMED THE BASIS FOR THE ASSESSING OFFICER TO FORMULATE A BELIEF THAT THERE WAS AN ESCAPEMENT OF INCOME WITHIN THE MEANING OF SECTION 147 OF THE ACT FOR THE PERIOD PRIOR TO ASSESSMENT YEAR 2002 - 03. PERTINENTLY, IN TH E PERIOD PRIOR TO ASSESSMENT YEAR 2002 - 03, THE UN - AMENDED PROVISIONS OF SECTION 92 OF THE ACT DID NOT PROVIDE FOR AN ORDER BY THE TPO DETERMINING ARM'S LENGTH PRICE. THE ASSESSEE ATTACKED THE INITIATION OF PROCEEDINGS U/S 147/148 OF THE ACT FOR A PERIOD P RIOR TO ASSESSMENT YEAR 2002 - 03 CONTENDING THAT THE ORDER OF THE TPO PASSED UNDER CHAPTER X SUBSEQUENT TO THE AMENDMENT MADE WITH EFFECT FROM 01.04.2002 IN RESPECT OF A SUBSEQUENT ASSESSMENT YEAR WAS IRRELEVANT. IN OTHER WORDS, ASSESSEE CANVASSED THAT THE ORDER OF THE TPO IN RESPECT OF A SUBSEQUENT ASSESSMENT YEAR COULD NOT BE A GROUND TO REOPEN THE ASSESSMENT OF A YEAR WHICH WAS PRIOR TO THE AMENDMENT OF SECTION 92 OF THE ACT WITH EFFECT FROM 01.04.2002. THE HONBLE HIGH COURT DISAGREED WITH THE ASSESSEE S DEFENSE AND UPHELD THE ACTION OF THE ASSESSING OFFICER IN TAKING INTO ACCOUNT THE SUBSEQUENT ORDER OF THE TPO FOR FORMING A BELIEF THAT CERTAIN INCOME LIABLE TO TAX HAD ESCAPED ASSESSMENT EVEN IN RELATION TO AN ASSESSMENT YEAR PRIOR TO THE INSERTION OF 92CA OF THE ACT WITH EFFECT FROM 01.04.2002. AS PER THE HONBLE HIGH COURT, THE ORDER OF THE TPO ITA NO . 1 801 / P U N /201 3 CO NO. 97 /P U N/201 4 MAGIC SOFTWARE ENTERPRISES INDIA PVT. LTD. 21 COULD CERTAINLY HAVE NEXUS FOR REACHING A CONCLUSION THAT INCOME HAS BEEN INCORRECTLY ASSESSED OR HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT. THE PROPOSITION LAID DOWN BY THE HONBLE HIGH COURT IS TO THE EFFECT THAT THE ORDER OF THE TPO PASSED U/S 92CA OF THE ACT AFTER 01.04.2002 I.E. UNDER THE AMENDED PROVISIONS, CAN BE ONE OF THE REASONS FOR RE - ASSESSMENT FOR A PERIOD PRIOR TO THE IN TRODUCTION OF THE AMENDED CHAPTER X WITH EFFECT FROM 01.04.2002. CLEARLY, THE DISPUTE IN THE CASE OF M/S COCA COLA INDIA INC (SUPRA) STOOD ON A DIFFERENT FOOTING THAN THE DISPUTE BEFORE US. IN THE CASE OF M/S COCA COLA INDIA INC (SUPRA), IT WAS NOBODYS CASE THAT THERE WAS ANY ILLEGALITY IN THE REFERENCE MADE TO THE TPO OR THAT THE ORDER OF THE TPO WAS VOID AB INITIO WITH RESPECT TO THE ASSESSMENT YEAR FOR WHICH THE TPO PASSED THE ORDER U/S 92CA(3) OF THE ACT. THE ONLY POINT WAS WHETHER ORDER OF THE TPO PASSED U/S 92CA(3) OF THE ACT FOR A SUBSEQUENT ASSESSMENT YEAR COULD FORM A BASIS FOR THE ASSESSING OFFICER TO FORMULATE A BELIEF ABOUT THE ESCAPEMENT OF INCOME IN A PRECEDING ASSESSMENT YEAR WHEN THE AMENDED REGIME OF CHAPTER X WAS NOT ON THE STATUTE. TH E FACTS AND CIRCUMSTANCES IN THE PRESENT CASE ARE ENTIRELY DIFFERENT AND THEREFORE THE JUDGEMENT OF THE PUNJAB & HARYANA HIGH COURT IN THE CASE OF M/S COCA COLA INDIA INC (SUPRA) DOES NOT HELP THE CASE OF THE REVENUE. 35. AS A CONSEQUENCE, WE CONCLUDE BY HOLDING THAT THE REASONS RECORDED BY THE ASSESSING OFFICER IN THE PRESENT CASE DO NOT MEET WITH THE REQUIREMENTS OF SECTION 147 OF THE ACT AND THEREFORE THE ASSESSING OFFICER HAD NO JURISDICTION TO ISSUE NOTICE U/S 148 OF THE ACT DATED 14.01.2011. AS A CONSEQUENCE, THE SUBSEQUENT ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 147 AND 144C(13) OF THE ACT IS LIABLE TO BE QUASHED. WE HOLD SO. 1 7 . SIMILAR PROPOSITION HAS BEEN APPLIED BY THE PUNE BENCH OF TRIBUNAL IN KAESER COMPRESSORS (INDIA) PVT. LTD. VS. AC IT (SUPRA). 