Arms length pricing discovery has just been made more easier for TPOs as their power have been enhanced by Finance Bill 2011-12. The Bill has increased the power of transfer pricing officer by amendment and insertion of clauses and sub clause of Section 92CA of the I T Act. Here are the proposed power enhancement new clauses
1. Now TPO can go into matters not referred to it.
The issue was that the starting point of reference to TPO is from Assessing Officer as per section 92C . Whether the Transfer Pricing Officer while scrutinising the issue referred by A.O comes to another issue which, in his opinion falls under transfer pricing mechanism, yet was not referred by the A.O . Can TPO go into such new issues which comes to his knowledge during the in the course of proceeding u/s 92C?
Finance Bill 2011-12 has proposed insertion of new sub-clause 2A under Clause 92CA empowering TPO to go into such new issues. Here is the words of new provision
In section 92CA of the Income-tax Act, with effect from the 1st day of June, 2011,— of section 92CA.
(i) after sub-section (2), the following sub-section shall be inserted, namely:—
"(2A) Where any other international transaction [other than an international transaction referred under sub-section (1)], comes to the notice of the Transfer Pricing Officer during the course of the proceedings before him, the provisions of this Chapter shall apply as if such other international transaction is an international transaction referred to him under sub-section (1).";
2. TPO now empowered with power to survey under section 133A
Subsection 7 of section 927 deal with power of Transfer Pricing Officer to get information and enquire for the purpose of knowing arms length pricing in an international transaction. The powers conferred are
- powers under clause a to d of section 131
- powers to call for information u/s 133(6)
- Now , one more power is added i.e power of survey u/s 133A of the I T Act.