Ravindra Heraeus Private Limited, Udaipur V. Pr. CIT, Udiapur , Udaipur

ITA 14/JODH/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6783 (ITAT-JODHPUR)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 30-03-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANCHITA KUMAR
• Keywords: Revision of order; Transfer pricing; Principle of natural justice; International transaction; Difference of opinion; Prejudicial to interest; Change of opinion; Set aside
• Section: 263; 92C; 143(3); 92E; 143(2); 44AB; 13; 22; 92CA; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, JODHPUR BENCH , JODHPUR BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SING H YADAV, AM ITA. NO. 14 & 15/JODH/2021 ASSESSMENT YEAR : 2015-16 & 2016-17 RAVINDRA HERAEUS PRIVATE LIMITED, A 196(A) MIA, F ROAD, MADRI UDAIPUR. VS. THE PR. CIT, UDAIPUR. PAN/GIR NO.: AAACR 9695 R APPELLANT RESPONDENT ASSESSEE BY : SHRI RAJENDRA JAIN (C.A.), SMT RAKSHA BIRLA (C.A.), SHRI MOHIT SONI (ADV.) & SHRI N.K. SINGHVI (C.A.) REVENUE BY : SMT. SANCHITA KUMAR (CIT) A DATE OF HEARING : 10/08/2021 DATE OF PRONOUNCEMENT : 08/09/2021 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THESE ARE TWO APPEALS FILED BY THE ASSESSEE AGAINS T THE ORDERS OF LD. PR. CIT PASSED U/S 263 OF THE ACT DATED 01.03.2 021 FOR THE ASSESSMENT YEARS 2015-16 & 2016-17 RESPECTIVELY. SI NCE COMMON ISSUES ARE INVOLVED, BOTH THE APPEALS WERE HEARD TO GETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER. ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 2 2. WITH THE CONSENT OF BOTH THE PARTIES, THE CASE O F THE ASSESSEE IN ITA NO. 14/JP/2021 FOR A.Y 2015-16 WAS TAKEN AS THE LEAD CASE WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APP EAL:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE ORDER PASSED U/S 263 BY THE LD. PR. CIT, UDAIPU R IS BAD IN LAW & BAD IN FACTS. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. PR. CIT, UDAIPUR GROSSLY ERRED IN ASSUMING JURI SDICTION AND INITIATING PROCEEDING UNDER SECTION 263 OF THE ACT SINCE THE ORDER PASSED BY THE LD. AO WAS NEITHER ERRONEO US NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE AS THE AO HAD NOT ONLY MADE ADEQUATE INQUIRIES, BUT HAD ALSO UNDERTAK EN NECESSARY VERIFICATION ON BASIS OF THE DETAILS SOUG HT FROM THE ASSESSEE DURING THE COURSE OF THE ASSESSMENT PROCEE DINGS AND HAD TAKEN ONE OF THE PERMISSIBLE VIEWS AS PER L AW. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. PR. CIT, UDAIPUR GROSSLY ERRED IN ASSUMING JURI SDICTION MERELY CHANGE OF OPINION BY REAPPRAISING EVIDENCE W HICH IS NOT WITHIN THE PARAMETERS OF REVISIONAL JURISDICTIO N U/S 263 OF THE ACT. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. PR. CIT, UDAIPUR GROSSLY ERRED IN HOLDING THAT THE CASE OF THE ASSESSEE WAS COVERED BY PARA 3.2 OF INSTRUCTION NO. 03/2016 DATED 10.03.2016 ISSUED BY CBDT. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. PR. CIT, UDAIPUR GROSSLY ERRED IN HOLDING THAT NON MAKING REFERENCE TO THE TPO THE ORDER PASSED BY THE LD. AO IS ERRONEOUS AND PREJUDICIAL TO INTEREST OF REVENUE WI THOUT CONSIDERING TRUE & CORRECT FACTS IN RIGHT PERSPECTI VE AND JUDICIAL MANNER. ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 3 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. PR. CIT, UDAIPUR GROSSLY ERRED IN NEGATION THE OVERRIDING PRINCIPLES OF NATURAL JUSTICE WHICH WERE EXPLICITLY REQUIRED TO BE FOLLOWED WHILE EXERCISING THE POWER UNDER SECTIO N 263 OF THE ACT. 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. PR. CIT, UDAIPUR GROSSLY ERRED IN SETTING ASIDE THE ASSESSMENT ORDER PASSED BY THE LD. AO WITHOUT ANY F INDING AS TO HOW THE ASSESSMENT ORDER PASSED BY THE LD. AO IS ERRONEOUS SO AS IT PREJUDICIAL THE INTEREST OF REVE NUE. 8. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. PR. CIT, UDAIPUR GROSSLY ERRED IN RECORDING VAR IOUS FINDINGS IN THE ORDER ARE CONTRARY TO THE MATERIAL AVAILABLE ON RECORD. 9. THAT THE PETITIONER MAY KINDLY BE PERMITTED TO R AISE ANY ADDITIONAL OR ALTERNATIVE GROUNDS AT OR BEFORE THE TIME OF HEARING. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASS ESSMENT FOR THE IMPUGNED ASSESSMENT YEAR WAS COMPLETED U/S 143(3) V IDE ORDER DATED 12.04.2017 AND THEREAFTER, THE LD PCIT ISSUED A SHO W-CAUSE AND PASSED THE ORDER U/S 263 DATED 1.03.2021 SETTING ASIDE THE ASSESSMENT ORDER SO PASSED BY THE AO WITH A DIRECTION TO PASS A FRES H ASSESSMENT ORDER AFTER CONSIDERING THE ISSUED RAISED IN THE IMPUGNED ORDER. AGAINST THE SAID ORDER AND FINDINGS OF THE LD PCIT, THE ASSESSE E IS IN APPEAL BEFORE US. 4. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED THAT THE CASE OF THE ASSESSEE COMPANY WAS SELECTED FOR LIMITED SC RUTINY TO EXAMINE ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 4 LARGE OUTWARD REMITTANCE TO A NON-RESIDENT NOT BEIN G A COMPANY OR A FOREIGN COMPANY (FORM 15CA) AND RECEIPT OF LARGE VA LUE FOREIGN REMITTANCE. IT WAS SUBMITTED THAT THE CASE WAS THER EFORE SELECTED ON NON- TRANSFER PRICING RISK PARAMETERS AS THE CASS R EASON CODE WAS TX 12.01 AND THE SCOPE OF ENQUIRY WAS VERY LIMITED. DU RING THE ASSESSMENT PROCEEDINGS, THE AO HAD RAISED VARIOUS QUERIES AND REQUIRED DOCUMENTARY EVIDENCES FOR VERIFICATION AND EXAMINAT ION. THE ASSESSEE HAD FURNISHED THE DOCUMENTARY EVIDENCES AND EXPLANA TIONS AS REQUIRED BY THE AO. FURTHER, THE ASSESSEE HAS SUBMITTED THE DETAIL SUBMISSION AND OBJECTION FOR REFERENCE TO TPO DURING THE ASSES SMENT PROCEEDINGS BEFORE THE AO. IT WAS SUBMITTED THAT THE AO AFTER M AKING EXTENSIVE ENQUIRY AND VERIFICATION OF THE DOCUMENTARY EVIDENC ES AND EXPLANATIONS FURNISHED BY THE ASSESSEE REACHED THE JUDICIAL CONC LUSION AND ACCEPTED THE RETURNED INCOME AS DECLARED BY THE ASSESSEE. IT WAS SUBMITTED THAT THE AO HAD ALSO FOLLOWED THE GUIDELINES ISSUED BY T HE BOARD IN RESPECT OF SCOPE OF ENQUIRY AND INSTRUCTION NO. 3/2016 DATE D 10/03/2016. 