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TMI Blog2021 (8) TMI 1374X X X X Extracts X X X X X X X X Extracts X X X X ..... statutes that where a provision of an Act is omitted by an Act and the said Act simultaneously re-enacts a new provision which substantially covers the field occupied by the repealed provision with certain modification, in that event such re-enactment is regarded having force continuously and the modification or changes are treated as amendment coming into force with effect from the date enforcement of the re-enacted provision. The issue for consideration before us is clause (i) of Section 92BA which has been omitted from 01.04.2017 and there is no re-enactment with modification or any Saving Clause in any other Sections of the Act. Thus, without any Saving Clause or similar enactment, then it has to be held that Clause (i) of Section 92BA did not come into operation whenever any action has been taken especially after such omission. Accordingly, we hold that no Transfer Pricing Adjustment can be made on a domestic transaction which has been referred to by the Assessing Officer after the omission of the said clause by the Finance Act, 2017 even though transaction has undertaken in the Assessment Year 2016-17. Our decision is equally fortified by the judgment of M/s. Raipur Ste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h at a premium of Rs. 220/- per equity share and balance of Rs. 5,45,00,000 in cheque (Rs. 2,50,00,000 paid on 28.03.2016 and balance Rs. 2,95,00,000 payable on or before 30.09.2016). The same was duly reported in Form No. 3CEB as follows: S. No. Nature of Transactions Amount (Rs. In lakhs) 1. Purchase of office space as inventory 22,463.38 2. Purchase of diesel 9.32 For the purpose of benchmarking the transaction, the Assessee has valued the property by using Other Method prescribed in Rule 10AB of the Income-tax Rules, 1962 ( the Rules ] and reported as under: Purchase of office space as inventory Particulars Amount (Rs. In lakhs) Value of property as on 28.03.16 as per report dated 13.09.16 of the Government approved valuer 22,176.24 Add: Cost of interior expenses incurred by the seller as certified by management 287.13 Total 22,463.37 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany M/s. Uphill Farms Pvt. Ltd. The approval was granted for making reference to the TPO vide letter dated 28.11.2018 by the Pr. CIT. The TPO computed the value adopting the method of NOIDA Authority vide order dated 31st October, 2019 passed u/s.92CA(3) and proposed and adjustment of Rs.38,70,19,094/- after valuing the property at Rs.166,80,68,357/-. The reasons given by the TPO for rejecting the value adopted by the assessee were as under: i. The TPO rejected rates of 99acres.com stating that the Assessee had furnished only 4 listings with hugely varying rates from Rs. 5,600-14,200 per sq ft. whereas Ld. TPO had stated rates as per magic bricks which were between Rs. 3,379- Rs. 8,182 per sq. ft. ii. He also rejected rates of 99acres.com wrongly stating that rates are for the FY 2019-20 and not the year of purchase. iii. The TPO rejected rate of Rs. 107,000 per sq. meter in the valuation report stating that the basis of arriving at the rate by the Government approved valuer was not given. iv. He has stated that the Assessee has itself requested not to take this rate for the purpose of verifying the validity of the transaction. v. The TPO has valued the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,89,490/- and raised demand of Rs. 3,70,09,330/- (including interest]. In view of the above, the Ld. AO computed the income of the Assessee as under:- Returned income as declared by the Assessee company Rs. 3,77,140/- Add: Adjustment on account of specified domestic transaction as directed by DRP Rs. 6,93,89,490/- Total Income Rs. 6,97,66,630/- 14. Before us, ld. counsel for the appellant-assessee, Mr. Ajay Wadhwa submitted that since clause (i) of Section 92BA have been omitted by the statute from the Finance Act, 2017 w.e.f. 01.04.2017, therefore, it is deemed that the said clause was never part of the Act. The proceedings initiated after an omitted section cannot be made unless there is saving clause provided in the Act at the time of omission. Here in this case notice u/s.143(2) for selecting the case of scrutiny was issued on 21.07.2017, i.e., after the omission of clause (i) of Section 92BA and reference to the TPO was itself made on 29.11.2018. Thus, the effect of such an omission is that no proceeding u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Texport Overseas P. Ltd. (2020) 114 taxmann.com 568 (Karnataka) 5. Having heard learned Advocates appearing for parties and on perusal of records in general and order passed by tribunal in particular it is clearly noticeable that Clause (i) of section 92BA of the Act came to be omitted w.e.f. 01.04.2019 by Finance Act, 2014. As to whether omission would save the acts is an issue which is no more res intigra in the light of authoritative pronouncement of Hon'ble Apex Court in the matter of Kolhapur Canesugar Works Ltd. v. Union of India AIR 2000 SC 811 where under Apex Court has examined the effect of repeal of a statute vis-a-vis deletion/addition of a provision in an enactment and its effect thereof. The import of section 6 of General Clauses Act has also been examined and it came to be held: 37. The position is well known that at common 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r these undisputed facts in the light of the Judgement of the Hon'ble Supreme Court rendered in the case of General Finance Company (supra) as well as the order of the coordinate bench rendered in the case of Texport Overseas Pvt. Ltd. [supra]. the impugned order cannot be sustained, hence is hereby quashed. The order impugned is thus quashed and the grounds raised in the appeal are allowed. 