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TMI Blog2021 (10) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... KARAN, ACCOUNTANT MEMBER: This appeal filed by the assessee is directed against the assessment order dated 29.11.2016 passed by the A.O. for assessment year 2013-14 u/s 143(3) r.w.s. 144C of the Income-tax Act,1961 ['the Act' for short] in pursuance of directions given by Ld. Dispute Resolution Panel ("DRP"). The only issue urged by the assessee in this appeal relates to transfer pricing adjustment of ₹ 1,36,59,869/- made by the AO/TPO in respect of specified domestic transaction. 2. The assessee is engaged in the business of manufacture and processing of animal feed supplements. During the year under consideration, the assessee has entered into specified domestic transaction as detailed below: Sl.No. Name of the associated enterprises/related party Nature of specified domestic transaction Amount of specified domestic transaction 1 V.N. Plastics Pvt. Ltd. Purchase of Packing material 5,50,84,479 2 Pearl Products India Purchase of Packing material 3,90,57,132 3 Brindavan Phosphates Pvt. Ltd. Purchase of raw material 3,17,37,795 4 Brindavan Phosphates Pvt. Ltd. Purchase of capital goods 86,190 5 Deepti Ladhani Directors remunera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned 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 bench held as under:- "7. Having carefully examined the orders of authorities below in the light of rival submissions and relevant provisions and various judicial pronouncements, we find that by virtue of the insertion of section 92BA on the statute as per clause (i), any expenditure 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 exceeds the prescribed limit, it would be a specified domestic transaction for which AO is required to make a reference to TPO under section 92CA of the Act for determination of the ALP. In the instant case, since the transaction exceeds the prescribed limit it becomes the specified domestic transaction for which reference was made by the AO to the TPO under section 92CA for determination of the ALP. Consequently, the TPO submitted a report which was objected to by the learned counsel for the assessee and filed a objection before the ORP. Having adjudicated the objections, the DRP has issued certain directi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een 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 was not in the statute book and denying benefit to the assessee. The whole object of such omission is to extend the benefit under Section 10B of the Act irrespective of the fact whether during the period to which they are entitled to the benefit, the ownership continues with the original assessee or it is transferred to another person. Benefit is to the undertaking and not to the person who is running the business. We do not see any merit in these appeals. The substantial question of law is answered in favourof the assessee and against the revenue. Accordingly, the appeals are dismissed." 9. From the aforesaid judgments, it has become abundantly clear that once a particular provision of section is omitted from the statute, it shall be deemed to be omitted from its inception unless and until there is some saving clause or provision to make it clear that action taken or proceeding initiated under that provision or section would continue and would not be left on account of omission. 10. In the instant ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Mumbai Bench of Tribunal in the case of Firemenich Aromatics India Pvt. Ltd. Vs. ACIT in ITA No.348/Mum/2014 dated 15.7.2020. The Ld. D.R. submitted that the Mumbai Bench of Tribunal has expressed the view that the decision rendered by Hon'ble Apex Court in the case of Fiber Bores Pvt. Ltd. (2015) 52 Taxmann.com 135 and in the case of M/s. Shree Bhagawati Steel Rolling Mills Ltd. (CA No.4280/2007 dated 24.11.2015) shall prevail in the case of omission of the provision in the Income Tax Act. As a result, the provisions of section 6 of the General Clauses Act would apply to save operation of the previous provision so omitted or anything duly done or suffered thereunder. The Ld. D.R. further submitted that the above said two decisions of Hon'ble Supreme Court were not considered by the Tribunal as well as Hon'ble High Court of Karnataka in the case of Texport Overseas Pvt. Ltd. (supra), relied upon by the Ld. A.R. The Ld. D.R. placed heavily on the decision rendered by the Mumbai Bench of Tribunal, particularly p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 and reenacted,. Where any (Central Act) or Regulation, is, after the commencement of this Act, repealed and re-enacted with or without modification, then, unless it is otherwise expressly provided any (appointment notification,) order, scheme, rule, form or bye-law, (made or) issued under the repealed Act or Regulation, shall, so far as it is not inconsistent with the provisions reenacted, continue in force and be deemed to have been (made or) issued under the