CMA Final · Direct Tax Laws and International Taxation · Transfer Pricing
Under section 166 of the Income-tax Act, 2025, an Assessing Officer wants to refer the determination of the arm's length price of an international transaction to the Transfer Pricing Officer. What must the Assessing Officer have before making the reference?
The Assessing Officer needs the previous approval of the Principal Commissioner or Commissioner. Section 166(1) permits a reference to the Transfer Pricing Officer when he considers it necessary or expedient. The assessee's consent, a DRP order or CBDT approval is not a condition for the reference.
- AThe previous approval of the Principal Commissioner or CommissionerCorrect
- BThe written consent of the assessee
- CThe prior order of the Dispute Resolution Panel
- DThe approval of the Central Board of Direct Taxes
Explanation
Section 166(1) allows the Assessing Officer to refer the matter to the TPO if he considers it necessary or expedient, with the previous approval of the Principal Commissioner or Commissioner. The assessee's consent, a DRP order or CBDT approval is not required.
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