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TMI Blog2022 (7) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... ted third party customers. For the assessment year 2006-2007, they submitted their return on 30.11.2006 declaring the total income of Rs.9,26,58,233/-, which was assessed by the Assessing Officer under Section 143 (1) of The Income Tax Act (in short, "the Act") on 14.03.2008 and a refund of Rs.4,86,96,384/- was issued on 28.03.2008. 2.2. Subsequently, pursuant to the proceedings of the Commissioner of Income Tax, Chennai, dated 25.08.2008, the third respondent issued a fresh notice under Section 143 (2) on 04.09.2008 to the appellant. In response to the same, the representative of the appellant appeared before the third respondent and furnished the books of accounts, including Form 3CA and 3CD as per Section 44AB of the Act. 2.3. On scrutiny of the documents filed by the appellant, it was found that the appellant had entered into international transactions with its sister concerns and the total value of such transactions exceeds Rs.15 crores. Therefore, as per Sub-Section 1 of Section 92CA of the Act, the third respondent sent a communication dated 11.11.2008 to the Commissioner of Income Tax, Chennai seeking approval to refer the matter to the Transfer Pricing Officer (in short, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act expires and communicate the same to the third respondent. The assessment proceedings, involving transfer pricing determination have to be finalised within the time limit of 33 months provided under Section 153 of the Act viz., extending the 21 months' time limit by way of additional 12 months for completing the assessment proceedings in such case. Further, Section 153 of the Act requires the third respondent to refer the matter under sub-section (1) of section 92CA of the Act and the same has to be referred during the course of the proceedings in which the third respondent is entitled to pass an order of assessment within 21 months. 3.2. According to the appellant, the aforesaid mandatory procedures have not been followed in the present case. The appellant filed their return of income under section 139 of the Act on 30.11.2006 and the time limit under the first proviso to Section 153 expired on 31.12.2008. During the course of such proceedings, the third respondent should refer the transfer pricing issues under sub-section (1) of section 92CA of the Act to the second respondent and complete the entire assessment proceedings, including the matter of reference, within 31.12. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , have claimed bad debts written off to the extent of Rs.56,86,687/- for A.Ys.2005-2006, 2006-07 and 2007-08 on account of refusal of payment by the assessee, the said amount is to be assessed in the hands of the assessee u/s.41 (1) of the I.T. Act (ii) Disallowance u/s.40(a) (iii) :- An amount of Rs.39060.78 lacs under Software Development Expense and Rs.386.15 lacs under selling, Administrative and other expenses have been claimed as expenditure under "salary and bonus including overseas staff expenses". Therefore, it is apparent that the assessee company has employees working overseas apart from employees working in India. Since the assessee has not given complete break up of the deduction of tax at source (TDS), the expenses towards salaries are disallowed u/s.40 (a) (iii). We direct the A.O.accordingly. (iii) Disallowance u/s. 40 (a) (i):- Amount of Rs.19,68,40,215/- The assessee has not submitted complete particulars in respect of TDS on the expenditure of Rs.19,68,40,215/- incurred under the head 'technical services outside India' in foreign currency towards travel and other project expenses, the entire amount is hit by the provisions of section 40 (a) (i) r.w. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case, the proceedings for making a reference under Section 92CA(1) of the Income Tax Act, 1961 by the 3rd respondent/Additional Commissioner of Income Tax to the Jurisdictional Commissioner of Income Tax started prior to expiry of normal period of limitation under the 1st proviso to Section 153(1) of the Income Tax Act, 1961 and during the course of assessment. 37. The permission was also granted by the Commissioner of Income Tax on 18.11.2008 to make a reference under Section 92CA(1) of the Income Tax Act, 1961 though the actual reference was made only on 17.02.2009. Since the case of the petitioner falls under Chapter X of the Income Tax Act, 1961, special period of limitation under the 2nd proviso to Section 153(1) of the Income Tax Act, 1961 was attracted for completing the assessment. 