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TMI Blog2023 (5) TMI 1203X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 30.01.2014 passed under section 92CA(3) is without jurisdiction and bad in law since the same is passed beyond the time limit provided under section 92CA(3A) of the Act. 24. Withour prejudice to the above, the final assessment order dated 30.01.2015 passed under section 143(3) read with section 144C (13) of the Act is without jurisdiction and bad in law as the same is passed beyond the time limit provided under section 153 of the Act." 3. Assailing the action of the Transfer Pricing Officer [TPO] to have passed the Transfer Pricing Adjustment (TPA), after the expiry of time limit prescribed by Section 92CA(3) of the Act, which according to the Ld. AR has expired on 29.01.2014; and since in the instant case the TPO has passed the Transfer Pricing order u/s 92CA(3) of the Act on 30.01.2014, the same is time barred and therefore without jurisdiction. 4. Per contra, the Ld. CIT-DR opposed the admission of the additional ground no. 23 & 24 by submitting that the assessee has not raised the same before the lower authorities. So, therefore, it is precluded from raising the same before the Tribunal for the first time. 5. In his rejoinder, to the preliminary objection of Ld. DR, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by M/s. MSM (erstwhile name of assessee) on extended credit facility to its AE; and Rs.1,89,88,67,100/-on account of Arm's Length compensation receivable by the assessee for re-structuring of business. And thus made total Transfer Pricing Adjustment of Rs.255,74,77,884/-to the income of the assessee. Thereafter, the AO had passed the draft assessment order dated 29.03.2014 proposing to assess the income at Rs.435,02,38,320/-. The assessee moved against the draft assessment order before the Ld. DRP and pursuant to which Ld. DRP gave certain direction to AO on 19.12.2014, pursuant thereto the AO has passed the final assessment order dated 30.01.2015 u/s 143 r.w.s. 144C(13) of the Act determining the total income of the assessee at Rs.289,18,03,600/-as against the total income of Rs.73,48,87,829/-as returned by the assessee in its return of income. The legal issue raised by assessee is against the TPO order/Transfer Pricing Adjustment from notional interest on AE [outstanding receivables from its Associate Enterprises (AE)] i.e. MSM Satellite (Singapore) Pvt. Ltd. (hereinafter "MSMS") to the tune of Rs.27,25,10,236/-and Transfer Pricing Adjustment from business re-structuring to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me to make a meaningful audit of transfer price in cases referred to them. 2. With a view that the Transfer Pricing Officers get sufficient time to make the audit of transfer price and also to provide Assessing Officers sufficient time to make assessment in cases involving international transactions, the time limits specified in sections 153 and 153B for making the assessment or reassessment, in cases where a reference has been made to the Transfer Pricing Officer, has been revised. The revised time limits in such cases shall be the time limits specified under the aforesaid sections, as increased by twelve months. Further, it has also been provided that the Transfer Pricing Officer shall determine the Arm's length price at least two months before the expiry of statutory time limit for making the assessment or reassessment. Thus, a time-limit has been provided in the statute, making it obligatory for the TPO to complete audit of transfer price within the stipulated time." 11. We have heard rival submissions and perused the material on record. Section 92CA(3A) of the Act provides for the time limit for passing the transfer pricing order. The sub-section (3A) to section 92CA of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er pricing order passed after the limitation time prescribed by statute i.e. during 60 days prior to the due date of completion of assessment is time barred under section 92CA(3A) r.w.s. 153 of the Act. Accordingly, the transfer pricing order was quashed being barred by limitation. The relevant finding of the Hon'ble High Court (Division Bench) reads as follows:- "14. In the present cases, the Financial Year is 2015-16 and the assessment year is 2016-17. The period of 21 months would commence on 31.03.2017, the assessment year ended on 31.12.2018 normally and the extended period would end on 31.12.2019 and not on 01.01.2020. The contention of the appellants that the time to pass the assessment order would end at 00.00 hours on 01.01.2020, is fallacious as 31.12.2019 would end at 23:59:59 and 00.00 is regarded as the next day. A day for the purpose of reckoning the date ends before the stroke of midnight and the next date would commence at midnight immediately after the expiry of the previous day. The last date would be the last day of the month (31.12.2019), which cannot be the first day of the next month (01.01.2020). The "date" must not be reckoned with respect to sun rise but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch contention is that 00.00 hours of 01.01.2020 denotes not only the beginning of the next day of the month, but also the fact that it comes after 23:59:59 hours on 31.12.2019 and by such time, the time limit had already expired. By resorting to such fallacious argument, the department wants to relate 00:00 hours of 01.01.2020 to 31.12.2019 and stretch it to 01.01.2020 to extend the period of limitation for the entire day of 01.01.2020, which cannot be permitted. Even as per Section 153, no order can be passed at any time after expiry of twenty one month's implying that the order has to be passed before 23:59:59 hours on 31.12.2019. The provision cannot be considered ignoring the words "at any time after expiry", in the opinion of this court. 