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TMI Blog2021 (6) TMI 449X X X X Extracts X X X X X X X X Extracts X X X X ..... PER N.K. BILLAIYA, A.M. 1. With this appeal the assessee has challenged the validity of the order dated 28.09.2017 passed u/s 143(3) read with section 144C of the Act. 2. The grievance of the assessee read as under: 1. That on the facts and circumstances of the case and in law, Assessing Officer ( Ld. AO ) erred in assessing the income of the Appellant at INR 23,80,23,611/- as against the returned income of INR 19,07,01,250/-. 2. That the order of the Ld. Transfer Pricing Officer, New Delhi (hereinafter referred to as the Ld. Transfer Pricing Officer, Ld. TPO ) passed u/s 92CA of the Act and the subsequent directions of the Hon ble Dispute Resolution Panel (hereinafter referred to as Hon ble Panel ) in respect of Assessment Year 2013-14, to the extent detrimental to the Appellant is bad in law and arbitrary, contrary to facts, law and circumstances of the case and liable to be quashed. 3. That in law and on facts and circumstances of the case, the ld. TPO/Ld. AO did not discharge his/her statutory onus by establishing that the conditions specified in clause (a) to (d) of Section 92C(3) of the Act have been satisfied before disregarding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A and 234B of the Act. The above grounds are without prejudice to each other. The Appellant craves to leave to add, withdraw, alter, modify, amend or vary the above grounds of appeal before or at the time of hearing. 3. Vide application dated 21.02.2018 the assessee raised an additional ground which reads as under: That as section 92BA(1) has been omitted vide Finance Act, 2017, impugned proceedings and order will lapse and will become invalid in law . 4. Since the aforementioned additional ground goes to the root of the matter and requires no verification of any new fact the same is admitted. 5. Having heard the Ld. Counsel on the additional ground and also the DR who strongly oppose to the admission of the additional ground stating that it was never raised before any of the lower authorities, in our considered opinion, since this additional ground goes to the root of the matter and requires no verification of any fact. We will address it first. 6. The assessee company is engaged in the business of designing, manufacturing, marketing, selling and exporting of the rear view mirrors and parts thereof for automobile industry. 7. The Internation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of raw material TNMM OP/TC 490401349 2. Business support services received TNMM OP/TC 29889261 3. Web designing services received TNMM OP/TC 11236 4. Payment of service charge TNMM OP/TC 44768 5. Reimbursement of expenses paid CUP NA 165034 8. Since the afore-stated transaction exceeded the monetary limit specified in the relevant provision of the Act the matter was referred to the Transfer Pricing Officer for the determination of the Arm s Length Price. 9. Accordingly, the TPO issued a show cause notice. The sum and substance of show cause notice reads as under: After going through the submissions of the assessee a show cause notice u/s 92CA(2) was issued to the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icular sub-clause shall be deemed not to be on the statute since the beginning and, therefore, the assessment order deserves to be quashed. The Counsel referred to various judicial decisions in support of his contention. Per contra, the DR strongly supported the findings of the lower authorities and stated that there is no decision of the jurisdictional High Court. 14. We have given a thoughtful consideration to the orders of the authorities below. The undisputed fact is that as per sub-clause (1) of section 92BA the assessee has undertaken the transaction which has exceeded the prescribed limit. It is also not in dispute that vide Finance Act, 2017 w.e.f. 01.04.2017 the said sub-clause (1) of section 92BA has been omitted. We find that the AO has made a reference u/s 92CA having observed that the assessee has entered into specific domestic transaction as the case is covered u/s 92BA of the Act. 15. We find that an identical issue came up for adjudication before the coordinate bench, Bangalore in IT(TP)A No. 1722/2017. The relevant findings of the coordinate bench read as under: 7. Having carefully examined the orders of authorities below in the light of rival subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 1 OB. 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 tal ing note of a provision which was not in the statute book and denying benefit to the assessee. The whole obje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the matter to the AO with the direction to readjudicate 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. 16. This decision of the coordinate bench was confirmed by the Hon ble Karnataka High Court in ITA No. 392/2018 along with ITA No. 170/2019. The relevant findings of the Hon ble High Court read as under: 5. Having heard learned Advocates appearing for parties and on perusal of records in general and order passed by tribunal in particular it is clearly noticeable that Clause (i) of Section 92BA of the Act came to be omitted w.e.f. 01.04.2019 by Finance Act, 2014. As to whether omission would save the acts is an issue which is no more res-intigra in the light of authoritative pronouncement of Hon ble Apex Court in the matter of KOHLAPUR CANESUGAR WORKS LTD. v. UNION OF INDIA reported in AIR 2000 SC 811 whereunder Apex Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 92CA could be invalid and bad in law. 7. It is for this precise reason, tribunal has rightly held that order passed by the TPO and DRP is unsustainable in the eyes of law. The said finding is based on the authoritative principles enunciated by the Hon ble Supreme Court in Kolhapur Canesugar Works Ltd referred to herein supra which has been followed by Co-ordinate Bench of this Court in the matter of M/s.GE Thermometrias India Private Ltd ., stated supra. As such we are of the considered view that first substantial question of law raised in the appeal by the revenue in respective appeal memorandum could not arise for consideration particularly when the said issue being no more res integra. 17. As no distinguishing decision has been brought to our notice respectfully following the decision of the coordinate bench (supra) which has been upheld by the Hon ble High Court of Karnataka (supra). We have no hesitation to hold that the cognizance taken by the AO u/s 92B clause (1) and reference made to TPO u/s 92CA is invalid and bad in law. Therefore, the consequential order passed by the TPO and DRP is also not sustainable in the eyes of law. Additional ground is accord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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