5. THE LD AR DRAWN OUR REFERENCE TO THE SHOW-CAUSE NOTICE DATED 31/12/2020 ISSUED BY THE LD PCIT, UDAIPUR AND THE R ELEVANT CONTENTS THEREOF READ AS UNDER: 4) YOUR CASE FOR A.Y. 2015-16 WAS REQUIRED TO BE R EFERRED TO THE TPO FOR ANOTHER REASON ALSO. THE FACT IS THAT Y OUR CASE FOR THIS YEAR WAS SELECTED FOR COMPLETE SCRUTINY UNDER THE CASS AND ONE OF THE REASONS FOR SELECTION OF YOUR CASE (I.E. AS PER CODE TX 12.01) WAS LARGE OUTWARD REMITTANCES TO A NON-RESID ENT NOT BEING A COMPANY OR TO A FOREIGN COMPANY (FORM 15CA) AND ALSO ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 5 RECEIPT OF LARGE VALUE FOREIGN REMITTANCE. THESE RE ASONS INVOLVE SEVERAL ISSUES I.E. SOURCES OF OUTWARD FOREIGN REMI TTANCE, APPROPRIATE WITHHOLDING AND REPORTING OBLIGATION AN D ALSO INTERNATIONAL TRANSACTIONS WITH YOUR ASSOCIATED ENT ERPRISES. HOWEVER, THE ASSESSMENT CANNOT BE CLOSED BY THE AO IN YOUR CASE FOR ABOVE ASSESSMENT YEAR BY VERIFYING ONLY FE W ISSUES AND BY NOT VERIFYING SOME OTHER ISSUES I.E. INTERNATION AL TRANSACTIONS WITH AES ETC. AS YOUR CASE UNDER THE CASS WAS SELEC TED FOR COMPLETE SCRUTINY AND NOT FOR LIMITED SCRUTINY RELA TED TO ONLY SOME OF THE ISSUES. IN YOUR CASE THE LARGE OUTWARD REMITTANCE INVOLVE THE NATURE OF INTERNATIONAL TRANSACTIONS WI TH YOUR ASSOCIATED ENTERPRISES AND THIS ASPECT COULD BE VER IFIED ONLY BY THE TPO. SINCE THE AO FAILED TO MAKE REFERENCE TO T HE TPO AND THEREFORE, ISSUES RELATED TO NATURE OF INTERNATIONA L TRANSACTION WITH ASSOCIATED ENTERPRISES REMAINED UNVERIFIED DES PITE THE FACT THAT THE VERY BASIS FOR SELECTION OF YOUR CASE WAS FOR COMPLETE SCRUTINY OF LARGE OUTWARD FOREIGN REMITTANCE (TO A NON-RESIDENT NOT BEING A COMPANY OR TO A FOREIGN COMPANY (FORM 1 5CA)) AND RECEIPT OF LARGE VALUE FOREIGN REMITTANCE UNDER THE CASS REASON. THE FAILURE ON THE PART OF THE AO TO MAKE REFERENCE TO THE TPO FOR EXAMINATION OF THESE NATURE OF INTERNATIONAL TR ANSACTIONS WITH ASSOCIATED ENTERPRISES FOR THIS REASON ALSO HAS MAD E THE ASSESSMENT ORDER U/S 143(3) OF THE I.T. ACT ERRONEO US IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. 6. IT WAS SUBMITTED BY THE LD AR THAT THE LD PCIT, UDAIPUR HAS WRONGLY AND INCORRECTLY HELD THE ASSESSMENT ORDER A S ERRONEOUS IN SO ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 6 FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE BOTH FACTUALLY AND LEGALLY AS IT IS ADMITTED FACT THAT THE CASE OF ASS ESSEE WAS SELECTED FOR LIMITED SCRUTINY. FURTHER, THE PARAMETERS ON WHICH THE CASE WAS SELECTED WAS NON TRANSFER PRICING RISK PARAMETER AS THE CODE TX 12.01 IS FOR NON TRANSFER PRICING RISK PARAMETER AND SUCH FA CT WAS WELL AWARE TO THE LD PCIT, UDAIPUR AND AS SUCH THE FACTS NARRATED BY THE LD PCIT IN THE SHOW CAUSE NOTICE ARE NOT ONLY INCORRECT BUT AL SO CONTRARY TO THE BOARD CIRCULAR ETC. IT WAS SUBMITTED THAT DURING TH E ASSESSMENT PROCEEDINGS, THE LD AO AFTER DUE APPLICATION OF MIN D ON THE EXPLANATION AND LEGAL & VALID DOCUMENTARY EVIDENCES HAS TAKEN A JUDICIAL VIEW WHICH IS NOT ONLY IN ACCORDANCE WITH INSTRUCTION/ GUIDELI NES ISSUED BY THE CBDT BUT ALSO IN ACCORDANCE WITH PROVISIONS OF THE LAW AND AS SUCH THE NOTICE ISSUED BY THE LD PCIT IS BAD IN LAW AND DESE RVES TO BE QUASHED. 7. IT WAS FURTHER SUBMITTED THAT DURING THE COURSE OF PROCEEDINGS U/S 263 OF THE ACT, THE ASSESSEE HAD SUBMITTED THAT THE REASONS FOR SCRUTINY SELECTION UNDER CASS SHOWS THAT NEITHER TH E CASE OF THE ASSESSEE HAS BEEN SELECTED ON THE BASIS OF TRANSFER PRICING RISK PARAMETERS NOR THE REASONS FOR SELECTION FALL UNDER THE AFOREMENTIONED SECOND CONDITION STIPULATED UNDER THE SAID INSTRUCT ION AND THEREFORE, IT WAS NOT MANDATORY FOR THE AO TO REFER THE TRANSACTI ONS TO THE TPO. FURTHER, THE LD PCIT HAD NOT BEEN RECORDED ANY FIND ING THAT THE CONDITIONS MENTIONED IN THE SAID GUIDELINE FOR MAND ATORY REFERENCE BY THE AO WHICH SHOULD HAVE BEEN MADE TO THE TPO HAS B EEN VIOLATED. IN FACT, THE AO HAS HIMSELF EXAMINED THE ENTIRE REPORT AND TRANSFER PRICING DOCUMENTATION AND HAVING SATISFIED WITH SUCH DOCUME NTS, AND HENCE ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 7 THERE WAS NO REQUIREMENT FOR REFERRING IT TO THE TP O. THUS, NO ERROR HAS BEEN COMMITTED BY THE AO FOR NOT MAKING THE REFEREN CE TO THE TPO. 8. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAD CATEGORICALLY SUBMITTED AND ALSO FROM THE RECORD, IT IS ESTABLISH ED THAT THE CASE WAS SELECTED FOR LIMITED SCRUTINY. HOWEVER THE LD PCIT HAD MENTIONED THAT THE CASE WAS SELECTED FOR COMPLETE SCRUTINY. FURTHE R ALSO THE LD PCIT ON THE BASIS OF DOCUMENTARY EVIDENCES AND EXPLANATIONS FURNISHED BEFORE THE AO AS WELL AS BEFORE HIM MADE ARBITRARILY OBSER VATION WHICH IS NOT BORN OUT FROM THE REASON AND PARAMETER OF THE SELEC TION OF THE CASE. THE ISSUE IN WHICH THE CASE WAS SELECTED WAS DULY V ERIFIED AND EXAMINED IN LIGHT OF GUIDELINES OF CBDT AND AS SUCH THE OBSERVATION MADE IS TOTALLY IRRELEVANT. 9. IT WAS FURTHER SUBMITTED THAT THE LD PCIT HAD AL SO RECORDED VARIOUS OBSERVATIONS THAT THE CASE WAS SELECTED FOR TRANSFER PRICING RISK PARAMETER WHICH IS WITHOUT ANY BASIS OR EVIDENCE. I T WAS SUBMITTED THAT THE CODE ASSIGNED TO THE AO BY THE CBDT FOR SCOPE O F ENQUIRY IS RELEVANT TO NON TRANSFER PRICING RISK PARAMETERS AN D AS SUCH THE OBSERVATION MADE BY THE LD PCIT IS APPARENTLY NOT C ORRECT. IT WAS FURTHER EXPLAINED THAT FORM NO 15CA IS FOR REPORTIN G THE FOREIGN REMITTANCE AND IT MAY BE TO AE OR TO ANYONE ELSE, A ND IT CANNOT BE LINKED WITH TRANSFER PRICING RISK PARAMETERS. 