21. It will be useful to refer to the judgment of the Apex Court in B.N. Agarwalla v. State of Orissa, [(1995) 6 SCC 509], taking into consideration Section 5 of the General Clauses Act and the relevant passage of the same reads as under: "6.Sub-section (7) of Section 41-A provides for automatic transfer to the Arbitration Tribunal of all arbitration proceedings of the kind specified in sub-section (1) which were "pending before any arbitr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arbitration proceeding including those in which the award alone remained to be made "by the said date" stood transferred to the Arbitration Tribunal. In other words, if the arbitration proceedings had been closed but the arbitrator had not made the award till the midnight between 25-3-1983 and 26-3-1983 when the Act came into force, it was a pending arbitration proceeding governed by sub-section (7). Acceptance of the appellant's contention would amount to holding that even though the Act had come into force on the midnight between 25-3-1983 and 26-3-1983, an award made thereafter on 26-3-1983 was not a pending arbitration proceeding on the date of commencement of the Act. Unless meaning of the expression "by the said date" used in sub-section (7) be only that suggested by learned counsel for the appellant, the construction which would harmonise with the meaning of the earlier expression, must be given to the provision. 8.We may now consider the meaning of the word 'by' for ascertaining the meaning of the expression "by the said date". Meaning of the word 'by' in some of the dictionaries is: Black's Law Dictionary (Sixth Edn.) "Before a certain time; ... not later th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titutional Bench Judgment of the Hon'ble Supreme Court in Commr. of Customs v. Dilip Kumar & Co., [(2018) 9 SCC 1 : 2018 SCC OnLine SC 747], which reads as under: "17. In doing so, the principles of interpretation have been evolved in common law. It has also been the practice for the appropriate legislative body to enact the Interpretation Acts or the General Clauses Act. In all the Acts and Regulations, made either by Parliament or Legislature, the words and phrases as defined in the General Clauses Act and the principles of interpretation laid down in the General Clauses Act are to be necessarily kept in view. If while interpreting a statutory law, any doubt arises as to the meaning to be assigned to a word or a phrase or a clause used in an enactment and such word, phrase or clause is not specifically defined, it is legitimate and indeed mandatory to fall back on the General Clauses Act. Notwithstanding this, we should remember that when there is repugnancy or conflict as to the subject or context between the General Clauses Act and a statutory provision which falls for interpretation, the Court must necessarily refer to the provisions of the statute." 24. The finding so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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) 4 SCC 297 : 2002 SCC OnLine SC 413], 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in general parlance, would mean 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 01.11.2019 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 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime limits are not mandatory. Hence, the contention 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 con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the present Appeal is as under:- Sr. No. Particulars Relevant dates 1 Assessment Year (AY) 2010-11 2 End of Assessment Year 31.03.2011 3 Due date for completion of assessment under section 153(1) i.e. 3 years from the end of AY 31.03.2014 4 Time Limit for passing the order under section 92CA(3A) i.e. 60 days prior to the date prescribed under section 153 5 Less: Date on which limitation expires under section 153 i.e. 31.03.2014 1 day 6 Less: Remaining days of March (1 March 2014 to 30 March 2014) 30 days 7 Less: Numbaer of days of February (of February 2014-28 Feb 2014) 28 days 8 Less: Number of days of January (30 and 31 January 2014) 2 days 9 Due date for passing the order under section 92CA(3) of the Act i.e. 61 days from 31 March 2014 29.01.2014 10 Date of passing of the impugned TP order in the present case under section 92CA(3) 30.01.2014 14. Therefore, we note that in the present case the TPO has passed the order only on 30.01.2014 which was after the limitation period as prescribed u/s 92CA(3) of the Act [supra]. We note the similar view has been taken by the Tribunal in the following cases:- (i) DCIT v. Tata Power Solar Systems ..... X X X X Extracts X X X X X X X X Extracts X X X X
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