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TMI Blog2022 (1) TMI 1033X X X X Extracts X X X X X X X X Extracts X X X X ..... nsustainable In the present facts, the Ld. CIT.DR has in the written submission mentioned that the order of the Ld. TPO is passed on 29.01.2014 or 30.01.2014 but dated 31.01.2014. Then, the order of the Ld. TPO is not only irregular, wrong or illegal but is also null and void. Such action cannot be considered to be of any irregularity in the procedure, so as to get any kind of protection u/s. 292BB of the Act. In view of above and following judicial precedent cited before us by the ld. AR being decision of the coordinate bench we hold that the order of the ld. TPO passed on 31.01.2014 is barred by limitation and liable to be quashed. Therefore, consequently, the proposed addition on account of transfer pricing adjustment amounting to does not survive. - Decided in favour of assessee. - IT(TP)A Nos. 290 & 438/Bang/2015 - - - Dated:- 30-12-2021 - Chandra Poojari, Member (A) And Beena Pillai, Member (J) For the Appellant : Nageswar Rao, Advocate For the Respondents : Sumer Singh Meena, CIT-DR (OSD) ORDER Per Bench Present appeal is filed by assessee against final assessment order dated 29.01.2015 passed by the Ld. DCIT, Circle - 6(1)(2), Bangalore for A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... related party filter ( RPT ) of 'less than 25 percent' to 'equal to 0 percent' and thereby rejecting certain companies, which otherwise were passing the filter of RPT 25 percent, applied and not disputed by both the Appellant and the AO/TPO; 6. The learned AO/TPO erred, in law and in facts, by accepting/rejecting companies based on unreasonable comparability criteria; 7. The learned AO/TPO have erred, in law and in facts, by undertaking a negative working capital adjustment; 8. The learned AO/TPO have erred, in law and in facts, by not granting capacity adjustments to account for differences in the capacity utilisation of the Appellant vis- -vis the comparables, 9. The learned AO/TPO have erred, in law and in facts, by not granting depreciation adjustments to account for differences in the rate of depreciation charged by the Appellant vis- -vis the comparables; 10. The learned AO/TPO have erred in law and in facts, by not granting adjustments to account for differences in the marketing expenditure incurred by the Appellant vis- -vis the comparables; 11. The learned AO/TPO erred, in law and in facts, by not making suitable adjustments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Petitioner submits that the above additional grounds are being raised by way of abundant caution. The additional grounds raise issues which are fundamental to the appeal and non-admission and non-adjudication of the same would result in an incomplete appreciation and adjudication of the matter. The Petitioner submits that the failure to raise these grounds at an earlier stage is neither wilful nor wanton but due to reasons stated above. No prejudice would be caused to the Respondent by reason of the above additional grounds being admitted and adjudicated upon and accordingly the balance of convenience is in favour of such an order being passed by this Hon'ble Tribunal. The Petitioner states and submits that the issues raised in the additional grounds above arise out of the order of the lower authorities. Reliance is based on the decisions of the Hon'ble Supreme Court of India in the case of Jute Corporation of India vs. C.I.T. ( 187 ITR 688) and National Thermal Power Corporation vs. C.I.T. (229 ITR 383) as well as the full Bench of the Hon'ble High Court of Bombay in the case of Ahmadabad Electricity Co. Ltd. (199 ITR 351). In the above circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment made u/s. 92CA and admission of the ground may lead to the order passed under the said section being null and void. In this regard, the Appellant would like to place reliance on the decisions of the Hon'ble Delhi Tribunal in the case of Honda Trading Corporation, Japan vs. DCIT (ITA No. 1132/Del/2015) and Asian Honda Motor Co. Ltd. Vs. DCIT (ITA No. 6143/Del/2015). Non-admission and non-adjudication of the ground would result in an incomplete appreciation and adjudication of the matter. The petitioner submits that the ground of appeal with respect to this issue has been raised at earlier stages of litigation and before the Hon'ble Tribunal as well. The appellant is only revising the language of previously filed Ground No. 19, for providing better clarity on the contention. 2. Brief facts of the case are as under: The issues alleged in additional ground raised in Grounds 19 and 20 is in respect of contesting order passed by the Ld. TPO being time barred and liable to be quashed. It is submitted that assessee may be permitted to raise these additional grounds which goes to the root of the case. The Ld. Counsel submitted that admission of additional groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being cured and it is merely a case of irregularity in assessment proceedings by the Ld. TPO. The Ld. CIT.DR filed the comments of Ld. TPO on additional grounds. For sake of convenience, the same is reproduced as under: The Ld. CIT.DR thus submitted that assuming there is a delay in passing order u/s. 92CA(3), at best, it would be a curable defect. We have perused submissions advanced by both sides in the light of records placed before us. Firstly we look at the various provisions which are cited before us. Section 92CA (3A) of the act reads as under: [(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 Admittedly the ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n order under sub-section (3) of that section has not been made before such date; or (ii) is made on or after the 1st day of July, 2012, the provisions of clause (a) shall, notwithstanding anything contained in the first proviso, have effect as if for the words two years , the words three years had been substituted.] [Extracted from taxmann.com as amended by the Finance Act 2012] Therefore accordingly the order u/s. 143(3) for AY 2010-11 should have been passed by 31.3.2014. 