10. IT WAS FURTHER SUBMITTED THAT THE LD PCIT HAD A RBITRARILY INTERPRETED THE BOARD INSTRUCTION BEARING NO. 3/201 6 DATED 10/03/2016. THE INSTRUCTIONS OF THE CBDT CONTAINED IN PARAS 3.2 TO 3.3 OF INSTRUCTION NO.3/2016 DATED 10/03/2016 WHEREIN THE BOARD HAVE S ET OUT THE ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 8 FOLLOWING SPECIFIC SITUATIONS/INSTANCES WHERE THE R EFERENCE TO TPO HAS BEEN MADE MANDATORY: S.NO SITUATION ACTION OF THE ASSESSING OFFICER 1 WHERE THE CASE IS SELECTED FOR SCRUTINY EITHER UNDER CASS OR COMPULSORY MANUAL SELECTION ON THE BASIS OF TRANSFER PRICING RISK PARAMETER REFERENCE TO THE TPO IS MANDATOR Y 2 WHERE THE CASE IS SELECTED FOR SCRUTINY ON NON-TRANSFER PRICING RISK PARAMETER REFERENCE SHALL BE MADE TO THE TPO ONLY IN THE FOLLOWING THREE CASES: A. FAILURE TO REPORT: AO COMES TO KNOW THAT THE ASSESSE HAS ENTERED INTO INTERNATIONAL TRANSACTION AND / OR SDT BUT HAS NOT FILED FORM 3CEB OR HAS NOT DISCLOSED THE SAME IN THE REPORT; OR B. QUANTUM OF PREVIOUS ADJUSTMENT: IF THERE HAS BEEN A TP ADJUSTMENT OF RS. 10 CRORE OR MORE IN ANY PREVIOUS ASSESSMENT YEARS WHICH IS UPHELD BY JUDICIAL AUTHORITIES OR PENDING IN APPEAL; OR C. SEARCH / SEIZURE CASE: WHERE SEARCH OR SURVEY OPERATION HAS BEEN CARRIED OUT AND FINDINGS ON THE TP ISSUES ARE RECORDED BY AO OR THE INVESTIGATION WING 3 CASES INVOLVING TP ADJUSTMENT IN EARLIER ASSESSMENT YEARS THAT HAS BEEN SET ASIDE BY THE ITAT, HIGH COURT OR SUPREME REFERENCE TO THE TPO IS MANDATORY ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 9 COURT ON THE ISSUE OF SAID ADJUSTMENT 11. IT WAS ACCORDINGLY SUBMITTED THAT AS PER THE C BDT INSTRUCTION, ALL CASES SELECTED FOR SCRUTINY, EITHER UNDER THE COMPU TER ASSISTED SCRUTINY SELECTION [CASS] SYSTEM OR UNDER THE COMPULSORY MAN UAL SELECTION SYSTEM (IN ACCORDANCE WITH THE CBDT'S ANNUAL INSTRU CTIONS IN THIS REGARD -FOR EXAMPLE, INSTRUCTION NO. 6/2014 FOR SELECTION IN F.Y 2014-15 AND INSTRUCTION NO. 8/2015 FOR SELECTION IN F.Y 2015-16 ), ON THE BASIS OF TRANSFER PRICING RISK PARAMETERS [IN RESPECT OF INT ERNATIONAL TRANSACTIONS OR SPECIFIED DOMESTIC TRANSACTIONS OR BOTH] HAVE TO BE REFERRED TO THE TPO BY THE AO, AFTER OBTAINING THE APPROVAL OF THE JURISDICTIONAL PRINCIPAL COMMISSIONER OF INCOME-TAX (PCIT) OR COMM ISSIONER OF INCOME-TAX (CIT). THE FACT THAT A CASE HAS BEEN SEL ECTED FOR SCRUTINY ON A TP RISK PARAMETER BECOMES CLEAR FROM A PERUSAL OF THE REASONS FOR WHICH A PARTICULAR CASE HAS BEEN SELECTED AND THE S AME ARE INVARIABLY AVAILABLE WITH THE JURISDICTIONAL AO. THUS, IF THE REASON OR ONE OF THE REASONS FOR SELECTION OF A CASE FOR SCRUTINY IS A T P RISK PARAMETER, THEN THE CASE HAS TO BE MANDATORILY REFERRED TO THE TPO BY THE AO, AFTER OBTAINING THE APPROVAL OF THE JURISDICTIONAL PCIT O R CIT. IN RESPECT OF CASES SELECTED FOR SCRUTINY ON NON-TRANSFER PRICING RISK PARAMETERS BUT ALSO HAVING INTERNATIONAL TRANSACTIONS OR SPECIFIED DOMESTIC TRANSACTIONS, THE SAME SHALL BE REFERRED TO TPOS ONLY IN THE ABOV E CIRCUMSTANCES AS DISCUSSED IN TABLE ABOVE. 12. IT WAS SUBMITTED THAT WHERE SUCH CONDITIONS WER E NOT APPLICABLE IN THE CASE OF ASSESSEE AND THE LD. PCIT HAS ALSO N OT SPECIFIED AS TO ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 10 WHICH OF THE CONDITIONS LAID DOWN IN THE CBDT INSTR UCTIONS HAVE BEEN VIOLATED OR ASSESSING OFFICER HAS NOT FOLLOWED THE SAME, THEN NO FAULT CAN BE FOUND IN THE AOS OPINION IN NOT MAKING REFE RENCE TO THE TPO FOR THE SPECIFIED DOMESTIC TRANSACTION. IT WAS SUBMITTE D THAT CBDT INSTRUCTIONS HAVE BEEN ISSUED TO THE FIELD OFFICERS TO CURB AND CHECK THE BLANKET REFERENCE BEING MADE BY THE ASSESSING OFFIC ERS TO THE TPOS WITHOUT ANY SATISFACTION AND IN A MECHANICAL MANNER . THE CBDT HAS THUS CAUTIONED THAT REFERENCE TO THE TPO CANNOT BE DONE IN MECHANICAL MANNER WHENEVER THERE IS ANY INTERNATIONAL TRANSACT ION OR SPECIFYING DOMESTIC TRANSACTION. IF ALL THE REQUISITE DETAILS AND ACCOUNTANTS REPORT HAS BEEN FILED AND ASSESSING OFFICER WAS SATISFIED WITH SUCH REPORT, THEN HE IS NOT SUPPOSED TO MAKE A REFERENCE TO THE TPO U NLESS THE CONDITIONS SPECIFIED FOR MAKING REFERENCE HAS BEEN SATISFIED. 13. IT WAS SUBMITTED THAT IT IS AN UNDISPUTED FACT THAT THE REASON ASSIGNED FOR SELECTION OF SCRUTINY AND CODE PROVIDE D AS DISCUSSED HEREINABOVE WHICH CONCLUSIVELY PROVES THAT THE CASE WAS SELECTED FOR NON TP RISK PARAMETER AND AS SUCH THE LD AO AFTER M AKING JUDICIAL ENQUIRY WHICH IS BORN OUT FROM THE ASSESSMENT RECOR D AND AS SUCH THE ALLEGATION MADE BY THE PCIT THAT IT IS MANDATORY FO R AO TO REFER TO TPO IS APPARENTLY INCORRECT AND ALSO CONTRARY TO THE BO ARDS INSTRUCTION. FROM THE OBSERVATION MADE BY THE PCIT, IT IS NOT SP ECIFIED BY THE PCIT UNDER WHICH CONDITION OF INSTRUCTION NO. 3 /2016, T HE AO SHOULD HAVE REFERRED TO TPO IN THE ORDER. IN SUPPORT OF HIS CON TENTIONS, THE LD AR HAS PLACED RELIANCE ON THE FOLLOWING DECISIONS:- M/S AMIRA PURE FOODS PVT. LTD VS. PCIT, CENTRAL, GU RGAON (ITA NO. 3205/DEL/2017 DATED 29.11.2017) ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 11 EVEREADY INDUSTRIES INDIA LTD VS. PCIT (ITA NO. 805/KOL/2019 DATED 13.12.2019) AIC IRON INDUSTRIES PVT. LTD. VS. PCIT-1, KOLKATA (ITA NO.1332/KOL/2019 DATED 31.12.2019) 14. IT WAS FURTHER SUBMITTED THAT IN THE CASE OF AS SESSEE, THE AO HAD MADE EXTENSIVE AND JUDICIAL ENQUIRY AND ALSO RESPEC TFULLY FOLLOWED THE GUIDELINES ISSUED BY THE BOARD. THEREFORE IT IS EST ABLISHED BEYOND DOUBT THAT THE LD PCIT IN HIS ORDER U/S 263 HAD EXCEEDED THE JURISDICTION BY HOLDING THE ORDER OF AO AS ERRONEOUS IN SO FAR AS P REJUDICIAL TO THE INTEREST OF REVENUE ON THOSE ITEMS WHICH ARE NOT EM ANATING FROM THE REASONS FOR LIMITED SCRUTINY. IN SUPPORT, RELIANCE WAS PLACED ON FOLLOWING DECISIONS:- MAHENDRA SINGH DHANKHAR (HUF) VS. ACIT (2021) 35 NY PTTJ 458 (JP) M/S. STOREWELL CONSTRUCTION & ENGINEERS VS. PR. CIT (ITA NO 768/PUN/2019 DATED 05.12.2019) RAKESH KHANDELWAL VS. CIT (ITA NO.204/IND/2019 DATED 29.01.2020) CIT VS. M/S GREEN TRIVENI DEVELOPER (D.B. INCOME TAX APPEAL NO. 114 / 2015 DATED 24/10/2017) IT WAS ACCORDINGLY SUBMITTED THAT THE ORDER PASSED BY LD PCIT MAY KINDLY BE QUASHED AND SET-ASIDE. 15. PER CONTRA, THE LD. CIT/DR SUBMITTED THAT THE C ASE OF THE ASSESSEE WAS SELECTED FOR COMPLETE SCRUTINY THROUGH CASS AND THE RELEVANT CASS REASON WAS LARGE OUTWARD REMITTANCE T O A NON-RESIDENT ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 12 NOT BEING A COMPANY OR A FOREIGN COMPANY (FORM 15CA ). IT WAS SUBMITTED THAT THE CASE OF THE ASSESSEE WAS SELECTE D BECAUSE OF LARGE OUTWARD REMITTANCE TO A NON-RESIDENT NOT BEING A CO MPANY OR A FOREIGN COMPANY AND THIS LARGE OUTWARD FOREIGN REMITTANCE I NVOLVED INTERNATIONAL TRANSACTIONS AS MENTIONED IN FORM 15C A. WHEN FORM 15CA IS REFERRED IN THE REASONS FOR SELECTION, THEN IT IS REQUIRED TO VERIFY/ EXAMINE THE ISSUE REGARDING EXAMINATION OF INTERNATIONAL TRANSACTIONS WITH AES. THIS IS MORE PARTICULARLY IN VIEW OF THE FACT THAT THE CASE OF THE ASSESSEE WAS SELECTED FOR COMPLETE SCRUTINY OF THIS PARTICULAR ISSUE I.E. LARGE OUTWARD FOREIGN REMITTA NCE TO A NON-RESIDENT NOT BEING A COMPANY OR A FOREIGN COMPANY (FORM 15CA ) WAS ONE OF THE REASONS MENTIONED IN THE CASS FOR SCRUTINY. THIS IN TERNATIONAL TRANSACTIONS ON ACCOUNT OF LARGE OUTWARD REMITTANCE INVOLVED TRANSACTIONS OF RS. 44.79 CRORES WITH THE ASSOCIATE D ENTERPRISES WHICH IS EVIDENT FROM THE FORM 3CEB AND THE AO DID NOT MAKE REFERENCE TO THE TPO IN RESPECT OF TRANSACTIONS MADE WITH AES FOR CO MPUTATION OF ARM'S LENGTH PRICE DESPITE THE FACT THAT LARGE OUTWARD RE MITTANCE WHICH WAS ONE OF THE REASONS FOR SELECTION OF CASE UNDER THE CODE TX-12.01 INVOLVING THE INTERNATIONAL TRANSACTIONS AND THESE INTERNATIONAL TRANSACTIONS WITH AES REMAINED UNVERIFIED. 