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TMI Blog2022 (6) TMI 179X X X X Extracts X X X X X X X X Extracts X X X X ..... ce that the coordinate bench in the case of Texport Overseas Pvt. Ltd. [ 2017 (12) TMI 1719 - ITAT BANGALORE] has restored the matter to the file of the AO under the direction to examine the claim of expenditure in accordance with the provisions of sec. 40A(2)(b) of the Act. Following the same, we restore this issue to the file of the AO with the direction to examine the claim of expenditure in terms of the provisions of sec. 40A(2)(b) of the Act. The various grounds raised by the with respect to transfer pricing adjustments made by the TPO and the direction of the DRP have become infructuous and hence dismissed. The AO is directed to look into the facts afresh and decide the case on merits as per the provisions of law after giving a reasonable opportunity of being heard to the assessee in this regard - Appeal of assessee allowed. - IT (TP) A No. 1947/Bang/2017 - - - Dated:- 29-4-2022 - SHRI N.V VASUDEVAN, VICE PRESIDENT AND MS. PADMAVATHY S, ACCOUNTANT MEMBER Assessee by : Shri T Srinivasa Rao, C.A Revenue by : Mrs. Susan D George, CIT (DR) ORDER Per Padmavathy S, Accountant Member This appeal is directed against the order passed by the DCIT, Circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee whereby the DRP directed the AO to rectify the mistake in the returned income considered and allowed the additions made towards PF ESI. The DRP however confirmed the TP adjustment made by the TPO. The AO concluded the assessment by considering the directions of the DRP and passed the assessment order under section 143(3) read with section 92CA of the Act vide his order dated 27.07.20 17. 4. Aggrieved by the order of assessment, the assessee is filing the appeal before the Tribunal. 5. During the course of hearing, the learned counsel for the assessee moved an application for the admission of the additional grounds with a request that since the additional grounds goes to the root of the case it should be admitted and be disposed off at the threshold. The additional ground raised by the assessee is reproduced below The TPO, DRP and the AO have failed to consider the fact that the provisions of section 92BA of the Income-tax Act 1961 have been amended vide Finance Act 2017 to exclude specified domestic transactions which are contained under section 92BA read with 40A(2)(b) from the purview of transfer pricing regulations 6. The learned AR submitted that there wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computation of ALP. Accordingly, TPO has computed the ALP which, was objected to by the ass ssee before the DRP and DRP disposed off the objections with certain findings/directions. 5. The learned counsel for the assessee further contended that sub clause (I) of section 92BA under which has undertaken the transactions which has exceeded the prescribed limit, was omitted by the Finance Act, 2017 w.e.f. 01.04.2017. Since clause (i) has been omitted from the statute by virtue of the amendment, this particular sub clause shall be deemed not to be on the statute since the beginning. In support of his contention, the learned counsel for the assessee has placed a heavy reliance upon the judgment of the Apex Court in the case of Koihapur Canesugar Works Ltd.. Vs. Union of India in Appeal (Civil) 2132 of 1994 vide judgment dated 01.02.2000 in which the constitution bench has held that section 6 only applies to repeals and not to omissions, and applies when the repeal is of a Central Act or Regulation and not as a Rule. It was further clarified by the Apex Court that in such a case the court is to look to the provisions in the rule which has been introduced after omission, of the prev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtue 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 DRP. Having adjudicated the objections, the DRP has issued certain directions and consequently the AO passed an order. Subsequently, by Finance Act, 2017 w.e.f. 01.04.2017, clause (i) of section 92BA was omitted from the statute. Now the question arises as to whether on account of omission of clause (i) from the statute, the proceedings already initiated or action taken under clause (i) becomes redundant or otiose. In this regard, our attent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring 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 favour of 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 case, undisputedly, by the Finance Act, 2017, clause (i) of section 92BA has been omitted w.e.f. 01.04.2017. Once this clause is omitted by subsequent amendment, it would be deemed that clause (i) was never been on the statute. While omitting the clause (i) of section 92BA, nothing was specified whether the proceeding initiated or action taken on this contin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 but fresh proceedings for the same purpose may be initiated under the new provision. 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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