38. On perusing the records, it is noticed that the petitioner has wholeheartedly participated in the proceedings before the 2nd respondent/Transfer Pricing Officer pursuant to the reference made on 17.02.2009 by the 3rd respondent/Additional Commissioner of Income Tax. Before the 2nd respondent/Transfer Pricing Officer also no objection was raised by the petitioner regarding lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re-assessment. As per Section 153, no order of assessment shall be passed under Section 143 or 144 at any time after expiry of two years from the end of the assessment year in which the income was first assessable. The first proviso to Section 153 of the Act provides that in case the assessment year in which the income was first assessable is the assessment year commencing on 1st day of April 2004 or any subsequent year, the provisions of clause (a) shall have the effect as if for the words "two years" the words "twenty one" had been substituted. The second proviso to Section 153 provides that in case the assessment year in which the income assessable is the assessment year commencing on the 1st day of April 2005, or any subsequent assessment year and during the course of the proceeding for the assessment of total income, a reference is made under sub-section (1) of section 92CA of the Act before 1st day of June 2007, but an order under sub-section (3) of that section has not been made before such date or if any order is made on or after the 1st day of June 2007, the provisions of clause (a) shall, notwithstanding anything contained in the first proviso, have effect as if for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, the limitation to finalise the assessment expired on 31.12.2008 and there is no question of extending the period by making reference on 17.02.2009. Thus, the reference made on 17.02.2009 after the expiration of the original limitation period of 21 months i.e., on 31.12.2008, is legally not sustainable. When the reference was not made during the course of assessment as required, jurisdictional pre-conditions under the second proviso necessary to extend limitation were not satisfied and the limitation period cannot be extended beyond 31.12.2008. 6.4. It is also submitted by the learned Senior counsel for the appellant that the applicability of extended time limit is contingent upon a valid reference made during the course of proceedings for assessment of total income of that year, as provided under Section 92CA of the Act. When a limitation is prescribed for completing the assessment expires without a valid reference having been made to the TPO, the Assessing Officer becomes functus officio and thereafter is not empowered to make a reference to the TPO. Thus, any reference received after the expiration of the time limit would be void-ab-initio. In such circumstances, the extend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether it is pecuniary or territorial, or whether it is in respect of the subject-matter of the action, strikes at the very authority of the court to pass any decree, and such a defect cannot be cured even by consent of parties. If the question now under consideration fell to be determined only on the application of general principles governing the matter, there can be no doubt that the District Court of Monghyr was coram non judice, and that its judgment and decree would be nullities. The question is what is the effect of Section 11 of the Suits Valuation Act on this position." 6.8. The learned Senior counsel for the appellant also placed reliance on the Judgment of the Hon'ble Supreme Court dated 07.10.2021 rendered in Civil Appeal No. 6204 of 2021 [The Commissioner of Income Tax, Chennai v. Mohammed Meeran Shahul Hameed] wherein, the issue involved was relating to limitation arising out of Section 263 in which the word "made" is employed; and the following ruling was made by the Hon'ble Supreme Court: "4.3 On a fair reading of subsection (2) of Section 263 it can be seen that as mandated by subsection (2) of Section 263 no order under Section 263 of the Act shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue - appellant and against the assessee - respondent herein and it is held that the order passed by the learned Commissioner under Section 263 of the Income Tax Act was within the period of limitation prescribed under subsection (2) of Section 263 of the Act. The present appeal is allowed accordingly. No costs." 6.9. Thus, the learned senior counsel appearing for the appellant submitted that the entire assessment proceedings are barred by limitation. Once it is held that the reference to the TPO was invalid and the order passed by the TPO is void-ab-initio, the appellant would cease to be an eligible assessee as contemplated under Section 144C (15) of the Act. In such an event, no draft order at all is required to be passed against the appellant and therefore the draft assessment order passed by the third respondent required to be quashed. However, the learned Judge, overlooked the above aspects and dismissed the writ petition filed by the appellant. Therefore, the learned senior counsel sought to allow this appeal by quashing the order impugned herein. 