provisions so reenacted, unless and until it is superseded by any (appointment, notification,) order, scheme, rule, form or bye-law, (made or) issued under the provisions so re-enacted (and when any (Central Act) or Regulation, which, by a notification under Section 5 or 5A of the Scheduled Districts Act, 1874, (14 of 1874) or any like law, has been extended to any local area, has, by a subsequent notification, been withdrawn form the re-extended to such area or any part thereof the provisions of such Act or Regulations shall be deemed to have been repealed and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15) 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 the Hon'ble Supreme Court in these two cases elaborately discussed the issue of repeal /omission/ amendment etc, and held that 'omission' would amount to 'repeal'. It is also held that there is no real distinction between an amendment and that "amendment" is in fact a wider term which includes deletion of the provision in an existing statue. 18. The Hon'ble Court in M/s. Shree Bhagwati Steel Rolling Mills (supra) in a later decision, while referring its order in Fibre Board Private Ltd (supra) held that omission would amount to repeal. "On the argument of the contesting parties that the omitted provision being treated as it never existed as per section 6 of General clauses Act would not apply to allow the previous operation of the provisions is omitted or anything done or suffered thereunder. Nor may a legal proceeding in respect of any rights and liability acquired or incurred under the enactment so omitted." The Hon'ble Apex Court took a view that in majority of the cases, this would cause great public mischief, and tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 Fibre Board and Bhagwati Steel, the earlier decisions rendered by the Constitution Bench in Rayala Corporation (P) Ltd and Kolhapur Cansugar Works cannot be said to have laid down any ratio decidendi on an interpretation of the word "repeal" an "omission" would not be included. Their observations are in the nature of obiter dicta as held by the Supreme Court in Fibre Boards. It is also held that the earlier decisions have not referred to Section 6A of the General clauses Act and they lose their binding effect on an application of the "per incuriam" principle, as held by the Supreme Court in the case of Fibre Boards Private Limited. Thus, in our view the decision rendered in Royala Corporation Pvt. Ltd lacks binding value for the reasons discussed by the Apex Court in Fibre Boards Pvt. Ltd, the decision rendered in the case of Kolhapur Cane Sugar Works Ltd as also in the case of General Finance Company following the decision in Royala Corporation Ltd, loses its binding value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt 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 notice of the bench. The coordinate bench while rendering the decision relied on the decision of Hon'ble Apex Court in General Finance Co. Vs ACIT (supra), which was already declared as per-in curium. Similarly, the decision in General Finance Co (supra) is based on Rayala Corporation P. Ltd Vs Director of Enforcement (supra) and Kolhapur Canesugar Works Ltd Vs Union of India (supra). Considering the aforesaid legal position and the dates of various judgments of the Hon'ble Apex Court, we are of the view that ld. AR for the assessee has referred and relied on the decisions of General Finance Company Vs ACIT (supra) which have been declared as per-in curium by Hon'ble Apex Court. 21. We are conscious of the facts that the latest law declared by Hon'ble Apex Court in various cases (supra) was not confronted with the ld. AR for the assessee; however, it is always presumed that the law declared by the Court is in the knowledge of the legal practitioner. We instead of going in fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tingency 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 but fresh proceedings for the same purpose may be initiated under the new provision." 6. In fact coordinate bench under similar circumstances had examined the effect of omission of sub-section (9) to Section 10B of the Act w.e.f. 01.04.2004 by Finance Act, 2003 and held that there was no saving clause or provision introduced by way of amendment by omitting sub-section (9) of Section 10B. In the matter of GENERAL FINANCE CO. vs. ACIT, which judgment has also been taken note of by the tribunal while repelling the contention raised by revenue with regard to retrospectivity of Section 92BA(i) of the Act. Thus, when clause (i) of Section 92BA having been omitted by the Finance Act, 2017, with effect from 01.07.2017 from the Statute the resultant effect is that it had never been passed and to be considered as a law never been existed. Hence, decision taken by the Assessing Officer under the effect of Section 92BI and reference made to the order of Transfer Pricing Officer-TOP unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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