CMA Final · Direct Tax Laws and International Taxation · Transfer Pricing
Under section 166 of the Income-tax Act, 2025, the Assessing Officer may refer the determination of the arm's length price of an international transaction to the Transfer Pricing Officer only if he considers it necessary or expedient and obtains previous approval of which authority?
The Assessing Officer needs the previous approval of the Principal Commissioner or Commissioner before referring the arm's length price determination to the Transfer Pricing Officer, in addition to considering the reference necessary or expedient. No approval from the CBDT or appellate authorities is required.
- APrincipal Commissioner or CommissionerCorrect
- BBoard (CBDT) Chairman
- CDispute Resolution Panel
- DCommissioner (Appeals)
Explanation
Section 166(1) permits the reference when the AO considers it necessary or expedient, with the previous approval of the Principal Commissioner or Commissioner. The Dispute Resolution Panel and Commissioner (Appeals) act at later stages and give no approval for a reference.
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