7.1. On the other hand, the learned Standing Counsel appearing for the respondents would justify the order passed by the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me limit for completing assessment within 33 months, does not arise. This is the true intention of enacting Section 153 (1) read with Section 92 CA (1) and (2) of the Act and its proviso; and no other meaningful and purposeful interpretation can be given to it. 7.4. Thus, according to the learned Standing Counsel appearing for the respondents, it is futile on the part of the appellant to canvass the point of limitation in the writ petition and the same was rightly rejected by the learned Judge. It is also submitted that as against the order of the first respondent dated 24.09.2010, which was impugned in the writ petition, a remedy is available to the appellant to file an appeal before the Appellate Tribunal under Section 253 (1) (d) of the Act. However, without availing such remedy, the appellant filed the writ petition under Article 226 of The Constitution of India, which is not maintainable. In this context, the learned Standing counsel placed reliance on the decision of this Court in Hyundai Motor India Limited v. Deputy Commissioner of Income Tax [2020 (119) Taxmann.com 302 (Madras)] wherein it was held that in a fiscal statute, hierarchy of remedy of appeals are provided and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icated, is the interpretation of the provision, which is a pure question of law in the present case. Therefore, this court is of the view that the writ petitions were maintainable and that alternative remedy will not operate as a bar. 12. Before deciding the question of dispute, it is but necessary to refer to the relevant provisions of the Income Tax Act and the timelines under the Transfer Pricing. (A) Provisions of law Section 92CA - Reference to the Transfer Pricing Officer "Section 92CA. (1) Where any person, being the assessee, has entered into an international transaction or specified domestic transaction in any previous year, and the Assessing Officer considers it necessary or expedient so to do, he may, with the previous approval of the Principal Commissioner or Commissioner refer the computation of the arm's length price in relation to the said international transaction or specified domestic transaction under Section 92C to the Transfer Pricing Officer (2) Where a reference is made under sub-section (1), the Transfer Pricing Officer shall serve a notice on the assessee requiring him to produce or cause to be produced on a date to be specified therein, any evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re 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. Provided that in the circumstances referred to in clause (ii) or clause (x) of Explanation 1 to Section 153, if the period of limitation available to the Transfer Pricing Officer for making an order is less than sixty days, such remaining period shall be extended by sixty days and the aforesaid period of limitation shall be deemed to have been extended accordingly (4) On receipt of the order under sub-section (3), the Assessing Officer shall proceed to compute the total income of the assessee under subsection (4) of Section 92C in conformity with the arm's length price as so determined by the Transfer Pricing Officer (5) With a view to rectifying any mistake apparent from the record, the Transfer Pricing Officer may amend any order passed by him under sub-section (3), and the provisions of section 154 shall, so far as may be, apply accordingly (6) Where any amendments is made by the Transfer Pricing Officer under sub-sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Panel shall issue the directions referred to in sub-section (5), after considering the following, namely:- (a)draft order; (b)objections filed by the assessee; (c) evidence furnished by the assessee; (d) report, if any, of the Assessing Officer, Valuation Officer or Transfer Pricing Officer or any other authority; (e) records relating to the draft order; (f) evidence collected by, or caused to be collected by, it; and(g) result of any enquiry made by, or caused to be made by, it. (7) The Dispute Resolution Panel may, before issuing any directions referred to in sub-section (5),- (a) make such further enquiry, as it thinks fit; or (b) cause any further enquiry to be made by any income-tax authority and report the result of the same to it. (8) The Dispute Resolution Panel may confirm, reduce or enhance the variations proposed in the draft order so, however, that it shall not set aside any proposed variation or issue any direction under sub-section (5) for further enquiry and passing of the assessment order. (9) If the members of the Dispute Resolution Panel differ in opinion on any point, the point shall be decided according to the opinion of the majorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s", the words "twentyone months" had been substituted : Provided further that in case the assessment year in which the income was first assessable is the assessment year commencing on or after the 1st day of April, 2005 but before the 1st day of April, 2009 and during the course of the proceeding for the assessment of total income, a reference under sub-section (1) of section 92CA- 1. (i) Was made before the 1st day of June, 2007 but an order under sub-section (3) of that section