Outline of Transfer Pricing Assessment Proceedings

 The sequence of a commonplace exchange evaluating continuing is as per the following: 

(A) Filing of the Income-Tax Return by an Assessee 

(B) Reference made by the Assessing Officer ('AO') to the Transfer Pricing Officer ('TPO') 

(C) Transfer estimating procedures led by the TPO and passing of the TP request. 

(D) AO passes draft appraisal request ('DAO') fusing the increments proposed by the TPO 

(E) Within 30 days of receipt of the DAO, the Assessee has the alternative of drawing nearer either Commissioner of Income-charge – Appeals ('CIT(A)') or the Dispute Resolution Panel ('DRP') 

- If no insinuation is gotten inside 30 days by the Assessee, the AO would give the Final Assessment Order. 

- on the off chance that the Assessee has approach the DRP against the increments proposed in the DAO, the Final Assessment Order must be passed by the AO in the wake of getting bearings from the DRP. 

- Against the FAO, the Assessee may go for additional allure before the Income-Tax Appellate Tribunal, the High Court and the Supreme Court (consecutively) 

Key viewpoints to recollect comparable to a TP procedures are as per the following: 

• The Central Board of Direct Taxes ('CBDT') has given Instruction 3/2016 Dated: 10/03/2016 giving rules to execution of the exchange evaluating arrangements by the AO and the TPO. 

• The reference to the TPO by the AO needs earlier endorsement of the jurisdictional Principal Commissioner of Income-charge ('PCIT') or CIT. 

• If the case has been gotten by virtue of a Transfer Pricing Risk boundary at the investigation stage – the AO is ordered to make a reference to the TPO. 

Cases chose for examination on non-move evaluating boundaries can likewise be alluded to the TPO in conditions wherein the AO associates the presence with global exchanges or when an exchange valuing change in abundance of Rs. 10 crores was made in a previous evaluation year. 

• The CBDT recognizes that conglomeration of exchanges could be embraced by an Assessee for the motivation behind benchmarking an exchange, and in this scenery, a few exchanges can be alluded to the TPO if the investigation is gotten because of TP hazard boundaries corresponding to a specific global exchange. 

Administrative Provisions to recollect: 

Area 92CA of the Income-charge Act, 1961 ('ITA') reproduced as under

1) Where any individual, being the assessee, has gone into a worldwide exchange or determined homegrown exchange in any earlier year, and the Assessing Officer thinks of it as important or practical so to do, he may, with the past endorsement of the Principal Commissioner or Commissioner, allude the calculation of the a safe distance cost corresponding to the said global exchange or indicated homegrown exchange under section 92C to the Transfer Pricing Officer. 

Section  92CA(3A) of the ITA 

… .a request under sub-section (3) might be made whenever before sixty days preceding the date on which the time of impediment alluded to in section 153, or all things considered, in section153B for making the request for evaluation or reassessment or recomputation or new appraisal, by and large, terminates: (TLDR: the TP request ought to be given somewhere around 60 days before the due date for culmination of evaluation) 

Section  92C(3) of the ITA 

Where throughout any procedure for the appraisal of pay, the Assessing Officer is, based on material or data or report in his ownership, of the assessment that— 

(a) the cost charged or paid in a global exchange or indicated homegrown exchange has not been resolved as per sub-areas (1) and (2); or 

(b) any data and archive identifying with a worldwide exchange or indicated homegrown exchange have not been kept and kept up with by the assessee as per the arrangements contained in sub-area (1) of section 92D and the guidelines made for this sake; or 

(c) the data or information utilized in calculation of the a manageable distance cost isn't solid or right; or 

(d) the assessee has neglected to outfit, inside the predefined time, any data or report which he was needed to outfit by a notification gave under sub-section (3) of section 92D, 

the Assessing Officer may continue to decide the a careful distance cost corresponding to the said global exchange or indicated homegrown exchange as per sub-areas (1) and (2), based on such material or data or record accessible with him: 

Given that a chance will be given by the Assessing Officer by serving a notification calling upon the assessee to show cause, out on the town and time to be indicated in the notification, why the a careful distance cost ought not be so resolved based on material or data or archive in the ownership of the Assessing Officer. 

Area 92E of the ITA 

Each individual who has gone into a global exchange or determined homegrown exchange during an earlier year will get a report from a bookkeeper and outfit such report prior to the predefined date in the endorsed structure properly marked and confirmed in the recommended way by such bookkeeper and presenting such specifics as might be endorsed. 

Section 153(1) of the ITA 

• No request for appraisal will be made under section 143 or section 144 whenever after the expiry of 21 months from the finish of the evaluation year where the pay was first assessable: [AY 2017-18 and earlier – 21 months for appraisal completion.]
• Given that in regard of a request for appraisal identifying with the evaluation year starting on the first day of April, 2018, the arrangements of this sub-area will have impact, as though for the words "21 months", the words "eighteen months" had been subbed: [AY 2018-19 – year and a half for appraisal completion]
• Given further that in regard of a request for evaluation identifying with the appraisal year initiating on or after the first day of April, 2019, the arrangements of this sub-area will have impact, as though for the words "21 months", the words "a year" had been subbed: [AY 2019-20 and AY 2020-21 – a year for appraisal completion] 
• Given additionally that in regard of a request for evaluation identifying with the appraisal year starting on or after the first day of April, 2021, the arrangements of this sub-area will have impact, as though for the words "21 months", the words "nine months" had been subbed. [AY 2021-22 onwards – 9 months for evaluation completion] 

Section 153(4) of the ITA 

Despite anything contained in sub-sections (1), (2) and (3), where a reference under sub-section (1) of section 92CA is made throughout the procedure for the appraisal or reassessment, the period accessible for finishing of evaluation or reassessment, by and large, under the said sub-areas (1), (2) and (3) will be stretched out by a year.

 [If reference to TPO is made, add a year to the above time-frames for finishing of assessment]