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TMI Blog2020 (6) TMI 629X X X X Extracts X X X X X X X X Extracts X X X X ..... ere a provision of an Act is omitted by an Act and the said Act simultaneously reenacts a new provision which substantially covers the field occupied by the repealed provision with certain modification, in that event such re-enactment is regarded having force continuously and the modification or changes are treated as amendment coming into force with effect from the date of enforcement of the reenacted provision. We are of the view that at this juncture it is necessary to examine, the meaning of saving clause, As Per the law.Com Law Dictionary Black s Law Dictionary 2nd Ed, the saving clause has been defined as follows: A saving clause in a statute is an exception of a special thing out of the general things mentioned in the statute; it is ordinarily a restriction in a repealing act which is intended to save rights pending proceedings penalties etc. from the annihilation which would result from an unrestricted repeal. In contracts it is a clause that states that ambiguities should not render a contract void or voidable but the contract should be enforced in all other respects provided it can still exist as a valid and binding agreement. Thus, the Saving clause means a clause which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ld. PCIT passed order u/s. 263 on 28.03.2019. Since clause (i) of section 92BA was unconditionally omitted without a saving clause in favour of Pending Proceedings therefore ld. PCIT ought not to have proceeded u/s. 263 of the Act, since the omission took place prior to 08.03.2019 and such omission in clause (i) of section 92BA is unconditional, that is, it does not say that Pending Proceedings under clause (i) of section 92BA would continue in future, even after its omission on 01.04.2017. Therefore, Ld. PCIT erred in exercising his jurisdiction u/s. 263 of the Act, so far clause (i) of section 92BA is concerned, reason being, in the eyes of law after omission of clause (i) of section 92BA, it would be treated as if it never existed in the Statute Book. In other words, clause (i) of section 92BA, was omitted w.e.f 1.4.2017 unconditionally and without a saving clause therefore section 6 of the General Clauses Act has no application. We note that ld PCIT issued the above show cause notice u/s 263 in respect of specified domestic transactions referred to in clause (i) of section 92BA of the Act which was omitted with effect from 01.04.2017, and effect of such omission of clause (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , circumstances, natural justice, equity and all other known principles of law. 2.The CIT erred in assuming jurisdiction u/s 263 without first satisfying that the assessment order was erroneous and prejudicial to interest of revenue. 3.The CIT erred in issuing the notice u/s 263 when the order was not prejudicial to the interest of revenue 4.The CIT erred in issuing the notice u/s 263 when the order was not erroneous. 5.The Ld CIT erred in assuming jurisdiction u/s 263 by issuing notice on 20.11.2018 6.The order passed u/s 263 passed by Ld CIT dated 08.03.2019 is erroneous having regard to the facts, circumstances and law on the issue. 7.The Ld CIT erred in holding the order passed by the ld AO as prejudicial to interest of revenue and erroneous and issuing direction to the AO to pass assessment order de novo." 4.The assessee has raised the following grounds of appeal in ITA No.1035/Kol/2019 (M/s Srinath Ji Furnishing Pvt. Ltd.) assessment year 2014- 15: "1. For that the order of the Hon'ble Pr. Commissioner of Income Tax is arbitrary, illegal and bad in law. 2. For that the Hon'ble Pr. Commissioner of Income tax erred in taking conclusion that it is mandat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, ld Principal Commissioner of Income Tax (Ld.PCIT) had examined the assessment records of the assessee with reference to the evidence brought on record by the Assessing Officer during the course of assessment proceedings. During examination of assessment records it was observed from the Form NO.3CEB that the assessee company had entered into specified domestic transactions amounting to ₹ 34,82,67,956/- which were required to be referred to the Transfer Pricing Officer by the Assessing officer after obtaining the approval of the Pr. Commissioner of Income Tax as per section 92CA of the Income Tax Act,1961 but the same was not done by the Assessing Officer. Therefore, ld PCIT was of the view that the benchmarking of the domestic transaction undertaken by the assessee with the specified domestic parties was not done as per the statute for determining the Arm's Length Price(ALP). In view of the above facts, the ld PCIT took a view that the order passed by the Assessing Officer was erroneous in so far as it is prejudicial to the interests of revenue. Hence, proceedings u/s 263 were initiated for A Y 2014-15. During the course of the said proceedings the assessee was given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... derably increased the compliance burden of the taxpayer. In order to reduce the compliance burden of taxpayers, it is proposed to provide that expenditure in respect of which payment has been made by the assessee to a person referred to in under section 40A(2)(b) are to be excluded from the scope of section 92BA of the Act. Accordingly, it is also proposed to make a consequential amendment in section 40A(2)(b) of the Act. Since clause (i) has been omitted by Finance Act, 2017, w.e.f 01.04. 