9911796707
TMI Blog2022 (5) TMI 1541X X X X Extracts X X X X X X X X Extracts X X X X ..... d in law. Therefore, the consequential order passed by the TPO and DRP is also not sustainable in the eyes of law. Applicability of provisions of section 40A(2) of the Act on the impugned transactions cannot be ruled out - As in the interest of justice and fair play, we restore this issue to the file of the Assessing Officer. The AO is directed to examine the impugned transaction in light of provisions of section 40A(2) of the Act after affording reasonable and sufficient opportunity of being heard to the assessee. - ITA No. 6597/DEL/2018 - - - Dated:- 25-5-2022 - SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI YOGESH KUMAR U.S, JUDICIAL MEMBER For the Assessee : Shri Darshan S. Kirplani, Adv For the Department : Shri Mahesh Shah, CIT- DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER:- This appeal by the assessee is preferred against the order dated 24.08.2018 framed u/s 143(3) r.w.s 144C of the Income-tax Act, 1961 [hereinafter referred to as 'The Act'] pertaining to Assessment Year 2014- 15. 2. The sum and substance of the grievance of the assessee is that the Assessing Officer/DRP erred in holding that the Specified Domestic Trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,30,018519 2 Services received TNMM 73,494,894 3 Reimbursement of expenses paid Other Method 4072 4 Payment of rent Other Method 1397214 6. Since the aforesaid transactions exceeded the monetary limit specified in the relevant provision of the Act, the matter was referred to the TPO for determination of the arm s length price. 7. A show cause notice was issued to the TPO and sought information relating to the specified domestic transactions. 8. The assessee filed detailed reply in support of its claim that the transactions with the AEs are at arm s length and no adjustment should be made. 9. Submissions of the assessee did not find any favour with the TPO who proposed adjustment on account of purchase of raw material and business support services. 10. Objections were raised before the DRP but were of no avail and the AO finally framed the assessment order. 11. Before us, the ld. counsel for the assessee vehemently stated that sub-section (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clause (i) from the statute, the proceedings already initiated or action taken under clause (i) becomes redundant or otiose. In this regard, our attention was invited to judgment of the Apex Court in the case of Kolhapur Canesugar Works Ltd., (supra) in which the impact of omission of old rule 10 and 1 OA was examined. Having carefully examined the issue in the light of provisions of section 6 of the General Clauses Act, their Lordship has observed that in such a case, the court is to look to the provisions in the rule which has been introduced after omission of the previous rule to determine whether a pending proceeding will continue or lapse. If there is a provision therein that pending proceedings shall continue and be disposed of under the old rule as if the rule has not been deleted or omitted then such a proceeding will continue. If the case is covered by Section 6 of the General Clauses Act or there is a pari-materia provision in the statute under which the rule has been framed in that case also the pending proceeding will not be affected by omission of the rule. In the absence of any such provisions in the statute or in the rule, the pending proceeding will lapse und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been on the statute. While omitting the clause (i) of section 928A, nothing was specified whether the proceeding initiated or action taken on this continue. Therefore, the proceeding initiated or action taken under that clause would not survive at all. In this legal position, the cognizance taken by the AO under section 92B(i) and reference made to TPO under section 92CA is invalid and bad in law. Therefore, the consequential order passed by the TPO and DRP is also not sustainable in the eyes of law. 11. Under these circumstances. where this clause (t) is omitted from the. statute since its inception, the AO ought have required to frame the assessment in normal course after making necessary enquiries of particular claim of expenditure in accordance with law. But this exercise could not have been done on account of provisions of section 92BA Clause (i) of the Act. Now when this clause (i) has been omitted from the statute by virtue of the aforesaid amendments, the AO is required to adjudicate the issue of claim of expenditures in accordance with law after affording opportunity of being heard to the assessee. We therefore set aside the orders of the AO and the DRP and restore t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lause 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 under Section 92CA could be invalid and bad i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