has not been made before such date; or 2. (ii) Is made on or after the 1st day of June, 2007, The provisions of clause (a) shall, notwithstanding anything contained in the first proviso, have effect as if for the words "two years", the words "thirty-three months" had been substituted: Provided also that in case the assessment year in which the income was first assessable is the assessment year commencing on the 1st day of April, 2009 or any subsequent assessment year and during the course of the proceeding for the assessment of total income, a reference under subsection (1) of section 92CA is made, the provisions of clause (a) shall, notwithstanding anything contained in the first proviso, have eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... standing anything contained in sub-sections (1) , (1A), (1B) and (2), in relation to the assessment year commencing on the 1st day of April, 1971, and any subsequent assessment year, an order of fresh assessment in pursuance of an order under section 250 or section 254 or section 263 or section 264, setting aside or cancelling an assessment, may be made at any time before the expiry of one year from the end of the financial year in which the order under section 250 or section 254 is received by the [Principal Chief Commissioner orChief Commissioner or [Principal Commissioner or]Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the [Principal Chief Commissioner or]Chief Commissioner or [Principal Commissioner or]Commissioner:" Section 153 after 01.06.2016. "153.Time limit for completion of assessment, reassessment and recomputation.-(1) No order of assessment shall be made under section 143 or section 144 at any time after the expiry of twenty-one months from the end of the assessment year in which the income was first assessable. (2) No order of assessment, reassessment or recomputation shall be made under section 147 after the expiry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer, if satisfied, may allow an additional period of six months to give effect to the order. (6) Nothing contained in sub-sections (1) and (2) shall apply to the following classes of assessments, reassessments and recomputation which may, subject to the provisions of sub-sections (3) and (5), be completed- i. where the assessment, reassessment or recomputation is made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under section 250, section 254, section 260, section 262, section 263, or section 264 or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act, on or before the expiry of twelve months from the end of the month in which such order is received or passed by the Principal Commissioner or Commissioner, as the case may be; or ii. where, in the case of a firm, an assessment is made on a partner of the firm in consequence of an assessment made on the firm under section 147, on or before the expiry of twelve months from the end of the month in which the assessment order in the case of the firm is passed. (7) Where effect to any order, finding o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer after considering various details provided in Clauses (A) to (G) thereof. As per sub-section (12), the DRP has no authority to issue any directions under Sub-section (5) from the end of the month in which the draft order is forwarded to the eligible assessee and not from the date when the assessee submits the objections. Sub-Section (13) of Section 144C of the Act provides that upon receipt of directions issued under sub-Section (5) of Section 144C of the Act, the Assessing Officer shall in conformity with the directions complete the assessment proceedings within one month from the end of the month in which the directions are received. As per the proviso to Section 92CA (3A), if the time limit for the TPO to pass an order is less than 60 days, then the remaining period shall be extended to 60 days. This implies that not only the time frame is mandatory but also the TPO has to pass an order within 60 days. Further, the extension in the proviso referred above, also automatically extends the period of assessment to 60 days as per the second proviso to Section 153. Further, but for the reference to the TPO, the time limit for completing the assessment would only be 21 months from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e registered dealers, they had also filed their returns regularly within the prescribed period and, therefore, assessments were to be completed within a period of three years from the last date prescribed for furnishing the returns, which is the normal period prescribed. At the same time, sub-section (10) of Section 11 gives power to the Commissioner to extend a period of three years. Interestingly, there is no upper limit prescribed for which the period can be extended, meaning thereby such an extension can be given, theoretically, for any length of time. This discretion is, however, controlled by obligating the Commissioner to give his reasons for extension, and such reasons are to be recorded in writing. Obviously, the purpose of giving reasons in