« From the Courts » Open DEMAT Account in 24 hrs  Karnataka High Court restrains Bengaluru-based Institute of Chartered Tax Practitioners India from enrolling candidates for its courses  Attachment on Cash Credit of Assessee under GST Act: Delhi HC directs Bank to Comply Instructions to Vacate  Income Tax Addition Made Towards Unsubstantiated Share Capital Is Eligible For Section 80-IC Deduction: Delhi High Court  Inordinate delay in income tax appeal hearings  Income Tax leviable on Tuition Fee in the Year of Rendering of Services: ITAT  Supreme Court invoked its power under Article 142 of Constitution to validate notices issued under section 148 as notices issued under section 148A. However the same shall be subject to amended provisions of section 149.  ITAT refuses to stay tax demand on former owner of Raw Pressery brand  Bombay HC sets aside rejection of refund claims by GST authorities  [Income Tax Act] Faceless Assessment Scheme does not take away right to personal hearing: Delhi High Court  Rajasthan High Court directs GST Authority to Unblock Input Tax Credit availed in Electronic Credit Ledger  Sebi-taxman fight over service tax dues reaches Supreme Court «  No increase of medical seats by interim court orders:... Supreme Court chides itself, govt for judicial backlog... » M/s Veer Gems vs. ACIT (Gujarat High Court) January, 12th 2012 AOs decision to refer to TPO must be based on material & not be arbitrary   The assessee entered into transactions with a party named Blue Gems BVBA. In the preceding year, the assessee treated the transactions as an international transaction for transfer pricing purposes. However, in the present year, the assessee claimed that though the said party was a related party, it was not an affiliated entity as defined in s. 92CA. However, instead of deciding the issue, the AO made a reference to the TPO to determine the ALP and the TPO asked the assessee to show-cause why the transaction with the said party was not subject to transfer pricing proceedings. The assessee filed a Writ Petition to challenge the action of the AO/TPO. HELD by the High Court:   The AO has jurisdiction to make a reference to the TPO only if there is an international transaction. Though the question as to whether there is an international transaction may be disputed, the AO is not obliged to grant hearing to the assessee, invite and consider the objections with respect to the question whether there was an international transaction before making a reference to the TPO. The AOs opinion has to be based on available material and would have ad-hoc finality. The power cannot be exercised arbitrarily or at whims or caprice. S. 92C (1) has inbuilt safeguards to ensure that the reference is made only in appropriate cases with approval of the higher authority. At the stage of framing the assessment in terms of the TPOs report the AO is entitled (despite the amendment to s. 92CA(4)) to consider the objections of the assessee that in fact there had been no international transaction. If the assessee succeeds in establishing such fact, the AO would have to drop the entire transfer pricing proceedings. Even the DRP has the power to consider whether there was an international transaction or not and it can annul the computations proposed on the basis of the TPOs order. However, the TPO has no jurisdiction to decide the validity of any such reference and his task is only to determine the ALP. On facts, as the parties were closely related and the assessee had accepted in the preceding year that the transactions were subject to transfer pricing, the AOs reference could not be interfered in writ proceedings.