Where any person in relation to its business activities has entered into an international transaction or specified domestic transaction in any financial year, then such person who has entered into international / specified domestic transaction have to obtain a report from the Chartered Accountant commonly known as Transfer Pricing Report in a form prescribed by the Income tax department which is to furnished electronically on or before 30th day of November of the assessment year by the Chartered Accountant for the concerned person.
Where any person has entered into an international transaction or specified domestic transaction in any previous year, then the Income tax Officer may make reference to the Transfer Pricing Officer to compute the arm’s length price in relation to said International / specified domestic transaction. The Transfer Pricing Officer may issue notice to the concerned person requiring him to produce such evidence or documents as required / mentioned in the said notice within a period of thirty days from the date of receipt of a notice issued or as specified in the notice.
If such person fails to furnish any such information or document as required , he shall be liable to pay, by way of penalty, a sum equal to two per cent of the value of the international transaction or specified domestic transaction for each such failure.
Where the objections with respect to draft / proposed order of assessment are filed with the Dispute Resolution Panel (DRP), then the DRP before issuing directions, as it thinks fit, for the guidance of the Income tax Officer to enable him to complete the assessment, may make such further enquiry from the concerned person. Bases on reply filed, the DRP issues its report to the Income tax Officer.