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TMI Blog2019 (12) TMI 1153X X X X Extracts X X X X X X X X Extracts X X X X ..... nation of ALP. If the purpose or object of Chapter X and/or Section 10A of the Act is being defeated, then it is up to the legislature, if they think so, to reconstruct the law as per the required object. - there is no need to look into the intention or purpose of the statute or application of reasonable construction. Accordingly, it is meaningless to apply the principles of purposive or object-based rules of interpretation Indeed, in the instant case, albeit the adjustment in the ALP for the year under consideration may be of notional value, and the same may not actually result in an inflow of foreign exchange. But the said proviso to section 92C(4) of the Act shall deter the practice of manipulating the prices as suiting to the parties. - Consequently, the purpose of the provisions of section 10A of the Act will not be defeated. We further note that assessee though claiming the exemption under section 10A of the Act can also manipulate the ALP with an objective to avoid corporate dividend tax by shifting its profits to AE. In the instant case we find that the provisions of chapter X are not impeding with the manner of the computation of exemption under section 10A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 92C. Hence, question posed before the Special Bench is answered in negative against the assessee and in favour of the Revenue. - ITA No(s) 1352/Ahd/2011, 1285/Ahd/2012, 1822/Ahd/2014, 1874/Ahd/2014 - - - Dated:- 24-10-2019 - Justice P.P. Bhatt, President, Shri Rajpal Yadav, Judicial Member, And Shri Waseem Ahmed, Accountant Member For the Assessee : Shri Tushar Hemani, A.R. For the Revenue : Shri O.P. Sharma, CIT. D.R And Shri Vinod Tanwani, Sr.D.R ORDER PER WASEEM AHMED ACCOUNTANT MEMBER: These four appeals have been filed at the instance of the Assessee and Revenue against the separate orders of the Ld. Commissioner of Income-Tax (Appeals)-XIV, Ahmedabad [''Ld.CIT(A) in short] relevant to Assessment Years 2006-07, 2007-08, 2008-09. 2. The Hon'ble President of the Income Tax Appellate Tribunal on a reference made by a Division Bench vide order dated 15-06-2016 constituted this Special Bench under section 255(3) in the above matter to decide the following question of law: Whether or not the provisions of Section 92 can be invok ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C of the Act and claimed that its transactions with the AE are at Arm Length Price. 3.4 The assessee during the assessment proceedings vide letter dated 18/02/2009 also made available the details of the external comparables (CUP) based upon the quotations of Independent Enterprises where the average rate quoted by them figuring at GBP 5.71 per hour was greater than the rate charged from the AE. However, the assessee contended that difference in the rates arrived in pursuing internal CUP method being GBP 5.09 and external CUP method being GBP 5.71, arose due to the unevenness of the terms and conditions between the subject entities and their clients. 3.5 Nevertheless, the TPO rebutted the rationale proffered by the assessee in the above paragraph for preferring the internal CUP method of benchmarking the transaction with the AE, counter-reasoning that services provided to AE and NONAE may be similar, but are unalike in quantity and involve dissimilar markets. As such, the TPO was of the view that CUP method requires a high degree of comparability such as the volume, credit terms, timing geographical area of transaction/services, etc. which is not comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for short ASTSL) (107 ITD 141) and ITAT Mumbai in case of Gharda chemicals Ltd vs. DCIT (2009-TIOL-790- ITAT-Mumbai). Aggrieved by the order of Ld. DRP, the assessee is in appeal before this Tribunal. Before the Division Bench, assessee took the plea that since, it is eligible for tax exemption and not actually chargeable to tax in India, therefore there cannot be any motive to shift the profit from India to U.K. Thus no reference to TPO ought to have been made. The Bench found contradictory orders of the ITAT on the above plea and therefore, recommended the question for determination by the Special Bench. Thus this special bench has been constituted to decide the above-mentioned question. 6.1 Ld. Counsel for the assessee while appraising us with the facts and circumstances very eloquently contended that when an explanation or defence of an assessee based on interpretation of law as well as on number of facts supported by evidence required consideration, whether the explanation is sound or not must be determined not by considering the weight to be attached to each single factor in isolation but by assessing the cumulative effect of all the facts and l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h a view to provide statutory framework, which can lead to computation of reasonable, fair and equitable profits and tax in India, in the cases of such multi-national enterprises, new provisions were introduced in the Income Tax Act. The ld.counsel for the assessee, thereafter brought to our notice Circular Bearing No.12 of 2001 dated 23.8.2001 reported in 251 (Statute) ITR page 15 issued by the CBDT for explaining the purpose and objects of these TP provisions and how they are to be implemented. According to the ld.counsel for the assessee, the CBDT had contemplated that these TP