16. IT WAS SUBMITTED THAT AS PER THE LD AR, IT IS S TATED IN REVISION NOTICE U/S 263 THAT THIS CASE WAS SELECTED FOR COMP LETE SCRUTINY AND NOT FOR A LIMITED SCRUTINY RELATING TO ONLY SOME OF THE ISSUES, SO THE ASSESSMENT CANNOT BE CLOSED BY THE AO ONLY VERIFYIN G THE FEW ISSUES. IT WAS SUBMITTED BY THE LD AR THAT THE ASSESSEES CASE WAS SELECTED FOR LIMITED SCRUTINY ONLY AND LIMITED ISSUES WERE COMPL ETELY VERIFIED BY THE ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 13 AO. BUT THIS PLEA OF THE ASSESSEE CANNOT BE ACCEPTE D. IT WAS SUBMITTED THAT EVEN IF THE CASE OF THE ASSESSEE WAS SELECTED FOR LIMITED SCRUTINY, THEN ALSO, THIS PARTICULAR REASON I.E. LARGE OUTWAR DS REMITTANCES TO A NON RESIDENT NOT BEING A COMPANY OR TO A FOREIGN COMPAN Y (FORM-15CA) WAS MENTIONED AS REASON IN THE CASS AND THIS PARTIC ULAR ISSUE REQUIRED COMPLETE VERIFICATION/ EXAMINATION OF THE ASPECTS R ELATED TO IT AND THIS IS NOT THAT ONLY FEW ASPECTS OF THIS ISSUE ARE REQUIRE D TO BE VERIFIED AND THE ASPECTS RELATED TO INTERNATIONAL TRANSACTIONS W ITH AES ARE NOT REQUIRED TO BE VERIFIED. 17. IT WAS FURTHER SUBMITTED THAT THE CASE OF THE A SSESSEE WAS SELECTED TO EXAMINE THE LARGE OUTWARDS REMITTANCE A ND THIS VALUE OF TRANSACTION OF RS. 44.79 CRORES INVOLVED TP RISK PA RAMETERS BECAUSE OF THE FACT THAT TRANSACTIONS WERE MADE BY THE ASSESSE E WITH ITS ASSOCIATED ENTERPRISES AND HENCE THE AO WAS REQUIRED TO REFER TO THE TPO TO COMPUTE ARM'S LENGTH PRICE IN RESPECT OF SUCH TRANS ACTIONS AS ENTERED INTO BY THE ASSESSEE WITH ITS ASSOCIATED ENTERPRISE S AS PARA NO. 3.2 OF THE INSTRUCTION NO. 3/2016 DATED 10.03.2016 SAYS TH AT ALL CASES SELECTED FOR SCRUTINY, UNDER THE COMPUTER ASSISTED SCRUTINY SELECTION [CASS] SYSTEM OR UNDER THE COMPULSORY MANUAL SELECT ION SYSTEM ON THE BASIS OF TRANSFER PRICING RISK PARAMETERS IN RESPEC T OF INTERNATIONAL TRANSACTIONS OR SPECIFIED DOMESTIC TRANSACTIONS OR BOTH HAVE TO BE REFERRED TO THE TPO BY THE AO. SINCE THERE WAS TP R ISK PARAMETER IN INTERNATIONAL TRANSACTIONS WITH THE AES BECAUSE OF OUTWARD REMITTANCE AND HENCE SUCH INTERNATIONAL TRANSACTIONS WITH THE AES WERE REQUIRED TO BE REFERRED TO THE TPO FOR COMPUTATION OF ARM'S LEN GTH PRICE BY THE AO WHICH HE HAS FAILED TO DO. ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 14 18. IT WAS SUBMITTED THAT AS STATED EARLIER, ONE OF THE CASS REASONS IS LARGE OUTWARD FOREIGN REMITTANCE (UNDER THE CODE TX12.01) WHICH IS RELATED TO INTERNATIONAL TRANSACTIONS. FURTHER, ANO THER REASON IN THE CASS IS RECEIPT OF LARGE VALUE FOREIGN REMITTANCE. THIS SCRUTINY REASONS INDICATE INTERNATIONAL TRANSACTIONS WHICH HAVE BEAR ING ON TP RISK PARAMETER. IN THIS SITUATION, THE AO SHOULD HAVE VE RIFIED THE FORM 3CEB FOR ALL THE INTERNATIONAL TRANSACTIONS OF RS. 44.79 CRORES MENTIONED IN IT AND THE TP RISK INVOLVED IN ALL THE INTERNATIONAL T RANSACTIONS WITH AES SHOULD HAVE BEEN REFERRED TO TPO AFTER OBTAINING TH E APPROVAL FROM THE CONCERNED/ JURISDICTIONAL PR. CIT/ CIT AS PER PARA 3.2 OF THE INSTRUCTION NO. 03/2016 DATED 10.03.2016. THIS IS IN VIEW OF TH E FACT THAT PARA 3.6 SAYS THAT 'SINCE INTERNATIONAL TRANSACTIONS MAY BE BENCHMARKED TOGETHER AT THE ENTITY LEVEL DUE TO THE INTER-LINKA GES AMONGST THEM, IF A CASE HAS BEEN SELECTED FOR SCRUTINY ON A TP RISK PA RAMETER PERTAINING TO ONE OR MORE INTERNATIONAL TRANSACTIONS, THEN ALL TH E INTERNATIONAL TRANSACTIONS ENTERED INTO BY THE TAXPAYER EXCEPT THOSE ABOUT WHICH THE AO HAS DECIDED NOT TO MAKE REFERENCE AS PER PAR AGRAPH 3.4 SHALL BE REFERRED TO THE TPO.' AS MENTIONED ABOVE THAT TH E ISSUE I.E. LARGE OUTWARD FOREIGN REMITTANCE TO A NON-RESIDENT OR TO A FOREIGN COMPANY AND ALSO RECEIPT OF LARGE VALUE FOREIGN REMITTANCE WHICH WERE THE REASON FOR SELECTION OF THE CASE OF THE ASSESSEE FO R SCRUTINY INVOLVES TP RISK PARAMETER AND HENCE IN VIEW OF ABOVE PARA NO. 3.6 OF INSTRUCTION NO. 03/2016 DATED 10.03.2016, IT WAS REQUIRED TO BE BENCHMARKED TOGETHER AT ENTITY LEVEL DUE TO THE INTER-LINKAGE A MONGST INTERNATIONAL TRANSACTIONS AND ACCORDINGLY REFERENCE OF SUCH INTE RNATIONAL TRANSACTIONS WERE REQUIRED TO BE MADE BY THE AO TO THE TPO FOR COMPUTATION OF ARM'S LENGTH PRICE. HOWEVER, THIS FA ILURE ON THE PART OF ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 15 THE AO WITH REGARD TO NON MAKING OF REFERENCE TO TH E TPO OF THIS INTERNATIONAL TRANSACTIONS OF RS. 44.79 CRORES AS M ENTIONED IN FORM 3CEB HAS RENDERED THE ASSESSMENT ORDER U/S 143(3) O F THE I.T. ACT FOR A.Y. 2015-16 ERRONEOUS AND PREJUDICIAL TO THE INTER EST OF REVENUE. CONSIDERING ALL THESE FACTS AND IN VIEW OF PARA 3.2 AND PARA 3.6 OF INSTRUCTION NO. 3/2016 DATED 10.03.2016, THE AO WAS RIGHTLY DIRECTED TO MAKE REFERENCE TO THE TPO FOR COMPUTATION OF ARM'S LENGTH PRICE IN RESPECT OF INTERNATIONAL TRANSACTIONS OF RS. 44.79 CRORES WITH AES AFTER OBTAINING THE APPROVAL FROM THE CONCERNED/ JURISDIC TIONAL CIT/ PCIT AS REQUIRED U/S 92CA OF THE I.T. ACT AND OBTAIN THE RE PORT FROM THE TPO AND IN CASE IF ANY ADJUSTMENT/ ADDITION IS REQUIRED TO BE MADE TO THE TOTAL INCOME OF THE ASSESSEE ON THE BASIS OF REPORT OF THE TPO, THEN THE AO IS DIRECTED TO MAKE SUCH ADJUSTMENT OR ADDITION TO THE TOTAL INCOME OF THE ASSESSEE IN ACCORDANCE WITH THE PROVISIONS O F INCOME TAX ACT AND INCOME TAX RULES BY PASSING THE FRESH ASSESSMEN T ORDER U/S 143(3) OF THE I.T. ACT FOR A.Y. 2015-16. IT WAS ACC ORDINGLY SUBMITTED THAT THE ORDER U/S 143(3) IN THE CASE OF ASSESSEE W AS RIGHTLY HELD TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT EREST OF REVENUE ON ACCOUNT OF NON-REFERENCE TO THE TPO AND THEREFORE S UCH ASSESSMENT ORDER U/S 143(3) WAS RIGHTLY SET-ASIDE BY THE LD PC IT AND THERE IS THUS NO INFIRMITY IN THE ORDER SO PASSED BY THE LD PCIT AND THE SAME SHOULD BE UPHELD AND THE APPEAL OF THE ASSESSEE BE DISMISS ED. 19. