Madhumita Roy ORDER
Pradip Kumar Kedia, Member (A)
1. The captioned appeal has been filed at the instance of the Assessee against the order of the Pr. Commissioner of Income Tax, Ahmedabad-5 ('Pr. CIT' in short), dated 26.03.2019 arising in the assessment order dated 20.06.2016 passed by the Assessing Officer (AO) under s. 143(3) of the Income Tax Act, 1961 (the Act) concerning AY 2014-15.
2. In the captioned appeal, the assessee has challenged the action of the Pr. CIT assumed under s. 263 of the Act whereby assessment order passed by AO under s. 143(3) of the Act was sought to be set aside for consequential enquiries on transactions undertaken by the assessee with sister concern having regard to provisions of Section 92BA of the Act.
3. At the time of hearing, the learned AR for the assessee pointed out that an assessment order dated 20.06.2016 concerning AY 2014-16 passed under s. 143(3) of the Act assessing the total income at Rs. 27,81,630/-. The order so passed under s. 143(3) of the Act was sought to be set aside by the Pr. CIT in exercise of jurisdiction under s. 263 of the Act on the ground that despite the domestic transactions undertaken by the assessee covered within the ambit of Section 92BA of the Act for which prescribed form 3CEB issued by the Chartered Accountant was filed by assessee, the AO has failed to refer the matter to the Transfer Pricing Officer (TPO) and in carrying out the necessary consequential inquiries.
3.1. A show cause notice under s. 263 of the Act dated 04.12.2018 was issued in the regard was referred to by the learned AR for the assessee which read as under:
"On verification of your assessment case records for the A.Y. 2014-15, it is seen that the assessment order u/s. 143(3) of the Income Tax Act, 1961 was passed on 20/06/2016 by the ITO, Ward-5(2)(1), Ahmedabad, determining the total income at Rs. 27,81,630/- against the returned income of Rs. 27,60,030/-. However, on examination of the details as made available by you for the purpose of making assessment order, it is construed that the assessment order dated 20/06/2016 appears to be erroneous in so far as it is prejudicial to the interest of the Revenue for the reasons mentioned in the subsequent paragraphs.
2.0 On verification, it was noticed that the case was selected for scrutiny through CASS and one of the reasons for selection was a Transfer Pricing risk parameter namely "Large specified domestic transaction (form 3CEB) and the value of transactions are:-
(i) Rs. 19,36,86,462/-
(ii) Rs. 18,000/-
Therefore, as per Board's instruction No. 3/2016 & F. No. 500/9/2015-APA-II dated 10.03.2016 issued by the Board the case was mandatory to be referred to TPO but the same was not done. The case accordingly had to be referred to TPO. However, this was not done even though the same was mandatory as per said instruction. The A.O. has not considered the reason for scrutiny selection as per CASS and failed to conduct necessary enquiry.
3.0 From the discussion above, it may be seen that the assessment order passed u/s. 143(3) of the Income Tax Act, 1961 on 20/06/2016 for the A.Y. 2014-15 is erroneous in so far as prejudicial to the interest of the Revenue. You are therefore requested to show cause as to why action u/s.