writing is to ensure that the power to extend the period of limitation is exercised for valid reasons based on material considerations and that power is not abused by exercising it without any application of mind, or mala fide or on irrelevant considerations or for extraneous purposes. Such an order of extension of time, naturally, is open to judicial review, albeit within the confines of law on the basis of which such judicial review ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a power at any time even much after the last date of assessment. In the instant appeals itself, when the last dates of assessment were 30th April, 2004, 30th April, 2005, 30th April, 2006 and 30th April, 2007, order extending the time under Section 11 (10) of the Act were passed on August 17, 2007, August 17, 2007, August 17, 2007 and May 25, 2007 respectively. Thus, for the Assessment Year 2000-2001, order of extension is passed more than three years after the last date and for the Assessment Year 2001-2002, it is more than two years after the last date. Such a situation cannot be countenanced as rightly held by the High Court. When the last date of assessment in respect of these Assessment Years expired, it vested a valuable right in the assessee which cannot be lightly taken away. As a consequence, sub-section (11) of Section 10 has to be interpreted in the manner which is equitable to both the parties. Therefore, the only way to interpret the same is that by holding that power to extend the time is to be exercised before the normal period of assessment expires. On the aforesaid interpretation, other arguments of Mr. Ganguli lose all significance." 15. The ratio laid down in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce to TPO and " approval" is from the Commissioner. The extended period comes into operation only on a reference and not on concurrence. When it was not the intention of the parliament to attach any importance to concurrence from the Commissioner to reckon the period of limitation, it is not for the court to do so. At this juncture, it is relevant to refer to the judgment of the Apex Court in Hira Devi v. Distt. Board [1952 SCR 1122 : AIR 1952 SC 362], wherein, it was observed as follows: "14. We are afraid we cannot agree with this line of reasoning adopted by the High Court. The defendants were a Board created by statute and were invested with powers which of necessity had to be found within the four corners of the statute itself. The powers of dismissal and suspension given to the Board are defined and circumscribed by the provisions of Sections 71 and 90 of the Act and have to be culled out from the express provisions of those sections. When express powers have been given to the Board under the terms of these sections it would not be legitimate to have resort to general or implied powers under the law of master and servant or under Section 16 of the U.P. General clauses Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hs from the end of the assessment year 2006-07 i.e 31.03.2007. Then the last date for the assessing officer to pass the final assessment order would end on 31.12.2009, even considering the extension by twelve months. In the present case, the order of the DRP itself is only 24.09.2010 much beyond the permissible period. 18. That apart, the revenue though on one hand contended that the refence can be made within 24 months, but on the other hand it has contended that the extend period would be 9 months. If the contention of the Revenue is accepted, it would mean that the overall time to pass assessment order in case of reference to TPO, would be 36 months and not 33 months, which is not the intention of the legislature. The amendments brought into the Act would then turn redundant. It is trite law that an interpretation, which defeats the object of the provision by adding or deleting words, cannot be acceptable. It is also settled law that one provision cannot be read to make the other provision redundant and a provision must be construed according to its plain and natural meaning without adding or deleting the words. Even if there is any conflict between two provisions, they must be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... struck out of a deed or statute and another substituted can as far as I am aware be grouped under three heads: where without such substitution the provision is unintelligible or absurd or totally unreasonable; where it is unworkable; and where it is totally irreconcilable with the plain intention shown by the rest of the deed or statute." g. This rule in regard to reading words into a statute was also affirmed by this Court in several decisions of which we may refer only to one, namely, Narayanaswami v. Pannerselvam [(1972) 3 SCC 717 : AIR 1972 SC 2284 : (1973) 1 SCR 172] where the Court pointed out that: h."'