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TMI Blog2022 (11) TMI 1339X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed the order u/s. 92CA(3) of the Act on 30/01/2014. Ergo, the order u/s. 92CA(3) of the Act is surely time barred by one day. Reference to DRP can only be made by eligible assessee - Eligible assessee mean any person in whose case variation arises as a consequence of the order of the TPO passed u/s. 92CA(3) of the Act. The order has to be a valid order. In the instant case since, the order of TPO was beyond the period of limitation it is not a valid order. Therefore, there is no eligible assessee in terms of the definition provided in sub-section (15) to section 144C of the Act . If there is no eligible assessee, no reference to DRP could have been made. Once the substratum for making the assessment under transfer pricing mechanism erodes the subsequent proceedings emanating from flawed foundation is without jurisdiction. We find merit in the additional grounds of appeal - The assessee succeeds on the aforesaid legal grounds. - SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN , ACCOUNTANT MEMBER For the Appellant : Shri J.D. Mistry, Sr. Advocate with, Shri Hiten Chande, Shri Ajit Kumar Jain , Shri Siddhesh Chougule For the Respondent : Ms. Vatsala Jha ,CIT-DR ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act was required to be passed by 31 March 2014. A perusal of the grounds and the application for admission of said additional grounds clearly indicates that these are legal grounds assailing the validity of the assessment order and the order of TPO. The Hon'ble Supreme Court of India in the case of National Thermal Power Company vs. CIT, 229 ITR 383 has held that the Tribunal has jurisdiction to examine a question of law which arises from the facts on record and have a bearing on the tax liability of the assessee. In the instant case, the additional grounds of appeal raised by the assessee challenges the validity of assessment order and the order of TPO on the ground of limitation. No further documentary evidence is required to be adduced for adjudicating these grounds. The said additional grounds of appeal are admitted and are taken up for adjudication. 7. The ld.Counsel for the assessee submits that at this stage he will be confining his submissions only with respect to the additional grounds of appeal No.48 49, without prejudice to the original grounds / other additional grounds of appeal. If ground No.48 49 are allowed, the original grounds/ other additional grounds woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble Madras High Court in the case of bunch of appeals, lead case being Pfizer Healthcare India (P) Ltd. (supra) had decided exactly the similar issue. The Hon'ble Madras High Court observed that limitation has been prescribed for each stage/process in an assessment right from filing of return of income, reference to the TPO, passing of the order by TPO, filing of objections before DRP and thereafter passing of final assessment order. The Hon ble High Court in para- 30 of the judgment has explained as to how the period of sixty days as mentioned in section 92CA(3A) is to be calculated . The Hon ble High Court has further held that any order passed by the TPO beyond a period of limitation as prescribed under the provisions of section 92CA(3A) read with proviso to section 153 of the Act, lacks jurisdiction. 7.4 The order of the Single Judge was challenged by the Department in writ appeal before the Division Bench of Hon'ble Madras High Court. The Division Bench in the case titled DCIT vs. Saint Gobain India (P) Ltd.,(supra) confirmed the findings of Single Judge Bench. Thereafter, Bangalore Bench of the Tribunal in the case of Unisys India Pvt. Ltd. vs. DCIT in IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /01/2015 and 31/01/2016, respectively, and the limitation for order u/s.143(3) r.w.s. 153 of the Act is 31/03/2015 and 31/03/2016, respectively. The same principle would apply to A.Y. 2010-11. The ld. Departmental Representative submits that in line with the Boards Central Action Plan the TPO has passed the order within the period of limitation. The ld. Departmental Representative placed reliance on the decision of Delhi Bench of Tribunal in the case of M/s. Louis Dreyfus Commodities India Ltd. vs. DCIT in ITA No.2381/Del/2014 for Assessment Year 2009-10 decided on 11/03/2021. 9. Shri Mistry, Sr. Advocate rebutting the submissions made on behalf of the Revenue asserted that Hon'ble Madras High Court in the case of Pfizer Healthcare India (P) Ltd. vs. JCIT (supra) has considered Central Action Plan issued by CBDT. The ld. Counsel for the assessee further asserts that in the case of Louis Dreyfus Commodities India Ltd.(supra) the Bench has not considered the provisions of section 144C of the Act, hence, the aforesaid decision is distinguishable. 10. We have heard the submissions made by rival sides on the limited issue of validity of order passed by TPO u/s. 92CA(3) of the Act an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents- (1) No order of assessment shall be made under section 143 or section 144 at any time after the expiry of - (a) Two years from the end of the assessment year in which the income was first assessable, or (b) One year from the end of the financial year in which a return or a revised return relating to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, is filed under sub-section(4) or sub-section (5) of section 139, whichever is later: Provided xxxxxxxxxxx Provided further xxxxxxxxxx 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 sub-section(1) of section 92CA is made, 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 A conjoint reading of the relevant provisions of section 92CA(3A) and 153(1) of the Act would show that the TPO is required to pass order u/s. 92CA(3) of the Act at an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present context, not only denotes the flow of direction, but also actual date from which the period of 60 days is to be calculated. It is settled law that while interpreting a statute, it is not for the courts to treat any word(s) as redundant or superfluous and ignore the same. In this connection, it is pertinent to note the judgment of the Apex Court in Grasim Industries Ltd. v. Collector of Customs 2002 taxmann.com 1803, wherein, it was held as follows : 10. No words or expressions used in any statute can be said to be redundant or superfluous. In matters of interpretation one should not concentrate too much on one word and pay too little attention to other words. No provision in the statute and no word in any section can be construed in isolation. Every provision and every word