provisions have been incorporated with a view to provide a statutory framework which can lead to computation of reasonable, fair and equitable profits and taxes in India so that the profits chargeable to tax in India did not get diverted elsewhere by altering the price charged and paid in their group concern, leading to erosion of tax revenue. Similarly, he brought to our notice other circulars viz. Circular No.14 of 2001, 8 of 2002 and contended that basic thrust of all these circulars is to propound that new provision was intended to ensure the profit taxable in India are not under-stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 677 and submitted that adjudicator should remember that statutes have some purpose and object to accomplish whose sympathetic and imaginative discovery is the surest guide to their meaning. Thus, rule of reasonable interpretation should be applied. 6.5 In the third fold of contentions, Shri Hemani, the ld.counsel for the assessee has putforth the stand of the assessee as to why earlier Special Bench order of the ITAT in the case of Aztec Software Technology Services Ltd. , 107 ITD 141 be not considered as governing the field. The facts in the case of Aztec Software Technology Services Ltd. (supra) are that the assessee was an Indian company engaged in the business of development and export of software. It was also entitled to deduction under section 10A of the Income Tax Act in respect of profits and again derived from export of software. It has filed its return of income for the Asstt.Year 2002-03 declaring total income at ₹ 44,60,830/- after claiming deduction of ₹ 7,53,69,376/- under section 10A of the Act. Since there were international transactions with associated enterprise exceeding ₹ 5 crores, its case was selected for sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (d)In the absence of any evidence to show that the assessee has paid or received or entitled to receive more than what is accounted for, the reference to the TPO could not be made. (e)The mandatory conditions provided in sub-section (3) to section 92CA have not been followed. (f)The order of the TPO passed under section 92CA is not binding on the Assessing Officer and the Assessing Officer has to I independently verify and convince himself of the legality of the order before any action is taken. 6.6. The ld.CIT(A) considered the contentions of the assessee on these grounds and held that before invoking Chapter X-A there should be existence of an avoidance of tax by way of transfer price mechanism. These provisions cannot be resorted to in a mechanical manner. The AO must demonstrate on the basis of material/information and documents in its possession that there is an avoidance of tax. Secondly, it was held that before embarking on any determination of ALP, the assessing authority has to pass through the process as prescribed under clause (a) to (d) of sub-section 3 of section 92C of the Income Tax Act not only where the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces Ltd. and contended that the ld.counsel for the assessee in the case of Aztec Software Technology Services Ltd. had submitted that even the claim of deduction under section 10A, 10AA and 10B would not alter the situation in so far as answer to the question is concerned. In this background, the Hon ble Special Bench only noted that claim of deduction under section 10A, AA and B would not compel the AO to prima facie demonstrate that there is a tax avoidance before invoking relevant provisions. Thus, this observation was merely an argument by the ld.counsel for the assessee on which the Hon ble Special Bench has expressed its view. It was not expressly adjudicated and would just an obiter which has no binding value. For buttressing his contentions, he relied upon the judgment of Hon ble Gujarat High Court in the case of CIT Vs. Baroda People s Cooperative Bank reported in 280 ITR 282. Similarly, he relied upon the decision of Hon ble Madras High Court in the case of Gerard Perira v. ITO, 389 ITR 547. He placed on record copies of both these decisions in the compilation. The ld.counsel for the assessee further relied upon the decision of Full Bench of Hon ble Andhra Pradesh High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able. In other words, the stand of the assessee on this issue is that Chapter X itself is a machinery provision, first some adjustment in the value of international transaction would be found out by application of machinery provision, and thereafter that will be disqualified for grant of deduction with help of proviso which is one more step down of the machinery provisions. This proviso cannot be given preference over the section 10A of the Act. For buttressing his contentions, again put reliance upon the decision of Hon ble Bombay High Court in the case of Vodafone India Services P.Ltd. (supra). 