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE POWER TO DETERMINE THE AR M'S LENGTH PRICE (ALP) IN AN INTERNATIONAL TRANSACTION OR SPECIFIED DOMESTIC TRANSACTION IS CONTAINED IN SUB-SECTION (3) OF SECTION 92C OF THE ACT WHICH EMPOWERS ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 16 THE ASSESSING OFFICER TO DETERMINE THE ALP OF THE I NTERNATIONAL TRANSACTION/SPECIFIED DOMESTIC TRANSACTION IN ACCOR DANCE WITH SUB- SECTIONS (1) AND (2). HOWEVER, SECTION 92CA(1) PROV IDES THAT WHERE THE ASSESSING OFFICER CONSIDERS IT NECESSARY OR EXPEDIE NT TO DO SO, HE MAY REFER THE COMPUTATION OF ALP IN RELATION TO AN INTE RNATIONAL TRANSACTION OR SPECIFIED DOMESTIC TRANSACTION TO THE TPO. IT HA S BEEN STATED IN THE INSTRUCTION NO. 3/2016 DATED 10.03.2016 REPLACING E ARLIER INSTRUCTION NO. 15/2015 DATED 16TH OCTOBER, 2015 THAT FOR PROPE R ADMINISTRATION OF THE INCOME-TAX ACT, THE BOARD HAS DECIDED THAT THE AO SHALL HENCEFORTH MAKE A REFERENCE TO THE TPO ONLY UNDER THE CIRCUMST ANCES LAID OUT IN THE AFORESAID INSTRUCTION. 20. THE INSTRUCTION OF 2016 PROVIDES FOR MAINLY TWO CATEGORIES OF CASES IN WHICH REFERENCE CAN BE MADE BY THE AO TO T HE TPO FOR THE ALP DETERMINATION. THE FIRST CATEGORY CONSISTS OF THE C ASES THAT ARE SELECTED FOR SCRUTINY ON THE BASIS OF 'TRANSFER PRICING RISK PARAMETERS' AND SECOND CATEGORY COMPRISES OF CASES THAT ARE SELECTE D FOR SCRUTINY ON THE BASIS OF 'NON TRANSFER PRICING RISK PARAMETERS'. IT HAS BEEN STATED THAT ALL CASES SELECTED FOR SCRUTINY, EITHER UNDER THE C ASS SYSTEM OR UNDER THE COMPULSORY MANUAL SELECTION SYSTEM ON THE BASIS OF TRANSFER PRICING RISK PARAMETERS IN RESPECT OF INTERNATIONAL TRANSAC TIONS OR SPECIFIED DOMESTIC TRANSACTIONS OR BOTH HAVE TO BE REFERRED T O THE TPO BY THE AO, AFTER OBTAINING THE APPROVAL OF THE LD PCIT OR LD C IT. IT HAS BEEN FURTHER STATED THAT CASES SELECTED FOR SCRUTINY ON NON-TRAN SFER PRICING RISK PARAMETERS BUT ALSO HAVING INTERNATIONAL TRANSACTIO NS OR SPECIFIED DOMESTIC TRANSACTIONS, SHALL BE REFERRED TO TPOS ON LY IN THE FOLLOWING CIRCUMSTANCES NAMELY, WHERE THE AO COMES TO KNOW TH AT THE TAXPAYER ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 17 HAS ENTERED INTO INTERNATIONAL TRANSACTIONS OR SPEC IFIED DOMESTIC TRANSACTIONS OR BOTH BUT THE TAXPAYER HAS EITHER NO T FILED THE ACCOUNTANT'S REPORT UNDER SECTION 92E AT ALL OR HAS NOT DISCLOSED THE SAID TRANSACTIONS IN THE ACCOUNTANT'S REPORT FILED; WHERE THERE HAS BEEN A TRANSFER PRICING ADJUSTMENT OF RS. 10 CRORE OR MO RE IN AN EARLIER ASSESSMENT YEAR AND SUCH ADJUSTMENT HAS BEEN UPHELD BY THE JUDICIAL AUTHORITIES OR IS PENDING IN APPEAL; WHERE SEARCH A ND SEIZURE OR SURVEY OPERATIONS HAVE BEEN CARRIED OUT UNDER THE PROVISIO NS OF THE INCOME- TAX ACT AND FINDINGS REGARDING TRANSFER PRICING ISS UES IN RESPECT OF INTERNATIONAL TRANSACTIONS OR SPECIFIED DOMESTIC TR ANSACTIONS OR BOTH HAVE BEEN RECORDED BY THE INVESTIGATION WING OR THE AO; OR A CASE INVOLVING A TRANSFER PRICING ADJUSTMENT IN AN EARLI ER ASSESSMENT YEAR THAT HAS BEEN FULLY OR PARTIALLY SET-ASIDE BY THE I TAT, HIGH COURT OR SUPREME COURT ON THE ISSUE OF THE SAID ADJUSTMENT S HALL INVARIABLY BE REFERRED TO THE TPO FOR DETERMINATION OF THE ALP. 21. IT HAS BEEN FURTHER PROVIDED IN THE AFORESAID I NSTRUCTION THAT IN ALL THESE CASES WHERE REFERENCE TO TPO IS REQUIRED TO B E MADE, THE AO MUST, AS A JURISDICTIONAL REQUIREMENT, RECORD HIS S ATISFACTION, AFTER PROVIDING AN OPPORTUNITY TO THE ASSESSEE AND DISPOS ING OFF OBJECTIONS IF ANY BY WAY OF SPEAKING ORDER, THAT THERE IS AN INCO ME OR A POTENTIAL OF AN INCOME ARISING AND/OR BEING AFFECTED ON DETERMIN ATION OF THE ALP OF AN INTERNATIONAL TRANSACTION OR SPECIFIED DOMESTIC TRANSACTION BEFORE SEEKING APPROVAL OF THE PCIT OR CIT TO REFER THE MA TTER TO THE TPO FOR DETERMINATION OF THE ALP. ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 18 22. IT HAS BEEN FURTHER PROVIDED IN THE AFORESAID I NSTRUCTION THAT FOR ADMINISTERING THE TRANSFER PRICING REGIME IN AN EFF ICIENT MANNER, THOUGH AO HAS THE POWER UNDER SECTION 92C TO DETERMINE THE ALP OF INTERNATIONAL TRANSACTIONS OR SPECIFIED DOMESTIC TR ANSACTIONS, DETERMINATION OF ALP SHOULD NOT BE CARRIED OUT AT A LL BY THE AO IN A CASE WHERE REFERENCE IS NOT MADE TO THE TPO. HOWEVE R, IN SUCH CASES, THE AO MUST RECORD IN THE BODY OF THE ASSESSMENT OR DER THAT DUE TO THE BOARD'S INSTRUCTION ON THIS MATTER, THE TRANSFER PR ICING ISSUE HAS NOT BEEN EXAMINED AT ALL. 23. IN LIGHT OF AFORESAID CBDT INSTRUCTION WHICH IS BINDING ON THE ASSESSING OFFICER, THE QUESTION THAT ARISES FOR CON SIDERATION IS WHETHER THE ASSESSING OFFICER HAS ERRED IN NOT REFERRING TH E MATTER TO THE TPO FOR DETERMINATION OF THE ALP OF INTERNATIONAL TRANS ACTION AND THEREFORE, THE LD PCIT WAS RIGHT IN HOLDING THE ASSESSMENT ORD ER SO PASSED AS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE. 24. IN THE INSTANT CASE, WHAT THEREFORE, NEEDS TO B E DETERMINED IS WHETHER THE CASE HAS BEEN SELECTED ON THE BASIS OF TP RISK PARAMETERS OR ON THE BASIS OF 'NON TRANSFER PRICIN G RISK PARAMETERS'. THE FACT THAT A CASE HAS BEEN SELECTED FOR SCRUTINY ON A TP RISK PARAMETER BECOMES CLEAR FROM THE DESCRIPTION OF THE REASONS FOR WHICH THE CASE HAS BEEN SELECTED. THUS, IF THE REASON OR ONE OF THE REASONS FOR SELECTION OF A CASE FOR SCRUTINY IS A TP RISK P ARAMETER, THEN THE CASE HAS TO BE MANDATORILY REFERRED TO THE TPO BY THE AO , AFTER OBTAINING THE APPROVAL OF THE LD PCIT OR LD CIT. IN CASE WHER E IT IS SELECTED ON THE BASIS OF 'NON TRANSFER PRICING RISK PARAMETERS', TH E AO HAS TO DECIDE ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 19 TAKING INTO CONSIDERATION THE FACTS OF THE CASE AND THE AFORESAID CBDT INSTRUCTION NO. 3/2016 AS TO WHETHER THE MATTER NEE DS TO BE REFERRED TO THE TPO FOR DETERMINATION OF THE ALP OF INTERNATION AL TRANSACTIONS. THAT IS, WHERE IT IS HELD THAT THE CASE OF THE ASSESSEE WAS SELECTED ON BASIS OF NON-TRANSFER PRICING RISK PARAMETERS, WHAT NEEDS TO BE DETERMINED IS WHETHER THE CASE OF THE ASSESSEE FALLS UNDER ANY OF THE SITUATIONS/CIRCUMSTANCES AS SO SPECIFIED IN THE INS TRUCTION NO. 3/2016 WHICH REQUIRE THE AO TO REFER THE MATTER TO THE TPO AFTER SEEKING APPROVALS FROM THE APPROPRIATE AUTHORITY. 