18 . THE HONBLE HIGH COURT OF DELHI IN CIT VS. XL INDIA BUSINESS SERVICES (P) LTD. (SUPRA) HAS LAID DOWN THE PROPOSITION AS UNDER: - IN THE PRESENT CASE, THE REFERENCE BY THE AO OF THE ISSUE OF DETERMINATION OF ALP TO THE TPO WAS ITSELF WITH OUT JURISDICTION. THE RESULTANT REPORT OF THE TPO COULD NOT BE ACTED UPON FOR ISSUANCE OF THE NOTICE OF RE - ASSESSMENT TO THE ASSESSEE UNDER SECTION 148 OF THE ACT. MOREOVER, IN THE PRESENT CASE, THE COURT NOTICES THAT THE REASONS FOR REOPENING WERE RECOR DED BY THE AO SUBSEQUENT TO THE REPLY RECEIVED FROM THE ASSESSEE TO THE NOTICE. 19 . THE HONBLE HIGH COURT OF DELHI THUS, HELD THAT WHERE REFERENCE MADE BY THE ASSESSING OFFICER TO THE TPO WAS MADE WHEN THERE WERE NO ASSESSMENT PROCEEDINGS PENDING BEFORE HIM AND CONSEQUENTLY, THE ISSUE OF DETERMINATION OF ARM'S LENGTH PRICE TO THE TPO WAS WITHOUT JURISDICTION. IT IS FURTHER HELD BY THE ITA NO . 1 801 / P U N /201 3 CO NO. 97 /P U N/201 4 MAGIC SOFTWARE ENTERPRISES INDIA PVT. LTD. 22 HONBLE HIGH COURT OF DELHI THAT RESULTANT REPORT OF THE TPO COULD NOT BE ACTED UPON FOR ISSUANCE OF NOTICE FOR RE - ASSES SMENT PROCEEDINGS TO THE ASSESSEE UNDER SECTION 148 OF THE ACT. 20 . AS REFERRED TO BY US IN THE PARAS HEREINABOVE THE FACTUAL ASPECTS OF THE PRESENT CASE BEFORE US ARE IDENTICAL TO THE FACTS BEFORE THE TRIBUNAL IN MAXIMIZE LEARNING (P.) LTD. VS. ACIT (S UPRA) AND HENCE THE RATIO LAID DOWN BY THE CO - ORDINATE BENCH OF THE TRIBUNAL SQUARELY APPLICABLE TO THE FACTS OF THE CASE. FURTHER, WE ALSO APPLY THE PRINCIPLE LAID DOWN BY THE HONBLE HIGH COURT OF DELHI IN CIT VS. XL INDIA BUSINESS SERVICES (P) LTD. (SU PRA). IN VIEW THEREOF, WE HOLD THAT WHEN NO ASSESSMENT PROCEEDINGS WERE PENDING IN RELATION TO THE RELEVANT ASSESSMENT YEAR, THE ASSESSING OFFICER WAS PRECLUDED FROM MAKING A REFERENCE TO THE TPO UNDER SECTION 92CA(1) OF THE ACT FOR THE PURPOSES OF COMPUT ING THE ARM'S LENGTH PRICE IN RELATION TO THE INTERNATIONAL TRANSACTION. CONSEQUENTLY, ORDER PASSED BY THE TPO UNDER SECTION 92CA(3) PROPOSING AN ADJUSTMENT OF RS. 85,63,973 / - TO THE ARM'S LENGTH PRICE OF THE INTERNATIONAL TRANSACTION WAS A NULLITY IN LAW AND VOID AB INITIO . IN VIEW OF THE ABOVE - SAID FACTS AND CIRCUMSTANCES, SUCH AN ORDER PASSED BY THE TPO WAS NOT A VALID MATERIAL FOR THE ASSESSING OFFICER TO ENTERTAIN A BELIEF THAT CERTAIN INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT. CONSEQUENTLY, WE HOLD THAT THE REASONS RECORDED FOR REOPENING THE ASSESSMENT UNDER SECTION 147 OF THE ACT DO NOT MEET THE REQUIREMENTS OF THE SECTION AND HENCE THE ASSESSING OFFICER HAD NO JURISDICTION TO ISSUE NOTICE UNDER SEC TION 148 OF THE ACT. CONSEQUENTLY, THE SUBSEQUENT ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) R.W.S. 147 AND 144C OF THE ACT IS LIABLE TO BE QUASHED. ACCORDINGLY, WE HOLD SO. ITA NO . 1 801 / P U N /201 3 CO NO. 97 /P U N/201 4 MAGIC SOFTWARE ENTERPRISES INDIA PVT. LTD. 23 2 1. AS THE PRELIMINARY ISSUE RAISED BY THE ASSESSEE REGARDING T HE ASSUMPTION OF JURISDICTION BY THE ASSESSING OFFICER HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AND THE IMPUGNED ASSESSMENT HAS BEEN QUASHED, THE REMAINING GROUNDS OF CROSS OBJECTIONS RAISED BY THE ASSESSEE REGARDING THE MERITS OF THE ADDITION BECOME ACA DEMIC AND HENCE THE SAME ARE NOT ADJUDICATED FOR THE PRESENT. 22 . IN THE RESULT, APPEAL OF THE REVENUE BECOMES INFRUCTUOUS AND THE ADDITIONAL GROUND OF CROSS OBJECTION S IS ALLOWED AND REMAINING CROSS OBJECTIONS ON MERITS BECOME ACADEMIC. ORDER PRONOUNCED ON THIS 31 ST DAY OF JANUARY , 201 7 . SD/ - SD/ - SD/ - SD/ - ( ANIL CHATURVEDI ) ( SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / P UNE ; D ATED : 31 ST JANUARY , 201 7 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE C I T ( A) - I T/TP , PUNE ; 4. / THE C I T - I / DIT (TP/IT) , PUNE ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // ASSISTANT REGISTRAR