6.10 In the last fold of contentions, he took all residuary arguments of this issue. According to him, sections 10A/10B/10AA and the TP provisions operate in separate and mutually exclusive sphere. On plain reading of these provisions, it would reveal that neither supersede nor overrule the other one. In a case of overlapping there is no legislative or judicial clarity as to which will prevail over the other. In order to buttress this proposition, he took us through section 10A and submitted that this section provides exemptions on the profits derived from eli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional transaction; but under the TP provisions, transaction between associated enterprises can be recomputed. One of the enterprises is a non-resident, and only upward adjustments are permissible. Thrust of his arguments is that when the AO can accept working of eligible profits of which tax exemption at the rate of hundred percent is being provided under identical regulations as are provided in transfer pricing. In other words, eligible profits is to be computed keeping in mind, the market value of the goods and services transacted by the assessee, and it is to be calculated that even on reasonable basis on which hundred percent exemption to be granted to the assessee, then how same computation will be inadmissible for the purpose of ALP of international transactions, which is identical. In these circumstances, though computation under one Chapter and under one scheme of the Act was not disturbed by the AO, but some computation is being sought to be disturbed for the purpose of TP provisions and on such disturbed result, the assessee has been deprived of exemption under section 10A because of section 92(4) of TP provisions. He culled out the conflicts between both t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ises in India. In other words, tax authorities in India cannot discriminate between the assessee vis- -vis an identical assessee situated in India dealing with identical transaction to other residents in India. Expounding his arguments, he pointed out that when an eligible unit under section 10A of the Act transacts with a related resident, the only action that can be taken is to deduce profit as per section 80IA(8) and 10 of the Act. However, when an eligible unit under section 10 of the Act transacts with a related non-resident, its profit can be re-determined, reduced as per 80IA(10) of the Act, and the transaction price can also be replaced and the assessee s income enhanced under the TP provisions. He drew our attention towards provision to section 92C(4) of the Act wherein it has been provided that if there is an upward adjustment in the ALP of a international transaction, then deduction under section 10A will not be granted on such adjustment. This creates a discrimination between the resident vis- -vis non-resident and in view of Article 26 of Indo-UK DTA, this cannot be allowed to happen. He made reference to the decision of Hon ble Delhi High Court in the case of CIT Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ider the motive of transfer pricing provision is not relevant. 7.5 The power to levy tax is an attribute of Sovereignty. The exercise of this power is controlled by the Constitution wherein Article 265 provides that Taxes not to be imposed save by authority of law. No tax shall be levied or collected except by authority of law. 7.6 Thus, in the case on hand, the tax has been levied even on the undertakings enjoying the benefit of the tax holiday in the circumstances specified under the proviso to section 92C(4) of the Act. Accordingly, the tax in India cannot be subject to tax laws prevailing outside India. 7.7 There are incomes which are chargeable to tax, albeit they do not form part of the total income as understood under section 4 r.w.s. 5 of the Act. These incomes are specified under section 158BA r.w.s. 113, section 68 r.w.s. 115BBE of the Act. Similarly, when the proviso to section 92C(4) of the Act comes into play resulting in a disallowance out of the exempted part of income, allowed under section 10A of the Act, will be subject to tax. 7.8 The ld. DR consented to the proposition put forth by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he argument of the assessee was never that AO should determine motive before invoking Chapter X, but that there cannot be any motive and hence, Chapter X is not to be invoked. 8.2 The question before the Bench in the case of ASTSL was different from the question referred to the present special bench. Hence, it cannot be inferred that the ASTSL case and the present case align with each other. 8.3 The ld. AR also reiterated that while interpreting the provision, one should keep in mind the intent and object of the provision. In the present case, the transfer pricing provisions are intended to prevent shifting of profits outside India, and without establishing such intent, the transfer pricing provisions remain untriggered. 8.4 There is discrimination between a resident assessee and non-resident assessee, within the meaning of section 6 of the Act, which is against the provisions of the DTAA between India and the UK. 8.5 There is a notional/book adjustment on account of the transfer pricing provisions. As such, there will not be any inflow of the foreign currency even when the exemption is denied by virtue of the proviso to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the Legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, on their own terms, ambivalent and do not manifest the intention of the Legislature. 9.2 In the case of Guru Devdata VKSSS Maryadit v. State of Maharashtra , their Lordships of the Apex Court held as under: It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning. It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gard to reading the statute as a whole - appear to be well settled. Under the first principle a casus omissus cannot be supplied by the court except in the case of clear necessity and when reason for it is found in the four corners of the statute itself but at the same time a casus omissus should not be readily inferred and for that purpose all the parts of a statute or section must be construed together and every clause of a section should be construed with reference to the context and other clauses thereof so that the construction to be put on a particular provision makes a consistent enactment of the whole statute. 