25. THE CONTENTIONS ADVANCED ON BEHALF OF THE ASSE SSEE IS THAT THE CASE WAS SELECTED FOR LIMITED SCRUTINY TO EXAMINE L ARGE VALUE REMITTANCE TO NON-RESIDENT NOT BEING A COMPANY OR A FOREIGN CO MPANY (FORM 15CA) AND THE CODE USED FOR SUCH SELECTION WAS TX 1 2.01. IT WAS SUBMITTED THAT THE SAID PARAMETER ON WHICH THE CASE WAS SELECTED WAS NON-TRANSFER PRICING PARAMETER AS THE CODE USED FOR SELECTION OF CASES FOR TRANSFER PRICING RISK PARAMETER IS TP10.03 AND WHICH IS DIFFERENT FROM THE CODE TX 12.01 USED IN THE INSTANT CASE AND SECONDLY, THERE IS NO NARRATION/MENTION OF TRANSFER PRICING RISK PARAM ETER ON PERUSAL OF THE REASONS SO RECORDED FOR SELECTION OF CASE. IT WAS FURTHER SUBMITTED THAT FORM 15CA IS FOR REPORTING OF TRANSACTIONS REL ATING TO FOREIGN REMITTANCE AND SUCH REMITTANCE MAY BE TO ASSOCIATED ENTERPRISES OR NON-ASSOCIATED ENTERPRISES AND THEREFORE, MERE SELE CTION OF TRANSACTIONS FOR EXAMINATION AS REPORTED IN FORM 15CA CANNOT BE LINKED WITH TRANSFER PRICING RISK PARAMETERS WHICH IS RESTRICTE D TO TRANSACTIONS WITH ASSOCIATED ENTERPRISES. ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 20 26. IT HAS BEEN FURTHER SUBMITTED ON BEHALF OF THE ASSESSEE THAT THE CASE OF THE ASSESSEE DOESNT FALLS UNDER ANY OF THE SITUATIONS/CIRCUMSTANCES AS SO SPECIFIED IN THE INS TRUCTION NO. 3/2016 WHICH REQUIRE THE AO TO REFER THE MATTER TO THE TPO AND IN THIS REGARD, THE AO HAS DULY EXAMINED THE MATTER AND HAS CALLED FOR INFORMATION/DOCUMENTATION FROM THE ASSESSEE AND AFT ER BEING SATISFIED THAT THE CASE OF THE ASSESSEE DOESNT FALLS UNDER A NY OF THE SITUATIONS/CIRCUMSTANCES AS SO SPECIFIED IN THE INS TRUCTION NO. 3/2016, HAS NOT REFERRED THE MATTER TO THE TPO. IT WAS SUBM ITTED THAT THE LD PCIT HAS NOT SPECIFIED AS TO WHICH OF THE CONDITION S LAID DOWN IN THE CBDT INSTRUCTION HAVE BEEN VIOLATED OR HAS NOT BEEN FOLLOWED BY THE AO. IT WAS SUBMITTED THAT WHERE THE AO HAS FOLLOWE D THE BINDING INSTRUCTION NO. 3/2016 ISSUED BY THE CBDT AND HAS T AKEN A DECISION NOT TO REFER THE MATTER TO THE TPO, NO ERROR HAS BEEN C OMMITTED BY THE AO. 27. ON THE OTHER HAND, THE CONTENTIONS ADVANCED O N BEHALF OF THE REVENUE IS THAT THE CASE OF THE ASSESSEE WAS SELECT ED FOR COMPLETE SCRUTINY THROUGH CASS AND ONE OF REASONS WAS LARGE OUTWARD FOREIGN REMITTANCE (UNDER THE CODE TX12.01) AS MENTIONED IN FORM 15CA WHICH IS RELATED TO INTERNATIONAL TRANSACTIONS OF R S 44.79 CRORES INVOLVING TP RISK PARAMETER AS THE TRANSACTIONS WER E MADE BY THE ASSESSEE WITH ITS ASSOCIATED ENTERPRISES. IN THIS S ITUATION, THE AO SHOULD HAVE VERIFIED FORM 3CEB FOR ALL THE INTERNATIONAL T RANSACTIONS OF RS. 44.79 CRORES AND THE TP RISK INVOLVED IN ALL TH E INTERNATIONAL TRANSACTIONS WITH AES SHOULD HAVE BEEN VERIFIED BY REFERRING TO TPO AFTER OBTAINING THE APPROVAL FROM THE JURISDICTIONA L PR. CIT/ CIT AS PER PARA 3.2 OF THE INSTRUCTION NO. 03/2016 DATED 10.03 .2016. IT WAS ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 21 FURTHER SUBMITTED THAT EVEN WHERE IT IS HELD THAT T HE CASE OF THE ASSESSEE WAS SELECTED FOR LIMITED SCRUTINY, THEN AL SO, LARGE OUTWARDS REMITTANCES TO A NON RESIDENT NOT BEING A COMPANY O R TO A FOREIGN COMPANY (FORM-15CA) REQUIRE COMPLETE VERIFICATION/ EXAMINATION OF ALL THE ASPECTS RELATED TO IT AND IT CANNOT BE STATED T HAT ONLY FEW ASPECTS OF THIS ISSUE ARE REQUIRED TO BE VERIFIED AND THE ASPE CTS RELATED TO INTERNATIONAL TRANSACTIONS WITH AES ARE NOT REQUIRE D TO BE VERIFIED. 28. IN THIS REGARD, ON PERUSAL OF NOTICE ISSUED U/S 143(2) DATED 13.03.2016, THERE IS A CLEAR MENTION ON THE FACE OF THE NOTICE THAT CASE OF THE ASSESSEE WAS SELECTED FOR LIMITED SCRUTINY U NDER CASS WHICH ALSO FIND CLEAR ASSERTION IN THE ASSESSMENT ORDER WHERE THE AO HAS CLEARLY STATED THAT THE CASE OF THE ASSESSEE WAS SELECTED F OR LIMITED SCRUTINY. IT IS THEREFORE A CASE OF LIMITED SCRUTINY AND NOT THA T OF COMPLETE SCRUTINY WHERE THE CASE HAS BEEN SELECTED UNDER CASS. 29. IN TERMS OF THE REASONS FOR SELECTION OF CASE U NDER LIMITED SCRUTINY, IT IS NOTED THAT THE CASE WAS SELECTED TO EXAMINE LARGE VALUE REMITTANCE TO NON-RESIDENT NOT BEING A COMPANY OR A FOREIGN COMPANY (FORM 15CA) AND RECEIPT OF LARGE VALUE FOREIGN REMI TTANCE. ADMITTEDLY, THE CODE USED TO EXAMINE LARGE VALUE REMITTANCE TO NON-RESIDENT NOT BEING A COMPANY OR A FOREIGN COMPANY (FORM 15CA) WA S TX 12.01 WHICH IS DIFFERENT FROM THE CODE TP10.03 USED FOR S ELECTION OF CASES FOR TRANSFER PRICING RISK PARAMETER. FURTHER, ON PERUS AL OF FORM 15CA, SUBMITTED BEFORE THE AO DURING THE COURSE OF ASSESS MENT PROCEEDINGS AND ALSO PLACED BEFORE US AS PART OF THE PAPERBOOK, WE FIND THAT THE ASSESSEE HAS DISCLOSED INTERNATIONAL TRANSACTIONS T OWARDS PURCHASES ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 22 FROM NON-RESIDENT ENTITIES AND CORRESPONDING FOREIG N REMITTANCES TO THE TUNE OF RS 1,49,05,62,623/-. FURTHER, ON PERUSAL O F FORM 3CEB, IT IS NOTED THAT THE ASSESSEE HAS DISCLOSED INTERNATIONAL TRANSACTIONS WITH ASSOCIATED ENTERPRISES TO THE TUNE OF RS 44,79,25,7 87/-. WE THEREFORE FIND THAT NOT ALL INTERNATIONAL TRANSACTIONS AS REP ORTED IN FORM 15CA RELATES TO TRANSACTIONS WITH ASSOCIATED ENTERPRISES AND ONLY A PART OF SUCH INTERNATIONAL TRANSACTIONS RELATES TO ASSOCIAT ED ENTERPRISES. THEREFORE, IN THE ENTIRETY OF FACTS AND CIRCUMSTANC ES OF THE PRESENT CASE, WHERE THERE ARE SEPARATE AND DISTINCT PARAMET ERS AND CODING EMPLOYED THROUGH CASS TO SELECTED CASES ON TP RISK PARAMETERS AND NON-TP RISK PARAMETERS AND WHERE NOT ALL INTERNATIO NAL TRANSACTIONS AS REPORTED IN FORM 15CA ARE WITH ASSOCIATED ENTERPRIS ES, IT CANNOT BE SAID THAT THE CASE OF THE