AO Inquiry Power

Section 172 — - AO INQUIRY POWER

Section 172 grants AO / TPO the procedural power to require TP documentation, books of account, related-party records, FAR details, comparable working, etc. from assessee. The AO can issue notice under s. 142(1) requiring information; failure invokes penalty under s. 270A. The provision works in tandem with s. 171 documentation requirement -- assessee must maintain (s. 171) AND must produce on demand (s. 172).

PROCEDURAL ARCHITECTURE

AO / TPO may issue notice requiring assessee to furnish: (a) TP documentation (Rule 10D); (b) Master File (Rule 10DA); (c) CbC Report (Rule 10DB); (d) accounting records of AE; (e) FAR analysis; (f) comparables search documentation; (g) any other information. Assessee must comply within stipulated time. Documentation must be in PRESCRIBED FORMAT (English / electronic). Multi-year coverage commonly demanded for AO-led TP audits. Penalties: non-compliance triggers s. 271AA (INR 1L general), s. 271BA (INR 1L Form 3CEB), s. 270A (concealment 200%); cross-references to documentation-specific penalties under s. 171. Practitioner: maintain TP file at ready-state (current 8 years -- statutory retention); have CA / TP-consultant on retainer for rapid response.

CROSS-REFERENCES

• Section 171 -- TP documentation.
• Section 142(1) -- AO inquiry.
• Section 270A -- penalty.
• Form 3CEB / 3CEAA / 3CEAD -- AO-required forms.