10. On the very identical facts, the Coordinate Bench of IT AT Kolkata in the case of M/s Raipur Steel Casting India Pvt Ltd, in 1TA No.895/Kol/2019, for A.Y. 2014- 15, order dated 10.06.2020 held as follows: 12... We note that Id PCIT issued the above show cause notice u/s 263 in respect of specified domestic transactions referred to in clause (i) of section 92BA of the Act which was omitted with effect from 01.04.2017 and effect of such omission of clause (i) of section 92BA means that this provision was never existed in the statute book, since clause (i) of section 92 BA was never existed in the statute book therefore, ld PCIT cannot exercise his jurisdiction under section 263 of the Act in respect of specified domestic transactions referred to in clause (i) of section 92 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordinate Benches.[ in the case of Swastik Coal Corporation Pvt Ltd and in the case of M/s Raipur Steel Casting India (p) Ltd-supra)] we hold that since clause (i) section 92 A was omitted with effect from 1st April. 2017 and the effect of such omission is that the said clause(i) was never existed in the statute. Hence. Ld. PC1T can not exercise the jurisdiction u/s 263 of the Act. C. M/s. Raipur Steel Casting India fPl I.td. v. P.C.I.T. ITA No. 895/Kol/2019 AY 2014-15 and M/s. Srinath li Furnishing Pvt. Limited v. P.C.I.T. ITA No.l035/Kol/2019 11 As we noticed that clause (i) of section 92BA has been omitted with effect from 01.04.2017. The effect of such omission without any saving clause of General Clauses Act, means that the above provision was not in existence or never existed in the statute hook. If it is held that effect o f such omission of clause (i) of section 92BA means that this provision was never existed in the statute book, then in that situation the exercise of jurisdiction by the Id PCIT [ in respect of above said clause (i) of section 92 BA] under section 26.1 of the Act would fail. 12. We note that Id PCIT issued the above show cause no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n apply to allow the previous operation of the provision so omitted or anything duly done or suffered thereunder. Nor may a legal proceeding in respect of any right or liability be instituted, continued or enforced in respect of rights and liabilities acquired or incurred under the enactment, so omitted. Therefore, considering the judgment of the Hon'ble Supreme Court in the case of M/s. Shree Bhagwati Steel Rolling Mills supra. it can be said that since clause (i) of section 92BA was omitted w.e.f. 01.04.2017 therefore, it would be treated that said since clause (i) of section 92BA was never existed in the statute hook. 20. We are of the view that at this juncture it is necessary to examine, the meaning of saving clause? As Per the law.Com Law Dictionary Black's Law Dictionary 2nd Ed. the saving clause has been defined as follows: A saving clause in a statute is an exception of a special thing out of the general things mentioned in the statute; it is ordinarily a restriction in a repealing act which is intended to save rights pending proceedings penalties etc. from the annihilation which would result from an unrestricted repeal. In contracts it is a clause t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid discussion, moreover, the coordinate bench has also examined the issue in the case of Excise. (2016) 3 STexport Overseas Pvt. Ltd. in IT[TP]A No.1722/Bang/2017. Admittedly, in this case, the order has been revised purely on the basis that the assessing officer has not referred to determine the arm's length price to the TPO. Since the provision itself stood omitted at the time when the order was passed by the Ld. Pr. CIT, under these undisputed facts in the light of the Judgement of the Hon ble Supreme Court rendered in the case of General Finance Company [supra] as well as the order of the coordinate bench rendered in the case of Textport Overseas Pvt. Ltd. [supra], the impugned order cannot be sustained, hence is hereby quashed. The order impugned is thus quashed and the grounds raised in the appeal are allowed. 22. To conclude: 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 of Gener ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove. Thus, the usurpation of jurisdiction of exercising revisional jurisdiction by the Principal CIT is null in the eyes of law and, therefore, we are inclined to quash the very assumption of jurisdiction to invoke revisional jurisdiction u/s 263 of the Act by the Principal CIT. Therefore, we quash the order of the Principal CIT dated 08.03.2019 being ab initio void. d. Swastik Coal Corporation Pvt. Ltd. v. Pr. CIT-2 ITA No.486/Ind /2018 8. We find that the above view of the Id. Pr. CIT is not correct. In view of the aforesaid discussion, moreover, the coordinate bench has also examined the issue in the case of Texport Overseas Pvt. Ltd. in IT(TP)A No.1722/Bang/2017. Admittedly, in this case, the order has been revised purely on the basis that the assessing officer has not referred to determine the arm's length price to the TPO. Since the provision itself stood omitted at the time when the order was passed by the Ld. Pr. CIT. under these undisputed facts in the light of the judaement of the Hon'ble Supreme Court rendered in the case of General Finance Company (supra) as well as the order of the coordinate bench rendered in the case of Texport Overseas P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reverse, revoke, set aside, vacate, void, withdraw. 