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TMI Blog2024 (5) TMI 1169X X X X Extracts X X X X X X X X Extracts X X X X ..... order is not legal and deserves to be set aside. Decided in favour of assessee. - Shri M Balaganesh, Accountant Member And Shri Vimal Kumar, Judicial Member For the Assessee : Shri Salil Aggarwal, Sr. Advocate, Mr. Madhur Aggarwal, Advocate, Mr. Uma Shankar, Advocate For the Department : Shri Rajesh Kumar, CIT(DR) ORDER PER VIMAL KUMAR, JM The appeal is against Learned Assessing Officer s order dated 30.04.2021 making addition of Rs. 7,47,40,000/- on account of TP adjustment. 2. Brief facts of the case are that on 29.11.2016 assessee e-filed the return of income. The case was selected for complete scrutiny and statutory notice under section 143(2) of the Income Tax Act, 1961 (the Act ) dated 12.07.2017 was issued. Notices under section 142(1) of the Act along with questionnaires were issued to the assessee from time to time. Assessee company filed requisite details. Reference to the Transfer Pricing Officer ( TPO ) was made to determine Arm s Length Price under section 92CA(3) of the Act after obtaining prior approval of the Commissioner of Income Tax, Delhi. After considering the objections, the Learned TPO passed order dated 31.10.2019. Assessee preferred objections to the dra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s place another provision dealing with the same contingency is introduced without a saving clause 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. 5. Learned representative for appellant / assessee submitted that Hon ble ITAT Delhi Bench in ITA No. 635/Del/2021 titled as Yorkn Tech Pvt. Ltd. vs DCIT vide order dated 18.08.2021 has observed that 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. Similar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidering the Hon'ble Supreme Court decision in the case of Fibre Boards and Shree Bhagwati Steel. The earlier decision of Hon'ble Apex Court in the case of Kolhapur Cane Sugar and Rayala Corporation are also not binding and their observation are in nature of obiter dicta after the decision of Hon'ble Supreme Court in the case of Fibre Board and Shree Bhagwati Steel. The decision rendered by Hon'ble Supreme Court in the case of Fibre Board and Shree Bhagwati Steel have binding precedent on all courts in India including this Tribunal. Thus in view of the above discussion, it is proved beyond doubt that the reigning decision on the issue of effect of omission of an Act/Rule are the decisions of Hon'ble Supreme Court in the case of Fibre Boards and Shree Bhagwati Steel wherein it is held that the omission of an Act/Rule would not invalidate or annul any proceedings instituted or continuing when the enactment was there in the statute books. Hon'ble Supreme Court decision in the case of Kolhapur Canesugar Works Ltd. on which the decision of Hon'ble Karnataka High Court in the case of Texport is based, has already been overruled by the Hon'ble Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidered as a law and never been existed. 10. A Co-ordinate Bench of Hon ble ITAT Delhi in ITA No. 2078/Del/2022 titled as DCIT vs. DLF Urban Pvt. Ltd. decided on 8.4.2024 has observed:- 27. Coming to merits of the additional ground, having given a thoughtful consideration to the matter on record and the submissions we observe that the ld. DR could not dispute the fact that the Hon ble Karnataka High Court in case of Texport Overseas Pvt. Ltd. (supra) and the coordinate Benches of this Tribunal in several cases, as referred by the ld. AR has held that once this section is omitted w.e.f. 01.04.2017, the resultant effect is that it had never been passed to be considered as a law and never been existed. However, in the light of the Explanatory Notes to the Finance Act, 2017 relied by the ld. DR along with the judgement of the Hon ble Supreme Court in the case of Fiber Boards Pvt. Ltd. (supra) and Shree Bhagwati Steel Rolling Mills (supra) which have been considered by the Mumbai Bench in the case of Firemenich Aromatics (India) Pvt. Ltd. (supra) we need to decide the impact of the judgement of the Hon ble non-jurisdictional High Court in a situation in which these decisions canvassed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the Tribunal, outside the jurisdiction of that Hon ble High Court and in the absence of a jurisdictional High Court decision to the contrary, could not be faulted for following the same. Their Lordships observed that, It should not be overlooked that the Income-tax Act is an All-India statute . Until a contrary decision is given by any other competent High Court, which is binding on a Tribunal in the State of Bombay, it has to proceed on the footing that the law declared by the High Court, though of another State, is the final law of the land . Of course, these observations were in the context of a provision being held to be unconstitutional, an issue on which the Tribunal could not have adjudicated anyway, as evident from the observation Actually, the question of authoritative or persuasive decision does not arise in the present case because a Tribunal constituted under the Act has no jurisdiction to go into the question of constitutionality of the provisions of that statute but nevertheless the respect for the higher judicial forum was unambiguous. In Tej International Pvt Ltd Vs DCIT [(2000) 69 TTJ 650 (Del)], a coordinate bench has, on this issue, observed that In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s have upheld the plea that non-consideration of a decision of Jurisdictional Court or of the Supreme Court can be said to be a mistake apparent from the record . The decisions of Hon ble non-jurisdictional High Courts are thus placed at a level certainly below the Hon ble High Court, and it s a conscious call that is required to be taken with respect to the question whether, on the facts of a particular situation, the non-jurisdictional High Court is required to be followed. The decisions of non-jurisdictional High Courts do not, therefore, constitute a binding judicial precedent in all situations. To a forum like us, following a jurisdictional High Court decision is a compulsion of law and absolutely sacrosanct that way, but following a non-jurisdictional High Court is a call of judicial propriety which is never absolute, as it is inherently required to be blended with many other important considerations within the framework of law, or something which cannot be, in deserving cases, deviated from. [Emphasis, by underlining, supplied by us] 8 . At one place, this decision, inter alia, states that To a forum like us, following a jurisdictional High Court decision is a compulsion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bai Bench had considered the issue of repeal/omission made in a statute and the consequences thereof. Since right to appeal is a substantive and, certainly, if it was there in the statute when the appeal was filed and, subsequently, if the statute had omitted the provision, the substantive right of appeal vested in a party would not be taken away by holding the repeal to be retrospective. However, in the case in hand, a substantive provision, being infact a charging provision, has been omitted/deleted and consequently benefit of the same has to be given to the assessee. Thus, we are inclined to follow the Hon ble Karnataka High Court judgement and, on that basis, the additional ground raised by the assessee deserves to be allowed and consequently the whole exercise done by ld. AO to bench mark the transaction of purchase of development right, stands being void. 11. From above observation, it is evident that the request/submission of learned departmental representative for reference to the President, ITAT to constitute Special Bench because ITAT Mumbai and Delhi Benches of equal strength have given conflicting judgments has been considered and not granted. Therefore the request of L ..... X X X X Extracts X X X X X X X X Extracts X X X X
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