2017 and effect of this omission is that said clause (i) was never existed in the statute book therefore ld PCIT cannot exercise the jurisdiction u/s 263 of the Act" 7. However, ld PCIT rejected the contention of the assessee and held that since the Assessing Officer failed to refer the specified domestic transactions to the Transfer Pricing Officer as per Section 92CA of the I.T.Act,1961, the above said transactions remained un-benchmarked as per the provisions of the section 92CA of the Act In such a circumstances, the Arm's Length Price (ALP) remained undetermined because of the non-application of the Function, Asset, Risk ((FAR) analysis etc. Resultantly, the specified domestic transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Co. Vs. Asstt. CIT (2002) 257 ITR 338 (SC) were overruled by the Hon`ble Supreme Court by its subsequent judgments in the case of M/s. Shree Bhagwati Steel Rolling Mills vs. C.I.T. Excise & Others - 2015(326) ELT 209(S.C.), and M/s. Fibre Boards 62 Taxmann.com 135 (S.C.), therefore, the assessee can not use them in his favour. In addition to these verbal arguments, Shri Vijay Shankar, (CIT-DR) submitted written submissions before the Bench, the same is reproduced below, in brief, to the extent applicable for our discussion: "In the present case, the Principal Commissioner of Income Tax-5, Kolkata passed an order u/s.263 holding that specified domestic transactions shown by the assessee were not taken into cognizance by the A.O. and not referred to the TPO before completing the assessment, which he was required to do statutorily, for the correct Benchmarking of the domestic transactions undertaken by the assessee with specified domestic parties. The notice for 263 proceedings was issued dated 20.11.2018. The assessee is contesting the jurisdiction of the Pr. C.I.T.-5, Kolkata in initiating proceedings u/s.263 on the ground that the reference to the TPO on the specified domestic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fect the continuance of any such amendment made by the enactment so repealed and in operation at the time of such repeal." Copy of General Clause Act, 1897 enclosed as Annexure-A 1. The following decisions, (1) M/s. Shree Bhagwati Steel Rolling Mills vs. C.I.T. Excise & Others - 2015(326) ELT 209(S.C.), M/s. Fibre Boards 62 Taxmann.com 135 (S.C.) interpret the matter in favour of the Revenue's stand that omission of a provision shall have to be interpreted as per sec.6 and sec.6A of GCA 1897 and read in togetherness. For proceedings which stem from the omitted provision, or part thereof, including consequential proceedings, it shall not mean an obliteration from the very beginning; it will have the effect as if the omitted part is in full force before such omission of the provision, or part thereof. The Hon'ble Bangalore Bench in the case of M/s. Texport Overseas Pvt. Ltd. (supra) has given the finding on the basis of Apex Court decision in the case of General Finance Company 257 ITR 338. This is an old decision pronounced on 04/09/2002. However, it may kindly be pointed out that the Hon'ble Bench of Bangalore Tribunal did not take into consideration the subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of which payment has been made or is to be made to a person referred to in clause (b) of sub-section (2) of section 40A." Clause (i) of section 92BA of the Act, inter alia provides that any expenditure in respect of which payment has been made by assessees to certain "specified person" under section 92BA are covered within the ambit of specified domestic transactions. As a matter of compliance and reporting, taxpayers need to obtain the chartered accountant`s certificate in Form 3CEB providing the details such as list of related parties, nature and value of specified domestic transactions, method used to determine the arm`s length price for specified domestic transactions, positions taken with regard to certain transactions not covered as specified domestic transactions etc. This has considerable increased the compliance burden of the taxpayers. In order to reduce the compliance burden of the taxpayers, it was proposed by the Finance Act 2017 to provide that expenditure in respect of which payment has been made by the assessee to a person referred to in section 40A(2)(b) are to be excluded from the scope of section 92BA of the Act. The whole object of the omission of claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find useful guidance from the judgment of the Hon`ble Supreme Court in the case of Rayala Corporation (P) Ltd (1970 AIR 494) wherein the Hon`ble Supreme Court has defined the terminology "omission" and "Repeal" and distinguished these terminologies also. The relevant para of the judgment is reproduced below: "The argument of Mr. Sen was that, even if there was a contravention of R. 132A(2) by the accused when that Rule was in force, the act of contravention cannot be held to be a "thing done or omitted to be done under that rule," so that, after that rule