13. On a conjoint reading of the three expressions delete , omit , and repeal , it becomes clear that delete and omit are used interchangeably, so that when the expression repeal refers to delete it would necessarily take within its ken an omission as well. This being the case, we do not find anv substance in the argument that a repeal amounts to an obliteration from the very beginning, whereas an omission is only in futuro. If the expression delete would amount to a repeal , which the appellant s counsel does not deny, it is clear that a conjoint reading of Halsburv's Laws of England and the Legal Thesaurus cited here in abvove both lead to the same result, namely, that an omission being tantamount to a deletion is a form of repeal. 18. We also find that Section 6 could not possibly apply to the facts in Rayala Corporation s case for yet another reason. Clause 2 of the amendment rules which was referred to in paragraph 14 of the judgment in Rayala Corporation reads as follows:- In the Defence of India Rules, 1962, rule 132A (relating to prohibition of dealings in foreign exchange) sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Revenue, clarifies the law in holding that an omission would amount to a repeal. The converse view of the law has led to an omitted provision being treated as if it never existed, as Section 6 of the General Clauses Act would not then apply to allow the previous operation of the provision so omitted or anything duly done or suffered there under. Nor may a legal proceeding in respect of any right or liability be instituted, continued or enforced in respect of rights and liabilities acquired or incurred under the enactment so omitted. In the vast majority of cases, this would cause great public mischief, and the decision of Fibre Board case is therefore clearly delivered by this Court for the public good, being, at the very least a reasonably possible view. Also, no aspect of the question at hand has remained unnoticed. For this reason also we decline to accept Shri Aggarwal's persuasive plea to reconsider the judgment in Fibre Board case. This being the case, it is clear that on point one the present appeal would have to be dismissed as being concluded by the decision in Fibre Board case. 34. Shri Radhakrishnan, learned senior advocate appearing on behalf of the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter, then, unless a different intention appears, the repeal shall not affect the continuance of any such amendment made by the enactment so repealed and in operation at the time of such repeal. 33. A reading of this Section would show that a repeal by an amending Act can be by way of an express omission. This being the case, obviously the word ''repeal in both Section 6 and Section 24 would, therefore, include repeals bv express omission. The absence of any reference to Section 6A, therefore, again undoes the binding effect of these two judgments on an application of the 'per incuriam principle. 34. Thirdly, an earlier Constitution Bench judgment referred to earlier in this judgment, namely, State of Orissa v. M.A. Tulloch Co., [1964) 4 SCR 461 has also been missed. The Court there stated: ....Now, if the legislative intent to supersede the earlier law is the basis upon which the doctrine of implied repeal is founded could there be any incongruity in attributing to the later legislation the same intent which Section 6 presumes where the word 'repeal' is expressly used. So far as statutory construction is concerned, it is one of the car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not retrospective. In support, she relied upon the judgment of Sobha City vs. ACIT in ITA No.2936/Bang/2018 in which the case was restored to the file of the Assessing Officer with the direction to examine the claim of expenditure in accordance with the provision of Section 40A(2) of the IT Act. She also placed reliance upon the decision rendered by the Mumbai Bench of Tribunal in the case of Firemenich Aromatics India Pvt. Ltd. vs. ACIT in ITA No. 348/Mum/2014 dated 15.07.2020 in which the decision rendered by the Hon ble Apex Court in the case of Fiber Bores Pvt. Ltd. (2015) 52 Taxmann.com 135. Further, she placed reliance in the case of M/s. Shree Bhagwati Steel Rolling Mills Ltd. (CA No.4280/2007 dated 24.11.2015 which were not considered by the Tribunal as well as the by Hon ble High Court in the case of Texport Overseas Pvt. Ltd. in ITA No.392/2018 dated 12.21.2019. 