9.5 We also support and guidance from the judgment in the case of Mathuram Agrawal vs. state of Madhya Pradesh (Appeal (civil) 1990 of 1995) wherein it was held as under: It is not the economic results sought to be obtained by making the provision which is relevant in interpreting a fiscal statute. Equally impermissible is an interpretation which does not follow from the plain, unambiguous language of the statute. Words cannot be added to or substituted so as to give a meaning to the statute which will serve the spirit and int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ook into the object or intention of the Legislature by resorting to the aids of interpretation where the language used in the statute is clear and free from any ambiguity. To strengthen our findings, we also find support and guidance from the Apex court in case of M/s Rishabh agro industries Ltd vs. P.N.B. Capital services Ltd. (5 SCC 515) (2000) wherein it was held as under: While interpreting, this Court only interprets the law and cannot legislate it. If a provision of law is misused and subjected to the abuse of process of law, it is for the Legislature to amend modify or repeal it by having recourse to appropriate procedure, if deemed necessary. 9.8 Now, the controversy in the instant case is disguised in the question as to whether the provisions of chapter X shall be invoked in a situation where the assessee is enjoying tax exemption under section 10A of the Act and/or where there is no motive to avoid tax. We find that the purpose of enacting transfer pricing provisions was to put a stop to the avoidance of tax by shifting taxable income outside India. Similarly, extending the fundamental of intendment to section 10A of the Act, we comprehen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saction or specified domestic transaction has actually been undertaken shall be deemed to be the arm's length price : Provided also that where more than one price is determined by the most appropriate method, the arm's length price in relation to an international transaction or specified domestic transaction undertaken on or after the 1st day of April, 2014, shall be computed in such manner as may be prescribed and accordingly the first and second proviso shall not apply. Explanation.-For the removal of doubts, it is hereby clarified that the provisions of the second proviso shall also be applicable to all assessment or reassessment proceedings pending before an Assessing Officer as on the 1st day of October, 2009. (2A) Where the first proviso to sub-section (2) as it stood before its amendment by the Finance (No. 2) Act, 2009 (33 of 2009), is applicable in respect of an international transaction for an assessment year and the variation between the arithmetical mean referred to in the said proviso and the price at which such transaction has actually been undertaken exceeds five per cent of the arithmetical mean, then, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Provided that no deduction under section 10A or section 10AA or section 10B or under Chapter VI-A shall be allowed in respect of the amount of income by which the total income of the assessee is enhanced after computation of income under this sub-section : Provided further that where the total income of an associated enterprise is computed under this sub-section on determination of the arm's length price paid to another associated enterprise from which tax has been deducted or was deductible under the provisions of Chapter XVIIB, the income of the other associated enterprise shall not be recomputed by reason of such determination of arm's length price in the case of the first mentioned enterprise. ..... 92CA. (1) Where any person, being the assessee, has entered into an international transaction or specified domestic transaction in any previous year, and the Assessing Officer considers it necessary or expedient so to do, he may, with the previous approval of the Principal Commissioner or Commissioner, refer the computation of the arm's length price in relation to the said international transaction or specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer and to the assessee. (3A) Where a reference was made under sub-section (1) before the 1st day of June, 2007 but the order under sub-section (3) has not been made by the Transfer Pricing Officer before the said date, or a reference under sub-section (1) is made on or after the 1st day of June, 2007, an order under sub-section (3) may be made at any time before sixty days prior to the date on which the period of limitation referred to in section 153, or as the case may be, in section 153B for making the order of assessment or reassessment or recomputation or fresh assessment, as the case may be, expires: Provided that in the circumstances referred to in clause (ii) or clause (x) of Explanation 1 to section 153, if the period of limitation available to the Transfer Pricing Officer for making an order is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to have been extended accordingly. (4) On receipt of the order under sub-section (3), the Assessing Officer shall