..... addition to, or modification of words used in statutory provision is generally not permissible ...', but 'courts may depart from this rule to avoid a patent absurdity'." i. Here, the word used in Section 5(2)(a)(ii) and the second proviso is "re-sale" simpliciter without any geographical limitation and according to its plain natural meaning it would mean re-sale anywhere and not necessarily inside Delhi. Even where the purchasing dealer resells the goods outside Delhi, he would satisfy the requirement of the statutory provision according to its plain grammatical m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so clear that no human being could entertain a doubt about it." l. We think that in a taxing statute like the present which is intended to tax the dealings of ordinary traders, if the intention of the legislature were that in order to qualify a sale of goods for deduction, "re-sale" of it must necessarily be inside Delhi, the legislature would have expressed itself clearly and not left its intention to be gathered by doubtful implication from other provisions of the Act. The absence of specific words limiting "re-sale" inside the territory of Delhi is not without significance and it cannot be made good by a process of judicial construction, for to do so would be to attribute to the legislature an intention which it has chosen not to express and to usurp the legislative function. m. 11. We fail to see any reason why the word "resale" in Section 5(2) (a)(ii) and the second proviso should not be construed according to its plain natural meaning to comprehend resale taking place anywhere without any limitation as to situs and it should be read as referring only to resale inside Delhi as if the words "inside the Union Territory of Delhi" were added by way of limitation or restrictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court is construing a statutory enactment, the intention of the Legislature should be gathered from the language used by it and it is not permissible to the court to speculate about the legislative intent. Some eighty years ago, as far back as 1897, Lord Watson said in an oft quoted passage in Salomon v. Salomon & Co. Ltd. [1897 AC 22, 38] : n. "'The intention of the legislature' is a common but very slippery phrase, which, popularly understood, may signify anything from intention embodied in positive enactment to speculative opinion as to what the legislature probably would have meant, although there has been an omission to enact it. In a Court of law or equity, what the legislature intended to be done or not to be done can only be legitimately ascertained from that which it has chosen to enact, either in express words or by reasonable and necessary implication.'" o. The same view was echoed by Lord Reid in Black-Clawson International Ltd. v. PapierwerkeWaldhof-Aschaffenburg [(1975) 1 All ER 810, 814] : p. "We often say that we are looking for the intention of Parliament, but that is not quite accurate. We are seeking the meaning of the words which Parliament used. We a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o also the resale would not be taxable if it falls within Rule 29 and in that case too, the sale as well as the resale would both be exempt from tax. It will, therefore, be seen that it is not possible to discover any legislative intent to tax the goods at least at one point and to exempt the sale to the purchasing dealer only if the resale by the purchasing dealer is liable to tax. The second proviso too does not support any such legislative intent, for in the event there contemplated, namely, where the purchasing dealer utilises the goods for any purpose other than "resale", what is taxed in the hands of the purchasing dealer is not the resale by him but the sale to him and that is done not with a view to ensuring that the goods must suffer tax at least at one point, but because the purchasing dealer having committed a breach of the intention expressed by him in the declaration, on the basis of which exemption is granted to the selling dealer, he should not be allowed to profit from his own wrong and to escape the amount of tax on the sale. We do not, in the circumstances, see any cogent or compelling reason for reading the words "inside the Union Territory of Delhi" after "resal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the construction which we are inclined to place on Section 5(2)(a)(ii) and the second proviso. Section 5(2)(a)(ii) was amended with effect from May 28, 1972 by Finance Act, 1972 and the words "in the Union Territory of Delhi" were added after the word "manufacture" so as to provide that manufacture should be inside the territory of Delhi. It was also provided by the amendment that the sale of manufactured goods should be inside Delhi or in the course of inter-State trade or commerce or in the course of export outside India. This amendment clearly excluded manufacture of goods as also sale of manufactured goods outside Delhi. It is clear from the statement of objects and reasons that this amendment was not introduced by Parliament ex abundanticautela,but in order to restrict the applicability of the exemption clause in Section 5 (2)(a)(ii). The statement of objects and reasons admitted in clear and explicit terms that: t. "At present sales of raw materials in