must be looked at generally and in the context in which it is used. It is said that every statute is an edict of the legislature. The elementary principle of interpreting any word while considering a statute is to gather the mens or sententia legis of the legislature. Where the words are clear and there is no obscurity, and there is no ambiguity and the intention of the legislature is clearly conveyed, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that 60 days from the last date . Even going by section 9 of the General Clauses Act, when the word from is used, then, that date is to be excluded, implying here that 31-12-2019 must be excluded. After excluding 31- 12-2019, if the period of 60 days is calculated, the 60th day would fall on 1-11-2019 and the TPO must have passed the order on or before 31-10-2019 as orders are to be passed before the 60th day. Therefore, either way the contention of the Revenue is a fallacy and has no legs to stand. Mandatory or Directory 31. The next contention that has been raised by the learned senior standing counsel for the appellants is that the usage of the word may in section 92CA (3A) indicates that the time fixed is only directory, a guideline, not mandatory and is for the sake of internal proceedings. 32. Let us now examine the relevant procedures relating to Transfer Pricing. After an international transaction is noticed subject to satisfaction of section 92B, a reference is made to the TPO under sub-section (1) of section 92CA of the Act. The TPO after considering the documents submitted by the assessee is to pass an order under section 92CA (3) of the Act. As per section 92CA(3A), t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion raised in this regard is rejected. 36. As rightly pointed out by Mr. Ajay Vohra, learned senior counsel for the respondents in WA. Nos.1148 and 1149/2021, the word may has to be sometimes read as shall and vice versa depending upon the context in which it is used, the consequences of the performance or failure on the overall scheme and object of the provisions would have to be considered while determining whether it is mandatory or directory. 37. At this juncture, it is noteworthy to mention the commentary of Justice G.P.Singh on the interpretation of statutes, Principles of Statutory Interpretation (1st Edn., Lexis Nexis 2015), which is quoted below for ready reference: 'The intention of the legislature thus assimilates two aspects: In one aspect it carries the concept of meaning i.e. what the words mean and in another aspect, it conveys the concept of purpose and object or the reason and spirit pervading through the statute. The process of construction, therefore, combines both literal and purposive approaches. In other words the legislative intention i.e. the true or legal meaning of an enactment is derived by considering the meaning of the words used in the enactment in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 153 of the Act expires. Thus, the limitation in the present case for passing the order u/s. 92CA(3) of the Act expires on 29/01/2014. The TPO passed the order u/s. 92CA(3) of the Act on 30/01/2014. Ergo, the order u/s. 92CA(3) of the Act is surely time barred by one day. 15. The Ld. Departmental Representative has referred to Finance Act 2007 Explanatory Notes on provisions relating to Direct Taxes issued vide Circular No.3/2008 dated 12/03/2008. A perusal of clause 43 of said circular would show that the expression used to depict time limit is months . Whereas in the Act, the Legislature has specified the period of limitation in days . The expression two months used in clause 43(2) in the aforesaid circular to specify the period of limitation may not necessarily be equal to sixty days as specified in the Act. The words/expressions used in statute cannot be substituted in Explanatory notes or Board Circulars. If the limitation period is mentioned in days in the Act, the same expression has to be used in Circulars. Otherwise it will lead to confusion and ambiguity. Two months as mentioned in Circular can be more or even less than sixty days. Therefore, expression issued to ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee submits that at this stage the assessee is only assailing validity of the order passed by TPO under section 92CA(3) and the assessment order passed under section 143(3) r.w.s. 144C(13) of the Act. The ld. Authorized Representative of the assessee further contended that the facts and the reasons for assailing the aforesaid orders in the present appeal are identical (except for the dates) to the facts in the case of Mondelez India Foods Private Limited (supra). Therefore, the Ld.Counsel for the assessee of the assessee relies on the submissions advanced by the Sr.Advocate in the case of Mondelez India Foods Private Limited (supra). The ld. Authorized Representative of the assessee further submits that the arguments raised by ld Sr. Counsel in respect of admission of the legal grounds by way of additional grounds of appeal would equally hold good in the present case. The ld. Authorized Representative of the assessee submits that in so far as the relevant dates for passing the order under section 92CA(3)of the Act and the working of period of limitation, the same is tabulated at page 218 of the legal paper book filed by the assessee. 21. The ld.Departmental Representative vehem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion for passing order u/s. 92CA(3) of the Act. The same is reproduced herein below: Particulars Ground No.41 : Validity of Order passed under section 92CA(3) of the Act Calculation of due date for passing transfer pricing order under section 92CA(3) Asst. Order due date as per section 153 of the Act for A.Y 2009-10 31 March 2013 Transfer Pricing Order due date: (At least sixty days before the period of limitation referred to in section 153 of the Act) Number of Days in March 2013 30 Number of Days in February 2013 28 Number of days in January 2013 2 Total Number of days 60 Deadline for passing TP Order for A.Y.2009-10 29 January 2013 Date of TP order passed for A.Y 2009-10 30 January 2013 Delay 1 Day Delay in passing TP Order 25. The assessee has determined the period of limitation for passing the order by TPO in accordance with method elucidated by the Hon'ble ble Madras High Court in the case of Pfizer Healthcare India (P) Ltd. vs. JCIT (supra). Since, the issue raised in the present appeal is similar to the one adjudicated by us in the case of M/s. Mondelez India Foods Private Limited in ITA No.1492/Mum/2015, A.Y.2010-11, the findings given therein would mutatis mutandis ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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