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TMI Blog2023 (6) TMI 1368X X X X Extracts X X X X X X X X Extracts X X X X ..... AS HIGH COURT ] the order u/s 92CA(3) of the Act is time barred by 1 day. Thus as the order of the TPO was barred by limitation, therefore, there was no eligible assessee in the case of the assessee in terms of provisions of subsection (15) to Sec. 144C of the Act. Appeal of the assessee is allowed. - Shri Aby T Varkey, Judicial Member Shri Amarjit Singh, Accountant Member For the Appellant : Madhur Agrawal/Fenil Bhatt/Darshan Dalal. For the Respondent : Jayant B Jhaveri. ORDER PER AMARJIT SINGH (AM): This appeal filed by the assesse is directed against the order passed by the CIT(DRP-1), Mumbai, dated 15.03.2021 for A.Y. 2016-17. The assessee has raised the following grounds before us: 1. On the facts and in the circumstances of the case and in law the order dated 1 November 2019 passed by the Learned Asst. Commissioner of Income-tax (Transfer Pricing)-1(2)(2), Mumbai ('Ld. TPO) under section 92CA of the Act is beyond the time limit prescribed under section 92CA(3A) r.w.s 153 of the Income-tax Act, 1961 (Act), thus making the transfer pricing order and resultant final assessment order dated 30 April 2021 is illegal, bad in law, null and void and liable to be quashed. The fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be dropped. 6.1 On the facts and in the circumstances of the case and in law, the learned AO erred in initiating penalty proceedings under section 271(1)(c) of the Act without appreciating that the Appellant has neither concealed any particulars of its income nor furnished any inaccurate particulars of the income. The Appellant craves leave to alter, amend or withdraw all or any of the grounds herein or add any further grounds as may be considered necessary either before or during the hearing. 2. Fact in brief is that return of income declaring total income of Rs.77,60,27,700/- was filed on 29.11.2016. The case was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued to the assessee company on 17.07.2017. The assessee company DHL Logistics Pvt. Ltd. (DLPL) is a logistics services provider offering a comprehensive portfolio of international, domestic and specialised freight handling services. It is an indirect subsidiary of Deutsche Post AG (DPAG), the ultimate payment company of DLPL. The DLPL and its associated enterprises (AE s) in the DHL network of companies may be characterised as freight handling companies with normal risk operating in the internatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der sub-section (3) may be made at any time before 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 1538 for making the order of assessment or reassessment or recomputation or fresh assessment, as the case may be, expires; (emphasis supplied) As can be seen from the above, the TPO can pass an order under section 92CA of the Act at any time before 60 days prior to the due date prescribed under section 153 of the Act for pasting the assessment order. Section 153 of the Act (as applicable to AY 2016-17) prescribes a time limit of 21 months from the end of the assessment year for completion of assessment. Further, where a reference is made to the TPO for determination of ALP, the time limit is further extended by 12 months. Accordingly, the due date for passing the assessment under in the case of the Appellant for AY 2016-17 was 31 December 2019. Consequently, in terms of section 92CA(3A) of the Act, the 60 day prior to 31 December 2019 (i.e 60 day from 31 December 2019) falls on 1 November 2019. Accordingly, the due date for the TPO to pass the transfer pricing, order for AY 2016-17 should be at any time befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, the draft assessment order dated 07.12.2019 and the final assessment order passed by the A.O on 30.04.2021 were barred by limitation. 8. The ld. Counsel submitted that the order passed by the transfer pricing officer on 01.11.2019 is time barred by 1 day since the impugned order would have been passed on or before 31.10.2019 The ld. Counsel further submitted that as per provisions of Sec. 92CA(3A) of the Act in a case where the reference is made to the TPO, the TPO is required to pass order u/s 92CA(3A) of the Act at any time before 60 days prior to the date on which period of limitation referred to in Sec. 153 for making the assessment order expires. The ld. Counsel also submitted that the period of limitation for making of order of assessment as per Sec. 153 of the Act is two years and where a case is referred u/s 92CA of the Act to the TPO the period of limitation shall be 3 years from the end of the assessment year in which the income was first assessable. He further submitted that in the case of the assessee in accordance with provisions of Sec. 153 of the Act the period of limitation for completion of the assessment as per provisions of Sec. 153 of the Act is 31.12.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ixty 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: Section 153(1) Time limit for completion of assessment and reassessments- (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) (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 subsection (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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o this court to just consider the word to by ignoring prior . The word prior in the 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, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch denotes the starting point or period of direction 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 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 assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment cannot claim that the time 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 ena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) on 01.11.2019 whereas the limitation for passing the said order u/s 92CA(3) expires on 31.10.2019 Therefore, taking into consideration the provision of the Act and decision of Hon ble Madras High Court in the cases referred supra the order u/s 92CA(3) of the Act is time barred by 1 day. Further the ld. Counsel has mentioned the provisions of Sec. 144C(15) of the Act pertaining to the eligible assesse the same is reproduced as under: (b) eligible assessee means (i) Any person in whose case the variation referred to in subsection(1) arises as a consequence of the order of the Transfer Pricing Officer passed under sub-section (3) of section 92CA; and (ii) (ii) any non-resident not being a company, or any foreign company. After referring the aforesaid provisions the ld. Counsel contended that since the order of the TPO was barred by limitation, therefore, there was no eligible assessee in the case of the assessee in terms of provisions of subsection (15) to Sec. 144C of the Act. 11. In this regard, we find that coordinate bench of the ITAT on the similar issue on identical facts in the cases i.e (i) Strides Shasum Limited Vs. DCIT, Circle 15(3)(2) vide ITA No. 2877/Mum/2014 dated 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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