ASSESSEE WAS SELECTED THROUGH CASS ON THE BASIS OF TP RISK PARAMETERS AND THE AO WAS MANDATORILY RE QUIRED TO REFER THE MATTER TO THE TPO FOR DETERMINATION OF ALP. WE FIN D THAT UNDER SIMILAR CIRCUMSTANCES, THE COORDINATE DELHI BENCHES IN CASE OF AMIRA PURE FOODS PRIVATE LIMITED (SUPRA) WHERE THE CASE OF THE ASSESSEE WAS SELECTED ON ACCOUNT OF MISMATCH BETWEEN INCOME DECL ARED IN ITR AND AMOUNT OF REMITTANCE RECEIVED (FORM 15CA), NEGATED THE ARGUMENTS ADVANCED ON BEHALF OF THE REVENUE THAT IT WAS MANDA TORY FOR THE AO TO REFER TO TPO SINCE THE CASE OF THE ASSESSEE WAS SEL ECTED FOR SCRUTINY ON ACCOUNT OF INTERNATIONAL TRANSACTIONS AND HAS OBSER VED AS UNDER : 29. WE ARE ALSO OF THE VIEW THAT AS PER INSTRUCTIO N NO. 3 OF 2016, IT WAS NOT MANDATORY FOR THE AO TO MAKE A REFERENCE TO TPO. THE ASSESSEE HAD EXPLAINED BEFORE THE LEARNED PRINCIPAL CIT THAT ITS CASE DOES NOT FALL UNDER THE CONDITIONS REFERRED TO IN THE INSTRUCTION NO. 3 OF 2016 AND AS SUCH IT WASNT OBL IGATORY FOR THE ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 23 AO TO MAKE A REFERENCE TO TPO. THE LEARNED PRINCIPA L CIT HAS NOT DEALT WITH THIS CONTENTION OF THE ASSESSEE AND HAS GIVEN A BALD FINDING THAT AO SHOULD HAVE REFERRED TO TPO AS PER INSTRUCTION NO. 3 OF 2016. THE LEARNED PRINCIPAL CIT HAS NOT SP ECIFIED UNDER WHICH CONDITION OF INSTRUCTION NO. 3 OF 2016, THE A O SHOULD HAVE REFERRED TO TPO. THE ARGUMENT OF THE LEARNED DEPART MENTAL REPRESENTATIVE THAT SELECTION UNDER CASS WAS MADE B ECAUSE OF MISMATCH IN FOREIGN REMITTENT AND FORM 15CA, ALSO D OESNT HELP THE CAUSE OF THE REVENUE. AS PER R. 37BB, THE REPOR TING IN FORM 15CA IS IN RESPECT OF PAYMENT MADE TO NON-RESIDENT NOT BEING A COMPANY OR TO A FOREIGN COMPANY. THE REPORTING IS N OT LIMITED OR IS NOT PARTICULARLY IN RESPECT OF PAYMENT MADE TO A SSOCIATED ENTERPRISE. WE ARE OF THE VIEW THAT THE CASS SELECT ION WAS NOT ON THE BASIS OF TP RISK PARAMETERS AS ENVISAGED IN INS TRUCTION NO. 3 OF 2016 AND AS SUCH THE AO WAS NOT BOUND TO MAKE A REFERENCE TO THE TPO. 30. SIMILARLY IN CASE OF EVEREADY INDUSTRIES INDIA LIMITED (SUPRA), WHERE ONE OF THE REASONS FOR SELECTION OF CASE WAS MISMATCH IN AMOUNT PAID TO RELATED PERSONS U/S 40A(2)(B) REPORTED IN F ORM 3CEB AND ITR, THE COORDINATE KOLKATA BENCHES DIDNT ACCEPT THE A RGUMENTS ADVANCED ON BEHALF OF THE REVENUE THAT IT WAS MANDATORY FOR THE AO TO REFER TO TPO AS PER PARA 3.2 OF INSTRUCTION NO. 3 OF 2016 AN D HAS OBSERVED AS UNDER: 23. WE FIND THAT THE ASSESSEE'S CASE WAS SELECTED UNDER CASS INTER ALIA ON THE PARAMETER THAT 'MISMATCH IN AMOUN T PAID TO ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 24 RELATED PERSONS U/S 40A (2) (B) REPORTED IN AUDIT R EPORT AND ITR'. WE NOTE THAT WITH REFERENCE TO THIS CASS REASON THE ASSESSEE WAS REQUIRED TO PROVIDE ITS EXPLANATION ABOUT THE A LLEGED MISMATCH OF THE FIGURES REPORTED IN TERMS OF SECTIO N 40A(2)(B) IN ITR AND TAX AUDIT REPORT. WE NOTE THAT EXPLANATION IN THAT REGARD WAS FURNISHED VIDE PARA 9 OF ASSESSEE'S LETT ER DATED 09.12.2016 [ PAGE109 OF PAPER BOOK]. IT WAS EXPLAIN ED BEFORE THE LOWER AUTHORITIES AS ALSO BEFORE US THAT IN CLA USE 9A OF PART A- OI OF THE INCOME-TAX RETURN IN ITR-6, THE ASSESSEE WAS REQUIRED TO SPECIFY THE QUANTUM OF THE AMOUNTS DEBITED TO TH E PROFIT & LOSS ACCOUNT ,TO THE EXTENT DISALLOWABLE U/S 40A, T O THE PERSONS SPECIFIED IN SECTION 40A(2)(B) OF THE ACT. IN OTHER WORDS IN THE ITR THE ASSESSEE WAS EXPECTED TO SPECIFY THE AMOUNT WHICH WAS DISALLOWABLE IN TERMS OF SECTION 40A(2)(B)OF THE AC T. ON THE OTHER HAND, IN CLAUSE 23 OF THE TAR READ WITH ANNEXURE - IX THERETO, THE AUDITOR HAD REPORTED THE PAYMENTS ACTUALLY MADE BY THE ASSESSEE TO THE PERSONS SPECIFIED IN SECTION 40A(2) (B) OF THE ACT. IT WAS EXPLAINED THAT THE TAX AUDITOR, WHILE GIVING HIS REPORT IN CONFORMITY WITH THE FORM PRESCRIBED BY THE BOARD U/ S 44AB OF THE ACT, WAS REQUIRED TO REPORT ONLY THE AMOUNTS PAID T O PERSONS SPECIFIED IN S 40A(2) DURING THE RELEVANT REPORTING PERIOD AND HE WAS NOT REQUIRED TO EXPRESS HIS OPINION AS TO WHETH ER THE PAYMENTS TO THE SPECIFIED PERSONS WERE EXCESSIVE AN D FOR THAT REASON ANY PART THEREOF WAS DISALLOWABLE U/S 40A(2) OF THE ACT. THE LD. AR THEREFORE SUBMITTED THAT THE INTENT AND PURPORT OF INFORMATION DISCLOSED IN CLAUSE 9A OF PART A- OI OF THE INCOME-TAX RETURN IN ITR-6 AND CLAUSE 23 OF THE TAR BEING MATE RIALLY ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 25 DIFFERENT, AND THE FIGURES REPORTED IN ITR AND IN C LAUSE 23 OF TAR DID NOT MATCH. 24. THE LD. AR SUBMITTED THAT THE CASS PARAMETER RE FERRED ONLY TO MISMATCH OF THE FIGURES REPORTED IN TAX AUDIT RE PORT IN RELATION TO PAYMENTS MADE TO PERSONS REFERRED 40A(2)(B) WITH THE FIGURES MENTIONED IN INCOME-TAX RETURN. THE CASS REASONS DI D NOT MAKE REFERENCE TO THE 'TRANSFER PRICING AUDIT REPORT' FU RNISHED IN FORM 3CEB, AS WRONGLY ALLEGED BY THE LD. PR. CIT IN HIS SCN. HE THEREFORE SUBMITTED THAT WHEN THE REASON FOR SELECT ION UNDER CASS WAS EXAMINED AND THE AO WAS SATISFIED WITH THE EXPLANATION FURNISHED FOR THE SAME, THE LD. PR. CIT COULD NOT JUSTIFY INVOCATION OF POWER U/S 263ON THE GROUND TH AT BEFORE COMPLETION OF ASSESSMENT REFERENCE TO TPO ON TRANSF ER PRICING RISK PARAMETER WAS MANDATORY IN TERMS OF PARA 3.2 O F THE CBDT INSTRUCTION NO. 3 OF 2016. 