7. We have heard the rival submissions and also perused the relevant facts arising out from the records on the legal issue raised by the ld. counsel. It is an undisputed fact that the SDT for purchase of office space as inventory was by way of Slump Sale of a going concern w.e.f. 28th March, 2016. The assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... General Clauses Act for sake of ready reference are reproduced herein below:- 6 Effect of repeal. Where this Act, or any [Central Act] or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not (a) revive anything not in force or existing at the time at which the repeal takes effect; or (b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or (d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repealing Act or Regulation had not been pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the pending proceedings shall not continue but fresh proceedings for the same purpose may be initiated under the new provision. 10. Thus, if a provision or statute is unconditionally omitted without any saving clause in favour of the pending proceedings, all actions must stop where such an omission is found, especially when action has been taken after the provision has been omitted. During the course of argument a reference was made to the judgment of Hon ble Supreme Court in the case of Fiber Boards (P) Ltd., Bangalore v. Commissiioner of Income Tax, Bangalore, (2015) 10 SCC 333 and Shree Bhagwati Steel Rolling v. Commissioner of Central Excise (2016) 3 SCC 643 to convass the point that the earlier judgments of Constitutional Bench in the case of Rayala Corporation Pvt. Ltd., 1970 SCR 1 (69) and Kohlapur Cane Sugar [supra] have been not followed or have been overruled. First of all, nowhere the Hon ble Apex Court in both the judgments have overruled earlier two judgment of the Constitutional bench of the Hon ble Apex Court rather they have explained it in detail and went on to held that the word repealed in both section of 6A and Section 24 of General Clauses Act would in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct would not be attracted. 11.1 The Apex Court in the case of Fibre Boards (supra) was of the view that there is no need for the later enactment to state in express terms that an earlier enactment has been repealed by using any particular set of words or form of drafting but that if the legislative intent to supersede the earlier law is manifested by the enactment of provisions as to effect such supersession, then there is in law a repeal notwithstanding the absence of the word repeal in the later statute. Repeals may take any form and so long as a statute or part of it is obliterated, such obliteration would be covered by the expression repeal in Section 6 of the General Clauses Act. All that is required is that an intention to abrogate the enactment or portion in question should be clearly shown. 11.2 The Apex Court held that the idea of omitting section 280ZA and introducing Section 54G on the same date was to do away with the tax credit certificate scheme together with the prior approval required by the Board and to substitute the repealed provision with the new scheme contained in Section 54G.Once Section 280ZA is omitted from the statute book, section 280Y (d) havin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 96ZP of the Central Excise Rules. When the lease expired, the appellant surrendered its registration certificate on 1.6.2000. Section 3A was omitted in 2001. On 19.8.2005 notice was issued to the appellant demanding interest for delayed payment of central excise duty under section 3A of the Central Excise Act for the period 1997 to 2000. 12.1 The question framed before the Hon ble High Court was whether omission of the compounded levy scheme in 2001 wipes out the liability of the assessee for the period during which the scheme was in operation. The Hon ble High Court held that on omission of section 3A, the liability of the assessee was not wiped out. 12.2 The appellant contended that there is a fundamental distinction between repeal and an omission , in the case of a repeal the statute is obliterated from the very beginning whereas in the case of an omission what gets omitted is only from the date of omission and not before. This being the case, it is clear that things already done in the case of an omission would be saved. However, a repeal without a savings clause like section 6 of the General Clauses Act would not so save things already done under the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he purpose of Section 24 of the General Clauses Act. Since the same expression, namely, repeal is used both in Section 6 and Section 24 of the General Clauses Act, the construction of the said expression in both sections would, therefore, include within it omissions made by the legislature. 12.6 The Court was also of the view that merely because the Constitution Bench in case of Rayala Corporation referred to a repeal not amounting to an omission this would not undo the effect of decision in Fibre Board s case and the statement of the law in Rayala Corporation is no longer the law declared by the Hon ble Supreme Court after the decision in the Fibre Board s case. Fibre Board (supra) is a recent judgment which clarifies the law in holding that an omission would amount to a repeal . 13. The converse view of the law led to an omitted provision being treated as if it never existed, as section 6 of the General Clauses Act would not then apply to allow the previous operation of the provision so omitted or anything duly done or suffered thereunder. Nor may a legal proceeding in respect of any right or liability be instituted, continued or enforced in respect of rights and liabi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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