has been omitted, no prosecution in respect of that contravention can be instituted. He conceded the possibility that, if a prosecution had ,already been started while R. 132A was in force, that prosecution might have been competently continued. Once the Rule was omitted altogether, no new proceeding by way of prosecution could be initiated even though it might be in respect of an offence committed earlier during the period that the rule was in force. We are inclined to agree with the submission of Mr. Sen that the language contained in clause 2 of the Defence of India (Amendment) Rules, 1965 can only afford protectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n operation, because his trial and conviction take place after the regulation expired ?" The Privy Council took notice of sub- s. (3) of section 11 of the Emergency Powers (Defence) Act, 1939 which laid down that "the expiry of this Act shall not affect the operation thereof as respects things previously done or omitted to be done". It was argued before the Privy Council that the phrase "things previously done" does not cover offences previously committed. This argument was rejected by Viscount Simon on behalf of the Privy Council and it was held that the appellant in that case could be convicted in respect of the offence which he had committed when the regulation was in force. That case, however,is distinguishable from the case before us inasmuch as, in that case, the saving provision laid down that the operation of that Act itself was not to be affected by the expiry as respects things previously done or omitted to be done. The Act could, therefore, be held to be in operation in respect of acts already committed, so that the conviction could be validly made even after the expiry of the Act in respect of an offence committed before the expiry. In the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and it ceases to have any further effect. Therefore, offences committed against temporary Acts must be prosecuted and punished before the Act expires and as soon as the Act expires any proceedings which are being taken against a person will ipso facto terminate." The Court cited with approval the decision in the case of Wicks v. Director of Public Prosecutions(4), and held that, in view s. 1 (4) of the Defence of India Act, 1939, as amended by Ordinance No. XII of 1946, the prosecution for a conviction for an offence committed when the Defence of India Act was in force, was valid even after the Defence of India Act had ceased to be in force. That case is, however, distinguishable from the case before us in two respects. In that case, the prosecution had been started before the Defence of India Act ceased to be in force and, secondly, the language introduced in the amended sub-s. (4) of s. 1 of the Act had the effect of making applicable the principles laid down in s. 6 of the General Clauses Act, so that a legal proceeding could be instituted even after the repeal of the Act in respect of an offence committed during the time when the Act was in force. As we have indicated ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst a person will ipso facto terminate. Argument advanced by Shri Vijay Shankar, (CIT-DR), on behalf of the Revenue was that the prosecution/penalty in respect of clause (i) of section 92BA of the Act, was in force in assessment year 2014-15, and therefore it is valid even after 01.04.2017, [when the clause(i) was omitted]. We do not agree with ld DR for the Revenue because omitted clause (i) of section 92BA of the Act, does not contain any condition/ saving clause to the effect that a legal proceeding could be instituted even after the omission of clause (i) of section 92BA of the Act. It is clear that when clause (i) of section 92BA was omitted, the Legislature did not make any provision that any prosecution/penalty committed under clause (i) of section 92BA of the Act, would continue to remain punishable even after its omission w.e.f. 01.04.2017, therefore, in the absence of such condition/ saving clause it would be presumed that clause (i) of section 92BA had obliterated from the inception, that is, it would be presumed that clause (i) of section 92BA was never existed in the statute book. 13. We note that the Hon`ble Supreme Court in the case of Kolhapur Canesugar Works Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision to a case of repeal of a `Rule'. The position will not be different even if the rule has been framed by virtue of the power vested under an enactment; it remains a `rule' and takes its colour from the definition of the term in the Act (General Clauses Act). At the cost of repetition we may say that the omissions in the judgment in M/s Rayala Corporation (supra) pointed out in paragraph 17 of the Judgment of the full Bench have no substance as they are not relevant for determination of the question raised for the reasons stated herein. 