proceed to compute the total income of the assessee under sub-section (4) of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9.11 Thus, the proviso itself vividly reflects the intent of lawmakers that the provisions of chapter X of the Act shall prevail in all the cases of international transactions falling under the umbrella of section 92 of the Act including the income-qualified for exemption under section 10A of the Act. In other words, it can be said that the intention of the statute was very much lucid that section 92 of the Act should be invoked even when the assessee is entitled to deduction u/s 10A of the Act. In the light of above perceivance, we are of the view that there is no need to refer to other means of interpretation if the words are clear and free from any ambiguity. However, if the words in the statute are vague and ambiguous, then external aid may be consulted for interpretation. This connotes that the statute should be read as a whole; therefore, the point which is not clear in one section may be explained in another section. 9.12 Accordingly, we are also of the view that if the purpose or object of Chapter X and/or Section 10A of the Act is being defeated, then it is up to the legislature, if they think so, to reconstruct the law as per the required ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o its plain grammatical sense without addition or deletion of any words. As a general principle of interpretation, where the words of a statute are plain, precise and unambiguous, the intention of the Legislature is to be gathered from the language of the statute itself and no external evidence such as Parliamentary Debates, Reports of the Committees of the Legislature or even the statement made by the Minister on the introduction of a measure or by the framers of the Act is admissible to construe those words. It is only where a statute is not exhaustive or where its language is ambiguous, uncertain, clouded or susceptible of more than one meaning or shades of meaning, that external evidence as to the evils, if any, which the statute was intended to remedy, or of the circumstances which led to the passing of the statute may be looked into for the purpose of ascertain- ing the object which the Legislature had in view in using the words in question. In view of the above, the Finance Minister speech and memorandum explaining the bill will not provide any aid to the assessee in the given facts circumstances. 10. In the context of the CBDT Circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gaged in devevelping software as also in processing or assembling. 24. Under the existing provisions of section 10A of the Income-tax Act, any profits and gains of an industrial undertaking engaged in the manufacture or production of articles or things in a free trade zone are exempt from tax for a certain number of years. With a view to providing further incentives for earning foreign exchange, it is proposed to clarify that manufacture for the above purposes will include the activities of processing and assembling. It will further include recording of programmes on any disc, tape, perforated media or other information storage device. The amendment will take effect retrospectively from 1st April, 1981, and will, accordingly, apply in relation to the assessment year 1981-82 and subsequent years. 10.2 From the above, it is clear that the spirit behind introducing section 10A was to bring foreign exchange in India. Granting exemption from Tax under section 10A of the Act was incidental and not the main object. Furthermore where amount fetched by the Indian AE as revenue and/or the amount paid to its counter-part, AE o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only in response to the argument placed by the ld. Counsel for the assessee regarding the invocation of chapter X with respect to the assessee enjoying 100% tax exemption under section 10A of the Act. Accordingly, no specific question, for invoking the provision of section 92 of the Act, was raised before the ITAT with respect to the assessee claiming the deduction/exemption under section 10A of the Act. Therefore, the observations/findings given in this regard by the Hon ble special bench are obiter dicta and hence hold no binding value. 11.1 In this regard, we note that the relevant finding of the ITAT in the case of ASTSL (supra) to hold it as ratio decidendi has to pass the test as detailed under: i. Find out the proposition considered as to be ratio decidendi. ii. Remove the proposition from the judgment or reverse its meaning. iii. Observe whether the judgment in the absence of such a proposition is still for good. iv. If yes, then such a proposition cannot be categorized as ratio decidendi irrespective of the fact it was the relevant proposition. 11.2 If we apply the steps above to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts holding company. The Assessing officer does not deal with this objection/issue before referring the matter to the TPO. The TPO does not deal with the above objection on the ground that in terms of Section 92CA, his mandate is only to compute the ALP in relation to the International Transaction. The TPO in the impugned order dated 28 January 2012 meets the petitioner's objection by stating that the same would be dealt with by the Assessing Officer. However, when the same objection was raised before the Assessing Officer post the order of the TPO, the Assessing Officer does not consider the same in the impugned draft assessment order dated 22 March 2013 on the ground that in view of Section 92 CA (4) , the Assessing Officer is obliged to pass an order in conformity with the ALP determined by the TPO. This jurisdictional issue has to be dealt with either by the TPO or the Assessing Officer when specifically raised by the petitioner/assessee. 