3. Based on the facts narrated above we hereby tabulate the relevant dates pertaining to the proceedings before the various authorities for the impugned AY. 1. Date of filing of return of income - 04.10.2010 2. 143(1) issued on - 14.04.2011 3. 143(2) issued on - 26.08.2011 4. Reference by the Ld. AO made on - 03.07.2012 5. Time period within which 143(3) is to be passed as per sec. 153(1) - 31.03.2014 6. Date by which order u/s. 92CA(3) was to be passed - 28.01.2014 7. Date of passing the order u/s. 92CA(3) - 31.01.2014 Before us the Ld. Counsel relied on decision of Hon'ble Delhi Tribunal in case of Honda Trading Corporation Vs. DCIT (supra) wherein, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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.. 6.3. It transpires from a reading of the above provision that where a reference is made to the TPO after 1.6.2007, an order under sub-section (3) may be made at any time before 60 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 re-assessment, etc., expires. 6.4. The ld. DR vehemently contended that the use of the word 'may in this provision for the passing of the order by the TPO within a period of 60 days of the limitation set out in section 153 indicates that the adherence to this time limit is not mandatory. He contended that even if the order is passed after the period of 60 days from the period of limitation as given u/s. 153, still it would be treated as having been passed within time. This argument was countered by the ld. AR. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer is of opinion that the value so returned is less than its fair market value; (b) in any other case, if the Assessing Officer is of opinion-(i) that the fair market value or the asset exceeds the value of the asset as returned by more than such percentage of the value of the asset as returned or by more than such amount as may be prescribed in this behalf; or (ii) that having regard to the nature of the asset and other relevant circumstances, it is necessary so to do. In Raj Paul Oswal vs. CWT (1988) 171 ITR 489 (P H), there arose a quarrel as to the meaning of the word 'may used in section 16A in the context of making reference to the Valuation Officer. Settling the controversy, the Hon'ble High Court held that the word 'may' used in section 16A(1)(b), should be read as 'shall'. It held that if the legislative intent had been to accord total discretion to the WTO to make a reference to the Valuation Officer or not in cases which were covered by cls. (a) (b) of sub-s. (1) of s. 16A of the WT Act, then there was no necessity of providing the guidelines in cl. (a) or in sub-cls. (i) and (ii) of cl. (b) of sub-s. (1) of s. 16A. It was, therefore, he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e time limit for completion of assessment was contained in section 153 and accordingly the time limit for the passing of the order by the TPO was also set out accordingly in section 92CA w.r.t. the time limit for the completion of assessment as per section 153. However, with the insertion of section 144C, the time limit for the completion of assessment, or in other words, for passing of the final assessment order, stood shifted to sub-sections (4) or (13) of section 144C and got detached from section 153. Along with this, passing of draft order also became mandatory, for which we have held above that the same is required to be passed within a reasonable time and it has got no relation with the time limit given in section 153. When the position is such that the draft order has to be passed independent of the time limit given in section 153, there appears some logic in not continuing with the time limit for the passing of the order by the TPO tagged with the time limit given in section 153. It has led to incoherence in the provisions. This position can be set right only with a suitable legislative amendment. 6.10. Having held that the time limit given in sub-section (3A) of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d but the addition on account of transfer pricing adjustment arising from the determination of the ALP of the international transactions by the TPO as emanating from his time barred order, would be unsustainable. We hold accordingly and direct the deletion of addition on account of transfer pricing adjustment made in the final assessment order. 8. In view of our decision on the above legal ground, there remains no need to deal with the contentions raised before us on the merits of the addition on account of transfer pricing adjustment. In the present facts, the Ld. CIT.DR has in the written submission mentioned that the order of the Ld. TPO is passed on 29.01.2014 or 30.01.2014 but dated 31.01.2014. Then, the order of the Ld. TPO is not only irregular, wrong or illegal but is also null and void. Such action cannot be considered to be of any irregularity in the procedure, so as to get any kind of protection u/s. 292BB of the Act. In view of above and following judicial precedent cited before us by the ld. AR being decision of the coordinate bench we hold that the order of the ld. TPO passed on 31.01.2014 is barred by limitation and liable to be quashed. Therefore, conse ..... 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