We have seen that, undisputedly the name of the AE’s, nature of relationship with AE, and the brief description of business carried by the AE with assessee for functional analysis and benchmarking related with its AEs are on record in the report under Form 3CEB. Though the complete details are not ascertainable from the record relied by the assessee. Though, the details related with the foreign AE’s are available in the additional evidence filed by the assessee, which have not been relied by ld AR for the assessee while making submission on additional ground of appeal. We have also considered the objections of the revenue that additional ground raised by the assessee should not be admitted at this stage. After considering, the submission of revenue, we are of the view that approach in such matters should be different, when the revenue seeks to fasten liability before the Tribunal. The reasons are that the Tribunal is the last fact-finding authority and the assessee has no other avenue to raise its grievances so far as facts are concerned. In case, on the facts and in the law, ultimately if it is discovered that assessee is not liable to tax, the revenue cannot have grievances. The Article 265 of the Constitution of India provides that no tax should be levied and collected except by authority of law. In case, if ultimately the assessee is found to be liable to tax, the assessee will compensate the revenue in term of interest on the tax liability. We are of the view that fundamental principle laid down by Hon’ble Apex Court in case of NTPC (supra) is that there can be no tax liability without the authority of law and the principal will hold good all points of time. The Hon’ble Delhi High Court in case of GE Money Financial Services Private Ltd Vs PCIT(supra) while examining the correctness of the order related with the treating of Foreign Associated Enterprises (AE’s) held as under:
“The question of law which the assessee/appellant argues in this appeal for AY 2009-10 is regarding the appropriateness and correctness of treating the Foreign Associated Enterprises (AE’s) as a tested party. The assessee’s transfer pricing analyses and determination of ALP led it to approach to ITAT which by impugned order has remitted the matter for consideration of the most appropriate method as well as question of appropriate comparable is applicable in the circumstances of the case. The assessee has approached this court against the observation and findings of the ITAT –in para 10 to 18 to the effect that the foreign AE cannot be considered as tested party. Reliance is placed upon section 92B to contend that there is nothing in the provision inhibiting such consideration.
This court notices that for re-consideration and determination of the appropriate method as well as appropriate comparable is and the tested party, it would be convenient and appropriate for the TPO to consider the question which the assessee as in the present case. The TPO is therefore directed to overlook and not feel bound by the observation of the Tribunal and render finding on merit of the issue.”
In view of the above factual and legal discussion, we are of the view that whole intent and purpose of the transfer pricing provision is first select the most appropriate comparable/ tested party and thereafter, by applying the most appropriate method to determine arm’s length price(ALP). Considering, the fact that assessee has not raised the issue related with the selection of comparable as AE’s either before the transfer pricing officer or before first appellate authority, and has raised the issue for the first time before the Tribunal by way of additional ground of appeal. Thus, considering the material available on record and the factual and legal discussion as referred above, we admit the additional ground of appeal raised by assessee, and are inclined to restore this issue raised in the additional ground to the file of assessing officer/transfer pricing officer for examining issue afresh. The AO/TPO shall decide the issue after considering all the material available on record in accordance with the law. The assessing officer/transfer pricing officer shall decide the issue by calling the information and documents from the assessee as well as by making his own inquiry in the data base or otherwise. Needless to say that assessing officer/transfer pricing officer shall afford reasonable opportunity to the assessee before deciding the issue. The assessee is also directed to cooperate with the assessing officer/transfer pricing officer in providing all necessary information and documents and not to seek adjournment without any proper and valid reasons. With these observations the additional ground of appeal raised by assessee is allowed.