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TMI Blog2021 (2) TMI 793X X X X Extracts X X X X X X X X Extracts X X X X ..... s & Jars 14,56,04,154 TNMM Purchase of Animal Feeds Supplement 3,01,97,210 TNMM Rent 3,93,092 TNMM Director Remuneration 3,64,800 TNMM Total 17,65,59,256 3. The Transfer Pricing Officer (TPO) made transfer pricing adjustment of Rs. 2.23 Crores and the same was affirmed by Ld. D.R.P. Accordingly, the A.O. passed the final assessment order by making addition of Rs. 2.23 Crores by way of transfer pricing adjustment u/s 92CA of the Act. Aggrieved, the assessee has filed this appeal before us. 4. At the outset, the Ld. A.R. submitted that the specified domestic transactions mentioned above was originally included in clause (i) of section 92BA of the Act. Hence, the assessee has filed transfer pricing study before the tax authorities and the TPO has also passed the impugned order by making TP adjustment. However, the above said clause (i) has been omitted by the Finance Act, 2017 w.e.f. 1.4.2017. The Ld. A.R. submitted that the legal effect of omission of clause (i) of section 92BA was examined by the coordinate bench in the case of Texport Overseas Pvt.Ltd. Vs. Deputy Commissioner of Income-tax in IT(TP)A No.1722/Bang/2017 dated 22.12.2017 and the coordinate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule, the pending proceeding will lapse under rule under which the notice was issued or proceeding being omitted or deleted". 8. In the case of General Finance Co., Vs. ACIT, their Lordship Of the Apex Court has again examined the issue and held that the principle underlying section 6 as saving the right to initiate proceedings for liabilities incurred during the currency of the Act will not apply to omission of a provision in an Act but only to repeal, omission being different from repeal as held in different cases. Following the aforesaid judgments, the jurisdictional High Court has also expressed the same view in the case of CIT Vs. GE Thermometrics India Pvt. Ltd. The relevant observation of the jurisdictional High Court is extracted hereunder: "8. Admittedly, in the instant case, there is no saving clause or provision introduced by way of an amendment while omitting sub-section (9) of Section 10B. Therefore, once the aforesaid section is omitted from the statute book, the result is it had never been passed and be considered as a law that never exists and therefore, when the assessment orders were passed in 2006, the AO was not justified in taking note of a provision which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the DRP and restore the matter to the AO with the direction to re-adjudicate the issue of claim of expenditure incurred in respect of which payment has been made or is to be made to person referred to in clause (b) of sub section 2 of section 40A of the Act. Accordingly, since we have restored the matter to the AO, we find no justification to deal with the other issues on merit. Accordingly, appeal of the assessee stand allowed for statistical purposes." 5. The Ld. A.R. submitted that the above said decision rendered by coordinate bench has since been upheld by the High Court of Karnataka in the very same case of Texport Overseas Pvt. Ltd. in ITA No.392/2018 dated 12.12.2019. Accordingly, the Ld. A.R. submitted that the transfer pricing adjustment is liable to be deleted. When it was pointed out that the coordinate bench has restored the issue to the file of the A.O. for examining the payments in terms of section 40A(2) of the Act, the Ld. A.R. submitted that this issue may be restored to the file of the A.O. for examining it in accordance with the provisions of section 40A(2) of the Act. 6. The Ld. D.R., on the contrary, placed her reliance on the decision rendered by the M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or (d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repealing Act or Regulation had not been passed. 6-A. Repeal of Act making textual amendment in Act or Regulation:- Where any [Central Act] or Regulation made after the commencement of this Act repeals any enactment by which the text of any [Central Act] or Regulation was amended by the express omission, insertion or substitution of any matter, then, unless a different intention appears, the repeal shall not affect the continuance of any such amendment made by the enactment so repealed and in operation at the time of such repeal. 24. Continuation of orders, etc., issued under enactments repealed an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legislative practice to provide while enacting an amending law that an existing provision shall be deleted and a new provision substituted. Such deletion has the effect of repeal of the existing provision. Such a law may also provide for the introduction of a new provision. There is no real distinction between 'repeal' and an 'amendment'. As per the commentary on Principles of Statutory interpretation by Justice G.P. Singh, "the legislative practice in India shows that 'omission' of a provision is treated as 'amendment'. (page 675, Chapter; "Express Repeal"). Further Hon'ble Supreme Court in Ekambrarappa Vs EPTO (AIR 1967 1541), held that amending Act which limits the area of operation of existing Act by modifying the extent clause, result in partial repeal of the Act in respect of the area which its operation is excluded ( emphasis and under lines are added by us). 17. Further, the Hon'ble Supreme Court in the matter of Fibre Boards P. Ltd dated 11.08.2015 reported vide [(2015) 52 taxmann.com 135] /(2015) 10 SCC 333, as well as in the matter of M/s. Shree Bhagwati Steel Rolling Mills [CA No.4280 of 2007, dt.24.11.2015], reported vide (2016) 3 SCC 643, wherein t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) M/s. Fibre Boards Pvt. Ltd and (ii) M/s Shree Bhagwati Steel Rolling vs. Commissioner of Central excise & another and also the statutory provision contained in section 6A of General clauses Act and hence, lacks any binding or persuasive value. 16. The Hon'ble Apex court in the case of Fibre Boards Pvt. Ltd and M/s. Shree Bhagwati Steel Rolling has doubted and disapproved its earlier decisions rendered in the case of Rayala Corporation (P) Ltd Vs Enforcement (1969) 2 SCR 412 and Kolhapur Cane Sugar Works Ltd Vs Union of India (2000) 2SCC536 and in the case of General Finance Company Vs CIT (2002) 7 SCC 1. Further, the Hon'ble Supreme Court in the case of Fibre Boards (I) Ltd, after referring to the provisions of Section 6A of the General Clauses Act held that "a repeal can be by way of an express "omission" and that even an implied repeal of a statute would fall within the expression "repeal" in section 6 of the General clauses Act. Repeals may take any form and so long as a statute or part of it is obliterated, such obliteration would be covered by the expression "repeal" in section 6 of General clauses Act. Considering the latest decision of Hon'ble Supreme Court in F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The distinction carved out in Rayala Corporation (supra) was not correct and further the reference to the Constitution bench has not considered in view of a binding judgment of the Constitution bench in the matter of M.A.Tulloch& Co as well as the provisions of Section 6A of the General Clauses Act and thereafter the Court had held that the decision, in the matter of Rayala Corporation (supra) was per incurium. 19. In our humble view the Hon'ble Supreme Court in Fibre Board (supra) and Bhagwati Steel Rolling (supra) have declared that the law in Rayala Corporation is per in curium, on the basis of which General Finance Co., (supra) was passed. Thus, the later judgments in Fibre Board (supra) and Bhagwati Steel Rolling (supra) shall have a binding precedent on all Courts in India including this Tribunal. 20. We may mention that the decision of the Hon'ble Apex Court is declaration of law as per Article 141 of the Constitution of India. The law declared by Hon'ble Apex Court in Fibre Boards (P) Ltd (supra) dated 11.08.2015, was available when the decisions was rendered by Bangalore Tribunal Textport Overseas Pvt Limited Vs DCIT (supra), however, the same was not brought to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also been examined and it came to be held: "37. The position is well known that at common law, the normal effect of repealing a statute or deleting a 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 of 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 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 proceedings shall not continue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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