31. In paragraph 21 of the judgment the Full Bench has noted the decision of a Constitution Bench of this Court in Chief Inspector of Mines v. K.C. Thapar, AIR 1961 SC 838 and has relied upon the principles laid down therein. The Full Bench overlooked the position that was a case under section 24 of the General Clauses Act which makes provision for continuation of orders, notification, scheme, rule, form or bye-law, issued under the repealed Act or Regulation under an Act after its repeal and re-enactment. In that case section 6 did not come up for consideration. Therefore the ratio of that case is not applicable to the present ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re overruled. In the case in hand Rule 10 or Rule 10-A is neither a "Central Act" nor a "Regulation" as defined in the Act. It may be a Rule under Section 3(51) of the Act. Section 6 is applicable where any Central Act or Regulation made after commencement of the General Clauses Act repeals any enactment. It is not applicable in the case of omission of a "Rule". The position is well known that at common law, the normal effect of repealing a statute or provision is 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. To this rule, an exception is engrafted by the provisions Section 6(1). If a provision of a statute is unconditionally omitted without a saving Clause in favour of pending proceedings, all actions must stop where the omission finds them, and if final relief has not been granted before the omission goes into effect, it cannot be granted afterwards. Savings of the nature contained in Section 6 or in special Acts may modify the position. Thus the operation of repeal or deletion as to the future and the past largely depends on the savings applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the omission finds them, and if final relief has not been granted before the omission goes into effect, it cannot be granted afterwards. Savings of the nature contained in Section 6 or in special Acts may modify the position. Thus, the operation of repeal or deletion as to the future and the past largely depends on the savings applicable. In a case where a particular provision in a statute is 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 a fresh proceeding for the same purpose may be initiated under the new provision. Case before us is that the clause(i) of section 92BA is unconditionally omitted without a saving Clause in favour of pending proceedings therefore ld PCIT cannot exercise the jurisdiction under section 263 of the Act. 14. Our view is also fortified by the judgment of the Hon`ble Supreme Court in the case of General Finance Co. 257 ITR 338 (SC), wherein the Hon`ble Supreme Court relied on its previous judgments in the case of Rayala Corpora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgments of Hon`ble Supreme Court, which were relied by the assessee in its favour, in the case of Kolhapur Canesugar Works Ltd. V Union of India (2002) 2 SCC 536 and in Royala Corporation P. Ltd. V Director of Enforcement (1969) 2 SCC 412 and in the case of General Finance Co. Vs. Asstt CIT (2002) 257 ITR 338 (SC) were overruled by the Hon`ble Supreme Court by its subsequent judgments in the case of M/s. Shree Bhagwati Steel Rolling Mills vs. C.I.T. Excise & Others - 2015(326) ELT 209(S.C.), and M/s. Fibre Boards 62 Taxmann.com 135 (S.C.), therefore, the assessee cannot use them in his favour. 16. Regarding the first grievance of ld DR to the effect that in the assessment year 2014-15, the clause (i) of section 92BA was in force therefore, the exercise of the jurisdiction under section 263 of the Act during the currency of the Act is very much valid. The said issue has been already addressed by us in para 12 of this order, hence we do not repeat the same for the sake of brevity. 17. Regarding second grievance of ld DR who relied on the following two judgments of Hon`ble Supreme Court, namely: (1) M/s. Shree Bhagwati Steel Rolling Mills vs. C.I.T. Excise & Others - 2015(326) ELT 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hellip;……………………………….. 43. We are in broad agreement with the Karnataka High Court view as it is clear that the load capacity of an induction furnace unit is certainly relevant material referred to in Rule 3(2) to determine the capacity of the furnace installed. It is obvious that it is not necessary to state such load capacity in terms for it to be included in Rule 3(2). Agreeing therefore with the Karnataka High Courts view we set aside the judgment of the Punjab and Haryana High Court and declare that a Chartered Engineer Certificate dealing with the sanctioned electrical load for a furnace is a relevant consideration which can be looked at in the absence of other factors mentioned in Rule 3. This appeal is disposed of accordingly. 44. Conclusion We have declared in this judgment that the interest and penalty provisions under the Rules 96ZO, ZP, and ZQ of the Central Excise Rules, 1994 are invalid for the reasons assigned in the judgment. Accordingly, the appeals filed by the Revenue are dismissed and the appeals filed by the assessees are allowed to the extent indicated above. It may be noted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is repealed and re-enacted with or without modification. The idea of Section 24 of the General Clauses Act is, as its marginal note shows, to continue uninterrupted subordinate legislation that may be made under a Central Act that is repealed and reenacted with or without modification. It being clear in the present case that Section 280ZA which was repealed by omission and re-enacted with modification in section 54G, the notification declaring Thane to be an urban area dated 22.9.1967 would continue under and for the purposes of Section 54G. It is clear, therefore, that the impugned judgment in not referring to section 24 of the General Clauses Act at all has thus fallen into error. 