12.1 However, it is also pertinent to mention here that the facts of the case giving rise to the question pleaded before this bench and in case of Vodafone (supra) are different. In that case, it was held, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n terms of the instruction No. 15/2015 and instruction No. 3/2016 which replaced the earlier one, to the assessee before referring to TPO owing to the fact that the assessee was covered by section 10A of the Act and also objected to the applicability of chapter-X of the Act. In this regard, we note that the auditor of the assessee company did not make any qualifying remarks that the impugned international transactions do not impact its income as required in the instruction above. Thus in the absence of such remarks by the auditor in his report u/s 92E of the Act, we are not inclined to uphold the contention of the Ld. AR regarding the instructions issued by the CBDT. 13.1 The Ld. AR has in his rejoinder counter-argued the allegation put forth by the Ld. DR that no objection was posed by the assessee before AO while reference was made to the TPO stating that although the assessee did not object to the reference initially, he raised a contention before the Ld. DRP which can be deemed to have been posed to AO. 13.2 In our humble understanding, the contention of Ld. AR is not in accordance of instruction No. 15 of 2015 as replaced by Instruction No 3 of 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only in the case where there has been an international transaction between the assessee and the associated person. Such a question in a given case may also be highly disputed question. However, we do not find that under the scheme of the provision contained in Chapter-X of the Act, the Assessing Officer is obliged to grant hearing to the assessee, invite and consider the objections with respect to the question whether during the previous year relevant to the assessment year under consideration, there had been any international transaction between the assessee and the associated enterprise before making a reference to the TPO. Such opinion the Assessing Officer would have to form on the basis of available material on record and such opinion would be having ad-hoc finality in the sense that for the purpose of reference to the TPO and till the stage that the TPO passes an order under subsection (3) of Section 92CA of the At, such issue would be closed. 14. Before making any such reference, sub-section (1) of Section 92C itself provides certain inbuilt safeguards. Firstly, the Assessing Officer has to consider it necessary or expedient to make a reference to the TPO an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to be imposed save by authority of law No tax shall be levied or collected except by authority of law. 14.2 In this regard, we also find it relevant to refer the OECD guidelines which provide as under: 1.8 There are several reasons why OECD member countries and other countries have adopted the arm's length principle. A major reason is that the arm's length principle provides broad parity of tax treatment for members of MNE groups and independent enterprises. Because the arm's length principle puts associated and independent enterprises on a more equal footing for tax purposes, it avoids the creation of tax advantages or disadvantages that would otherwise distort the relative competitive positions of either type of entity. In so removing these tax considerations from economic decisions, the arm's length principle promotes the growth of international trade and investment. 14.3 As a consequence, in consonance with the aforementioned article and OECD extracts, it is manifestly clear that tax laws in India cannot be subjected to tax laws of a Foreign country. 14.4 We further note that to maintain h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es in different domains and has different objects. As such, none of the provision has neither been made subject to each other nor superseded by each other. Therefore we are of the view that the question of two views about the interpretation to section 10-A viz a viz chapter-X in the given facts and circumstances does not arise. But these provisions co-exits and their concordance are facilitated by the proviso to section 92C(4) of the Act. As such, there is a direct provision under chapter X of the Act restricting the deduction/ exemption to the assessee in this particular case, which will prevail in the given facts circumstances. 17. At one point of hearing the Ld. DR also argued to reframe the question as discussed above; we note that the question framed referred to the special bench was approved by the order of the ITAT dated 15-4-2016. The relevant extract of the order is reproduced as under: Whether or not the provisions of Section 92 can be invoked in a situation in which income of the assessee is eligible for tax exemption or tax holiday and thus not actually chargeable to tax in India, or in a situation in which there cannot be any motive in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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