2024 (5) TMI 589 - AT - Income Tax

TP Adjustment - upward adjustment in respect of Specified Domestic Transactions - whether Section 92BA(i) would be applicable, particularly when the said section was omitted from the statute by the Finance Act, 2017 w.e.f. 01.04.2017? - HELD THAT - It is a settled principle of law that when a particular provision is repealed from the statue, the normal effect would be to obliterate it from the statute book as completely as if it had never been passed and the statute must be considered as a law that never existed. In a case where a particular provision in a statute is unconditionally omitted and in its place another provision dealing with the same contingency is introduced without a saving clause in favour of pending proceedings, then it can be reasonably inferred that the intention of the legislature is that the pending proceeding shall not continue, but fresh proceedings for the same purpose may be initiated under the new provision. If that be so, then since the Clause (i) of Section 92BA was omitted by Finance Act, 2017 w.e.f. 01.04.2017 from the statute, the same cannot be made applicable in the pending proceeding. It is, therefore, to be considered non-est in the concerned statute as if it had never been passed. Thus once the said clause being omitted w.e.f. 01.04.2017, the decision made by AO/TPO invoking such Section 92BA is without any basis, and/or jurisdiction, invalid and bad in law and thus, the same is liable to be quashed. No justification in the order passed by the TPO/AO making upward adjustment invoking Section 92BA(i) of the Act, in the present facts and circumstances of the case, particularly when the said section stood omitted w.e.f. 01.04.2017 from the statute itself. Hence, we find that the order passed by the TPO/AO is without any basis, void ab initio and without jurisdiction. We, therefore, uphold the order passed by the CIT(A) deleting the upward adjustment made by the TPO/AO u/s 92BA of the Act in respect of Specified Domestic Transactions . Decided against revenue.

Summary

Issues involved: Appeal by Revenue against CIT(A) order regarding upward adjustment in specified domestic transactions u/s 143(3) r.w.s. 144C of the Income-tax Act, 1961 for AY 2015-16.

Summary:
1. The Revenue appealed against the CIT(A)'s order deleting the upward adjustment of Rs. 3,45,39,464/- in specified domestic transactions.
2. The CIT(A) held that the transactions were not international and hence not covered u/s 92BA of the Act.
3. The Revenue contended that the CIT(A) erred in deleting the adjustment.
4. The assessee cited the judgment of the Hon'ble Karnataka High Court and other ITAT benches to support their case.
5. The Revenue supported the order of the TPO and Assessing Officer.
6. The Tribunal considered the applicability of Section 92BA(i) post its omission from the statute by the Finance Act, 2017.
7. It was held that the omission of Section 92BA(i) rendered the decision by the AO/TPO invoking it as invalid and without jurisdiction.
8. Relying on the Karnataka High Court's judgment, the Tribunal upheld the CIT(A)'s decision to delete the upward adjustment.
9. The Tribunal dismissed the Revenue's appeal, declaring the TPO/AO's order as void ab initio and without jurisdiction.

Order pronounced on 10th May, 2024 at Ahmedabad.