ITAT Astonished At AO's "Assault On Rule Of Law" + HC Verdict On S. 263 Of Transfer Pricing Cases

 

Dear Subscriber,

 

The following important judgements are available for download at itatonline.org.

DCIT vs. SAP Labs India Pvt. Ltd (ITAT Bangalore)

AO's action of giving effect to a quashed s. 263 revision order termed "assault on rule of law" & "contempt of court"

By the by, we are very much astonished to observe that the AO has passed a revised assessment order even after knowing that the revision order passed by the CIT has been set aside by the Tribunal. The action of the AO could be treated as assault on the rule of law. His action amounts to contempt of court as well. The Revenue could have preferred to file an appeal before the High Court against the order of the Tribunal setting aside the revision order passed by the CIT. If such an appeal has been already filed, well and good. Otherwise, Revenue has no remedy when the Tribunal has set aside the revision order of the CIT. The said order no more exists and the AO has no substratum to build a second round of revised assessment. We do not think that all these matters are unknown to the Assessing Authority. But giving due consideration to the explanations offered by the learned senior officers appearing for the Revenue and also for the reason that the AO might have prompted to act in haste, only in public interest, we do not proceed further in this matter. But we wish that before jumping into such controversial games, the AO ought to have taken advice from his seniors.

CIT vs. SAP Labs Pvt. Ltd (Karnataka High Court)

S. 263: TPO's acceptance of ALP shows two views are possible & CIT has no jurisdiction to revise assessment

On the day the reference was made by the AO to the TPO, there was no return pending for consideration by him and therefore, the very reference was bad. Even otherwise, the said Transfer Pricing Authority did not find fault with the adjudication of determining arms length price by the Assessing Authority. In those circumstances, the CIT committed an error in exercising his power u/s 263 and the Tribunal was justified in interfering with the said order.

Regards,

 

Editor,

 

itatonline.org

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