Delhi are exempted from tax irrespective of the fact whether the goods manufactured therefrom are sold in Delhi or not. It is, therefore, made clear that sales of raw materials will be tax-free only when such sales are made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct between the two is so utterly irreconcileable that the Court is driven to that conclusion. Here we find that Section 4 merely imposes liability on a dealer to pay tax if his gross turnover exceeds the taxable quantum. It is really Section 5 which provides for levy of tax and it says that the tax payable by a dealer shall be levied on his "taxable turnover" Now, "taxable turnover" is a concept entirely different from gross turnover and it is arrived at by making certain additions and deductions to the gross turnover. Section 5(2)(a)(ii) provides for a deduction while the second proviso speaks of an addition. Where the conditions of the second proviso are satisfied, the price of the goods purchased is to be added to the "taxable turnover" of the purchasing dealer and it would then form part of the "taxable turnover" on which the tax is levied. This provision has been made in order to ensure that the purchasing dealer does not commit a breach of the declaration given by him on the basis of which exemption is given to the selling dealer. The sale to the purchasing dealer is exempted from tax in the hands of the selling dealer but it is taxed in the hands of the purchasing dealer on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22 QBD 513 : 58 LJQB 174 : 60 LT 772 (CA)] referred to in S. Teja Singh case [AIR 1959 SC 352 : (1959) 35 ITR 408] .) 18. The statute must be read as a whole and one provision of the Act should be construed with reference to other provisions in the same Act so as to make a consistent enactment of the whole statute. 19. The court must ascertain the intention of the legislature by directing its attention not merely to the clauses to be construed but to the entire statute; it must compare the clause with other parts of the law and the setting in which the clause to be interpreted occurs. (See R.S. Raghunath v. State of Karnataka [(1992) 1 SCC 335 : 1992 SCC (L&S) 286 : (1992) 19 ATC 507 : AIR 1992 SC 81] .) Such a construction has the merit of avoiding any inconsistency or repugnancy either within a section or between two different sections or provisions of the same statute. It is the duty of the court to avoid a head-on clash between two sections of the same Act. (See Sultana Begum v. Prem Chand Jain [(1997) 1 SCC 373 : AIR 1997 SC 1006] .)" (d) State of A.P. v. Linde (India) Ltd., (2020) 16 SCC 335 : 2020 SCC OnLine SC 362 "17. The term "medicine" is not defined in the 1940 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... distinction disappears and courts must adopt the meaning which flows as a matter of plain interpretation and the context in which the word appears. 20. In State of H.P. v. Pawan Kumar [State of H.P. v. Pawan Kumar, (2005) 4 SCC 350 : 2005 SCC (Cri) 943] it was contended that the safeguards provided in Section 50 of the Narcotics Drugs and Psychotropic Substances Act, 1985 regarding search of any person would also apply to any bag, briefcase or any such article or container, which is being carried by the person. The word "person" was not defined in the Act. A three-Judge Bench of this Court, having regard to the scheme of the Act and the context in which the word - "person" has been used, rejected the contention and held thus : (SCC p. 358, para 8) "8. One of the basic principles of interpretation of statutes is to construe them according to plain, literal and grammatical meaning of the words. If that is contrary to, or inconsistent with, any express intention or declared purpose of the statute, or if it would involve any absurdity, repugnancy or inconsistency, the grammatical sense must then be modified, extended or abridged, so far as to avoid such an inconvenience, but no fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade within 24 months and additional time of 9 months was granted to complete the final assessment proceedings is fallacious. The said contention is against the scheme of determination and assessment of Arm's Length Price dealt in the Act under Sections 92CA, 144C and 153. As discussed in the timeline(supra), when the time given to the DRP itself is 9 months from the date of draft order to complete the assessment and then a further time of one month to the assessing officer to complete the assessment from the end of the month in which the direction is received, it cannot be said that the total additional time was 9 months and the provisos have no connection. It is also not out of place to mention here that if the time provided to the TPO to pass an order and for the assessee to submit their objections as per 144C (2) are also considered along with the time period for the DRP and the assessing officer, it is beyond any doubt that the extended period is 12 months and not 9 months. Further, when one proviso provides a time limit and when another proviso extends such