DEBANGSU BASAK, J. - (1.) The petitioners assail a notice issued by the Transfer Pricing Officer (TPO) dated April 16, 2015 and the consequential steps taken by the department pursuant thereto.
(2.) Learned senior advocate for the petitioners submits that, the first petitioner has branch units located at two countries apart from India. They are at Saudi Arabia and United Arab Emirate. He submits that, there was no business transaction far less an international business transaction between the unit in India and the two branch units at the two different countries. Therefore, the provisions for arm's length pricing in respect of the so-called international transaction does not get attracted to the facts of the present case. The assessing officer did not decide such jurisdictional fact before transferring the matter to the Transfer Pricing Officer. In fact, he submits that, the assessing officer had issued a show cause notice dated March 11, 2015 requiring the first petitioner to submit written submission with sufficient evidence. The first petitioner had done so by its reply dated March 24, 2015. The first petitioner as the assessee did not hear from the assessing officer as to its decision on the subject. The first petitioner was surprised to receive the impugned notice dated April 16, 2015 from the TPO. The petitioners had also received an order of the TPO and a draft assessment order pursuant thereto. He submits that, the assessing officer not having decided the jurisdictional fact, there is an error in the exercise of jurisdiction by the assessing officer in transferring the assessment to the TPO. He further submits that, the assessing officer has acted in breach of the principles of natural justice in not granting a reasonable opportunity of hearing to the assessee concerned before taking a decision on such jurisdictional fact. Consequently, the transfer of the assessment proceedings from the assessing officer to the TPO and ultimately the passing of the draft order of assessment stands vitiated. In support of the contention that, the petitioner is entitled to a right of hearing before the assessing officer, at that stage, learned senior advocate for the petitioners relies upon a circular dated March 10, 2016 which recognises such right to an assessee. He also refers to the provisions of section 92CA of the Income Tax Act, 1961 also.
(3.) The department is represented.;