Reference to TPO is valid if AO does not supply satisfaction note before making reference
The Assessee had filed the petition before the High Court challenging the validity of reference made by AO to TPO to determine ALP of international transactions. The petition was filed in terms of Instructions no.3/2016, the requirement of passing reasoned order on the objection of the assesse regarding whether a transaction is an international transaction or not and the service of the order upon the assesse is a condition precedent to the Assessing Officer making a reference to the TPO.
The contention of the assessee that the reference was void ab-initio was rejected. It was held that that the failure to supply the satisfaction note before reference to the TPO is at the highest a mere irregularity and does not prejudice the assessee in any manner whatsoever. The writ petition was accordingly dismissed.