19. But then Shri Arijit Prasad put before us two roadblocks in the form of two Constitution Bench decisions. He cited Rayala Corporation (P) Ltd. and M.R. Pratap v. Director of Enforcement, New Delhi, (1969) 2 SCC 412 which was followed in Kolhapur Canesugar Works Ltd. & Anr. v. Union of India & Ors., (2000) 2 SCC 536. He argued based upon these two judgments that an "omission" would not amount to "repeal" and that since the present case was concerned with the omission of Section 280ZA, Section 24 wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ein. The Full Bench overlooked the position that that was a case under Section 24 of the General Clauses Act which makes provision for continuation of orders, notification, scheme, rule, form or bye-law, issued under the repealed Act or regulation under an Act after its repeal and re-enactment. In that case Section 6 did not come up for consideration. Therefore the ratio of that case is not applicable to the present case. With respect we agree with the principles laid down by the Constitution Bench in Rayala Corpn. Case [(1969) 2 SCC 412 : (1970) 1 SCR 639]. In our considered view the ratio of the said decision squarely applies to the case on hand." 23. The Kolhapur Canesugar Works Ltd. judgment also concerned itself with the applicability of Section 6 of the General Clauses Act to the deletion of Rule 10 and 10A of the Central Excise Rules on 6th August, 1977. 24. An attempt was made in General Finance Company & Anr. v. Assistant Commissioner of Income Tax, Punjab, (2002) 7 SCC 1 to refer these two judgments to a larger bench on the point that an omission would not amount to a repeal for the purpose of Section 6 of the General Clauses Act. Though the Court found substance in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons would be binding upon us. But we find that once it is held that Section 6 of the General Clauses Act would itself not apply to a rule which is subordinate legislation as it applies only to a Central Act or Regulation, it would be wholly unnecessary to state that on a construction of the word "repeal" in Section 6 of the General Clauses Act, "omissions" made by the legislature would not be included. Assume, on the other hand, that the Constitution Bench had given two reasons for the non-applicability of Section 6 of the General Clauses Act. In such a situation, obviously both reasons would be ratio decidendi and would be binding upon a subsequent bench. However, once it is found that Section 6 itself would not apply, it would be wholly superfluous to further state that on an interpretation of the word "repeal", an "omission" would not be included. We are, therefore, of the view that the second so-called ratio of the Constitution Bench in Rayala Corporation (P) Ltd. cannot be said to be a ratio decidendi at all and is really in the nature of obiter dicta. 28. Secondly, we find no reference to Section 6A of the General Clauses Act in either of these Constitution Bench judgments. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatutory construction is concerned, it is one of the cardinal principles of the law that there is no distinction or difference between an express provision and a provision which is necessarily implied, for it is only the form that differs in the two cases and there is no difference in intention or in substance. A repeal may be brought about by repugnant legislation, without even any reference to the Act intended to be repealed, for once legislative competence to effect a repeal is posited, it matters little whether this is done expressly or inferentially or by the enactment of repugnant legislation. If such is the basis upon which repeals and implied repeals are brought about it appears to us to be both logical as well as in accordance with the principles upon which the rule as to implied repeal rests to attribute to that legislature which effects a repeal by necessary implication the same intention as that which would attend the case of an express repeal. Where an intention to effect a repeal is attributed to a legislature then the same would, in our opinion, attract the incident of the saving found in Section 6 for the rules of construction embodied in the General Clauses Act are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. This Court found that Section 24 of the General Clauses Act would apply to such omission and re-enactment. The Court has stated as follows: "As noticed earlier, the omission of Section 2(27) and re-enactment of Section 80-JJ was done simultaneously. It is a very well-recognized rule of interpretation of statutes that where a provision of an Act is omitted by an Act and the said Act simultaneously re-enacts a new provision which substantially covers the field occupied by the repealed provision with certain modification, in that event such re-enactment is regarded having force continuously and the modification or changes are treated as amendment coming into force with effect from the date of enforcement of the re-enacted provision. Viewed in this