time under certain circumstances, it cannot be held that both the provisos are independent. Therefore, the proviso which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SCC OnLine SC 162 at page 323: "6. On the other hand, it was submitted by Mr Vikas Singh, learned Senior Counsel appearing for the respondent Bank that the appellant had raised at an intermediate stage the plea of not being covered under the Public Premises Act, and had subsequently dropped that plea. They had then relied upon the guidelines and, therefore, the plea, which is sought to be raised at a second stage, cannot be allowed to be raised now on the ground of res judicata, as well as constructive res judicata. As far as this objection of Mr Vikas Singh is concerned, inasmuch as the plea raised by Mr Raval is based on a legal submission, we would not like the appellant to be denied the opportunity of raising the legal plea and, therefore, we do not accept this submission." (c) K. Lubna v. Beevi, (2020) 2 SCC 524 : (2020) 1 SCC (Civ) 589 : 2020 SCC OnLine SC 26: "10. On the legal principle, it is trite to say that a pure question of law can be examined at any stage, including before this Court. If the factual foundation for a case has been laid and the legal consequences of the same have not been examined, the examination of such legal consequences would be a pure question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts which give rise in law to these alternative rights and acts in a manner which is inconsistent only with his having chosen to rely on one of them, the law holds him to his choice even though he was unaware that this would be legal consequence of what he did. He is sometimes said to have "waived" the alternative right, as for instance a right to forfeit a lease or to rescind a contract of sale for wrongful repudiation or breach of condition. This is also sometimes described as "election" rather than "waiver". Another type of waiver debars a person from raising a particular defence to a claim against him. It arises when he either agrees with the claimant not to raise that particular defence or so conducts himself as to be estopped from raising it. 28. In the present case, the respondent cannot be said to have waived the provisions of the statute. There cannot be any waiver of a statutory requirement or provision which goes to the jurisdiction of assessment. The origin of the assessment is either an assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of inj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... page 72, was in terms relied upon as under: '... no hard and fast line can be drawn between a nullity and an irregularity; but this much is clear, that an irregularity is a deviation from a rule of law which does not take away the foundation or authority for the proceeding, or apply to its whole operation, whereas a nullity is proceeding that is taken without any foundation for it, or is so essentially defective as to be of no avail or effect whatever, or is void and incapable of being validated.' Thereafter, their Lordships pointed out that whether a provision fell under one category or the other was not easy of discernment, as in the ultimate analysis, it depended upon the nature, scope and object of the particular provision. Their Lordships in terms approved a workable test laid down by Justice Coleridge in Holmes v. Russel, [1841] 9 Dowl 487 as under: 'It is difficult sometimes to distinguish between an irregularity and a nullity; but the safest rule to determine what is an irregularity and what is a nullity is to see whether the party can waive the objection; if he can waive it, it amounts to an irregularity; if he cannot, it is a nullity.' Thereafter, it was pointed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the stature because there could not be any waiver of a statutory requirement or provision which went to the jurisdiction of assessment. The origin of assessment was either as assessee filing a return as contemplated in the Act or an assessee being called upon to file a return as contemplated in the Act. The respondents challenged the Act. The order of injunction did not amount to a waiver of the statutory provisions. The issue of a notice under the provisions of the Act related to the exercise of jurisdiction under the Act in all cases. The learned Chief Justice in terms pointed out that the revenue statutes are based on public policy. The revenue statutes protect the public on the one hand and confer power on the State on the other. Therefore, even in the context of such a revenue statute like a taxation measure such fetter on the jurisdiction being a fetter laid to protect public, on wider ground of public policy, it was held that such provisions which confer jurisdiction on assessment and reassessment could never be waived for the simple reason that jurisdiction could neither be waived nor created by consent. In the concurring judgment his Lordship, Beg., at page 2077, also po ..... X X X X Extracts X X X X X X X X Extracts X X X X
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