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CA Final · Direct Tax Laws & International Taxation · Transfer Pricing

During proceedings on a reference concerning one transaction of Meera Exports Ltd., the TPO notices another international transaction that the assessee did not include in the report under section 172. What does section 166 provide?

The Chapter applies as if the transaction had been referred to the TPO under section 166(1). Section 166(5) covers transactions not included in the report under section 172 that come to the TPO's notice during proceedings, so no fresh reference by the AO is needed.

  1. AThe TPO cannot examine it without a fresh reference by the AO
  2. BThe provisions of the Chapter apply as if that transaction was referred to the TPO under sub-section (1)Correct
  3. CThe transaction is to be sent back to the AO for a new approval
  4. DThe transaction is exempt from transfer pricing for that year

Explanation

Section 166(5) covers a transaction not referred, or one not included in the report under section 172, that comes to the TPO's notice during proceedings. The Chapter then applies as if it had been referred under sub-section (1). No fresh reference is needed.

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