background, the effect of the re-enacted provision of Section 80-JJ was that profit from the business of livestock and poultry which enjoyed total exemption under Section 10(27) of the Act from Assessment Years 1964-65 to 1975-76 became partially exempt by way of deduction on fulfilment of certain conditions." (At para 12) 35. For all the aforesaid reasons, we are therefore of the view that on omission of Section 280ZA and its re-enac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the word 'purchase'. The expression 'purchased' used in sub-clause (a) of section 54G of the Act requires to be understood as the domain and control given to the assessee. In the present case, it is not in dispute that the assessee has paid advance amount for acquisition of land, plant, building and machinery, etc., within the time stipulated in the Section, but it is not the case of the assessee that after such payment of advance amount, it has taken possession of land and building, plant and machinery. In our view, if the argument of the learned Senior Counsel for the assessee is accepted, it would defeat the very purpose and object of the Section itself. By merely paying some amount by way of advance towards the cost of acquisition of land for shifting its industrial unit from urban area to non-urban area, an assessee cannot claim exemption from payment of tax on capital gains. This cannot be the intention of the Legislature and an interpretation, which would defeat the very purpose, and the object of the Act requires to be avoided." (at para 31 of the impugned judgment) 38. We are of the view that the aforesaid construction of Section 54G would render nugatory a vital part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th effect from 01.04.2017 and there is no re-enactment with modification in other sections of the Income tax Act, therefore, in the assessee`s case under consideration it would be treated that clause (i) of section 92BA was never existed in the statute book. It is a very well-recognized rule of interpretation of statutes that where a provision of an Act is omitted by an Act and the said Act simultaneously reenacts a new provision which substantially covers the field occupied by the repealed provision with certain modification, in that event such re-enactment is regarded having force continuously and the modification or changes are treated as amendment coming into force with effect from the date of enforcement of the reenacted provision. 19. Now, we shall address the third grievance of ld DR which is that the judgments of Hon`ble Supreme Court, which were relied by the assessee in its favour, in the case of Kolhapur Canesugar Works Ltd. V Union of India (2002) 2 SCC 536 and in Rayala Corporation P. Ltd. V Director of Enforcement (1969) 2 SCC 412 and in the case of General Finance Co. Vs. Asstt CIT (2002) 257 ITR 338 (SC) were overruled by the Hon`ble Supreme Court by its subsequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estriction in a repealing act which is intended to save rights pending proceedings penalties etc. from the annihilation which would result from an unrestricted repeal. In contracts it is a clause that states that ambiguities should not render a contract void or voidable but the contract should be enforced in all other respects provided it can still exist as a valid and binding agreement." Thus, the Saving clause means a clause which denotes a reservation or exception. As per Find Law Legal dictionary, saving clause means a clause in a statute exempting something from statute's operation. Having discussed the meaning of saving clause, it has become quite clear that at the time of omission of clause (i) of section 92BA with effect from 01.04.2017 the Legislature did not mention any terms and conditions to the effect that after omission of clause (i) of section 92BA, pending proceedings/penalties etc, till the date of omission (01.04.2017) will survive. That is, the Legislature did not insert new section in the Income Tax Act to the effect that pending proceedings/penalties etc in relation to clause (i) of section 92BA will survive even after omission, (that is, after 01.04.2017). H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court rendered in the case of General Finance Company (supra) as well as the order of the coordinate bench rendered in the case of Texport Overseas Pvt. Ltd. (supra), the impugned order cannot be sustained, hence is hereby quashed. The order impugned is thus quashed and the grounds raised in the appeal are allowed." 22. To conclude: If a provision of a statute is unconditionally omitted without a saving Clause in favour of pending proceedings, all actions must stop where the omission finds them, and if final relief has not been granted before the omission goes into effect, it cannot be granted afterwards. Savings of the nature contained in Section 6 of General Clauses Act or in special Acts may modify the position. Thus, the operation of repeal or deletion as to the future and the past largely depends on the savings applicable. In a case where a particular provision in a statute is 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 a fresh proceeding for the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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