25. HAVING CONSIDERED RIVAL SUBMISSIONS WE FIND MER IT IN THE LD. AR'S PRIMARY CONTENTION THAT THE SCN PROCEEDED ON T HE WRONG PRESUMPTION THAT THE ASSESSEE'S CASE WAS SELECTED O N A TRANSFER PRICING RISK PARAMETER. WE NOTE THAT THE PARAMETER FOR SELECTION WAS AS FOLLOWS: 'MISMATCH IN AMOUNT PAID TO RELATED PERSONS U/S 40A (2) (B) REPORTED IN AUDIT REPORT AND ITR' 26. IT IS THUS NOTED THAT NOWHERE THE CASS REASON S TATED THE SELECTION OF THE ASSESSEE'S CASE WAS ON THE GROUND OF THERE BEING ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 26 'LARGE VALUE OF SPECIFIED DOMESTIC TRANSACTIONS' OR 'LARGE VALUE OF INTERNATIONAL TRANSACTIONS' SO AS TO WARRANT AN INF ERENCE THAT THE CASE WAS SELECTED ON TRANSFER PRICING RISK PARAMETE R. ON THE CONTRARY, THE CASS REASON MERELY CLAIMED THAT THERE WAS MISMATCH IN THE AMOUNT PAID TO RELATED PERSONS U/S 40A(2)(B) OF THE ACT REPORTED IN AUDIT REPORT AND ITR. FROM PLAI N READING OF THE SAID CASS REASON, WE ARE OF THE VIEW THAT NO PR UDENT PERSON PROPERLY INSTRUCTED IN LAW WOULD HAVE INFERRED THAT THE AFORESAID PARAMETER CONSTITUTED 'TRANSFER PRICING RISK PARAME TER' SO AS TO WARRANT MANDATORY REFERENCE U/S 92CA OF THE ACT IN TERMS OF THE PARA 3.2 OF CBDT INSTRUCTION NO. 3 OF 2016 AND FAIL URE TO MAKE TP REFERENCE MADE THE ASSESSMENT ORDER ERRONEOUS. W E FURTHER FIND THAT ONCE THE INCORRECT PRESUMPTION ON LD. PR. CIT'S PART WAS HIGHLIGHTED BY THE ASSESSEE IN IT'S SUBMISSION THEN IN THE IMPUGNED ORDER THE LD. PR.CIT HIMSELF COMPLETELY DI GRESSED FROM THE REASON SET OUT IN THE SCN BUT NONE THE LESS JUS TIFIED HIS ACTION ON THE GROUND THAT THE REFERENCE TO TPO WAS NECESSARY BECAUSE THE ASSESSEE'S CASE WAS SELECTED FOR SCRUTI NY UNDER THE CATEGORY OF 'COMPLETE SCRUTINY'. WE ARE HOWEVER UNA BLE TO ACCEPT AN ALTOGETHER NEW CASE MADE OUT BY THE LD. PR. CIT WHILE PASSING THE IMPUGNED ORDER, JUSTIFYING HIS INTERFERENCE THA T FOR NOT MAKING REFERENCE TO THE TPO, ORDER OF ASSESSMENT WA S ERRONEOUS IN TERMS OF SECTION 263 OF THE ACT. IN THE FIRST IN STANCE, WE NOTE THAT THE LD. PR. CIT HIMSELF GAVE UP THE REASON SET OUT IN SCN VIZ., THAT ONE OF THE CASS REASON FOR SELECTION OF SCRUTINY ASSESSMENT WAS A TRANSFER PRICING RISK PARAMETER. O NCE IT IS ESTABLISHED THAT THE TRANSFER PRICING RISK PARAMETE R WAS NOT THE ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 27 GROUND FOR SELECTION OF SCRUTINY ASSESSMENT U/S 143 (3) OF THE ACT, THEN WE HAVE TO AGREE WITH THE LD. AR'S SUBMIS SION THATPARA 3.2 OF THE CBDT INSTRUCTION NO. 3 OF 2016 WAS NOT A PPLICABLE IN THE GIVEN FACTS OF THE PRESENT CASE AND THEREFORE T HE AO'S ORDER COULD NOT HAVE BEEN HELD TO BE ERRONEOUS BY THE CIT FOR NOT MAKING REFERENCE TO THE TPO IN TERMS OF THE SAID CB DT INSTRUCTION 3 OF 2016. 31. AT THE SAME TIME, IT CANNOT BE DENIED THAT AS T HERE ARE INTERNATIONAL TRANSACTIONS WITH ASSOCIATED ENTERPRI SES, THE AO IS REQUIRED TO EXAMINE CIRCUMSTANCES AS STATED IN PARA 3.3 OF I NSTRUCTION NO. 3/2016 AND WHERE THE CASE OF THE ASSESSEE FALLS UND ER ANY OF SUCH CIRCUMSTANCES, THE AO IS REQUIRED TO REFER THE MATT ER TO THE TPO. IN THE INSTANT CASE, WE FIND THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO DID ENQUIRE AND CALLED FOR INFO RMATION FROM THE ASSESSEE TO DETERMINE WHETHER ANY OF THE CIRCUMSTAN CES EXIST AS SO SPECIFIED IN PARA 3.3 OF INSTRUCTION NO. 3/2016 WHI CH REQUIRE THE MATTER TO BE REFERRED TO TPO. IN RESPONSE, THE ASSESSEE VI DE ITS SUBMISSION DATED 6.3.2017 HAS SUBMITTED THE REQUISITE DETAILS AND DOCUMENTATION AND ON BEING SATISFIED WITH SUCH SUBMISSION AND AFT ER CARRYING OUT NECESSARY EXAMINATION, THE AO DIDNT RECORD ANY FIN DINGS WHICH WARRANT REFERENCE OF THE MATTER TO THE TPO. THE LD PCIT HA S ALSO NOT STATED ANYTHING IN HIS ORDER AS TO THE EXISTENCE OF ANY SU CH CIRCUMSTANCES WHICH REQUIRE REFERENCE TO TPO AND EVEN DURING THE COURSE OF HEARING BEFORE US, NOTHING HAS BEEN BROUGHT ON RECORD TO TH IS EFFECT. ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 28 32. THE INSTRUCTION NO. 3 OF 2016 IN PARA 3.3 STATE S THAT WHERE CASES ARE SELECTED FOR SCRUTINY ON NON TRANSFER PRICING R ISK PARAMETERS BUT ALSO HAVING INTERNATIONAL TRANSACTIONS OR SPECIFIED DOME STIC TRANSACTIONS, SHALL BE REFERRED TO TPO IN SPECIFIED CIRCUMSTANCES . THE SAID CLAUSE 3.3 OF THE INSTRUCTION SPECIFIES THREE SITUATIONS AND W E FIND THAT NONE OF THE SITUATION IS APPLICABLE IN THE CASE OF THE ASSESSEE . THE FIRST SITUATION REQUIRES THAT WHERE THERE ARE INTERNATIONAL TRANSAC TIONS OR SPECIFIED TRANSACTIONS OR BOTH AND THE TAXPAYER HAS NOT FILED ANY REPORT REQUIRED TO BE SUBMITTED UNDER SECTION 92E. THIS IS NOT A SI TUATION IN THE CASE OF THE ASSESSEE AS THE REPORT WAS DULY SUBMITTED. THE SECOND SITUATION WHERE IN PREVIOUS ASSESSMENTS IF ANY ADDITION ON AC COUNT OF TRANSFER PRICING ADJUSTMENT OF MORE THAN TEN CRORES AND ADDI TION BEING UPHELD IN APPELLATE PROCEEDINGS IS ALSO NOT APPLICABLE IN THE CASE OF THE ASSESSEE. THIRDLY, THIS IS NOT A CASE WHERE SEARCH OR SEIZURE OR SURVEY OPERATIONS HAD BEEN CARRIED OUT. IN SUCH A SITUATION, IT CANNO T BE SAID THAT THE ASSESSMENT ORDER IS ERRONEOUS AS REFERENCE TO TPO W AS NOT MADE. 33. IN LIGHT OF AFORESAID DISCUSSIONS AND IN THE EN TIRETY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT THE NECESSARY ENQUIRIES AND EXAMINATION AS REASONABLY E XPECTED HAVE BEEN CARRIED OUT BY THE ASSESSING OFFICER AND HE HA S TAKEN A PRUDENT, JUDICIOUS AND REASONABLE VIEW AFTER CONSIDERING THE ENTIRE MATERIAL AVAILABLE ON RECORD AS WELL AS FOLLOWING THE CBDT I NSTRUCTION NO. 3 OF 2016 AND THE ORDER SO PASSED U/S 143(3) CANNOT BE H ELD AS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE . THE IMPUGNED ORDER PASSED BY THE LD PCIT U/S 263 IS ACCORDINGLY SET ASIDE AND THE ORDER OF THE ASSESSING OFFICER IS SUSTAINED. ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 29 ITA NO. 15/JODH/2021 34. BOTH THE PARTIES SUBMITTED THAT THE FACTS AND C IRCUMSTANCES OF THE CASE IN THIS APPEAL IS EXACTLY IDENTICAL TO FAC TS AND CIRCUMSTANCES OF THE CASE IN ITA NO. 14/JODH/2021 AND THEREFORE, CON TENTIONS AS ADVANCED BY THE RESPECTIVE PARTIES IN ITA NO. 14/JO DH/2021 MAY BE CONSIDERED. 35. IN LIGHT OF THE SUBMISSIONS SO MADE BY BOTH THE PARTIES, OUR FINDINGS AND DIRECTIONS CONTAINED IN ITA NO. 14/JOD H/2021 SHALL APPLY MUTATIS MUTANDIS TO THIS MATTER AS WELL AND THE APPEAL OF THE ASSES SEE IS THUS ALLOWED. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESS EE ARE ALLOWED IN LIGHT OF AFORESAID DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 08/09/2021. SD/- SD/- ( SANDEEP GOSAIN ) (VIKRAM SINGH YADAV) JUDICIAL MEMBER ACCOUNTANT MEMBER JODHPUR DATED:- 08/09/2021. *SANTOSH COPY OF THE ORDER FORWARDED TO: 1. A. THE APPELLANT- RAVINDRA HERAEUS PRIVATE LIMITED, UDAIPUR. 2. THE RESPONDENT- PR. CIT, UDAIPUR. 3. CIT 4. CIT(A) 5. DR, ITAT, JODHPUR. ITA NO. 14 & 15/JODH/2021 RAVINDRA HERAEUS PVT. LTD VS. PR. CIT 30 6. GUARD FILE { ITA NO. 14 &15/JODH/2021} BY ORDER, ASST. REGISTRAR