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TMI Blog2023 (5) TMI 1410X X X X Extracts X X X X X X X X Extracts X X X X ..... e aforesaid circular to specify the period of limitation may not necessarily be equal to sixty days as specified in the Act. It is trite that the words/expressions used in Statute cannot be substituted in Explanatory notes or Board Circulars. If the limitation period is mentioned in days in the Act, the same expression has to be necessarily used in Circulars. Since delegated power of Board, cannot over-ride the Act passed by the Parliament/Legislature. Therefore, Two months as mentioned in Circular can be more or even less than sixty days. Therefore, expression stipulated in Act to calculate limitation period has to be scrupulously adhered to. Assailing the action of AO in this case to frame draft assessment order, when the TPO order was bad in law, the Ld. AR pointed out that assessee is not qualifying as eligible assessee as per the definition given in sub-section (15) to section 144C of the Act. - SHRI ABY T. VARKEY, JM AND SHRI S. RIFAUR RAHMAN, AM For the Assessee: Shri Madhur Agrawal Shri Mathrudev Vasudevan For the Revenue: Shri Karan P. Unavekar (Sr. AR) ORDER PER ABY T. VARKEY, JM : The captioned appeal has been filed by the revenue and the cross objection (CO) by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 27.05.2014. According to assessee, passing of TPO order on 30.01.2014 and the final assessment order by AO dated 27.05.2014 is bad in law, since both orders were passed beyond the period of limitation prescribed by the Statute. 5. For buttressing the legal issue, the Ld. AR pointed out that time limit prescribed u/s 153 of the Act for passing the assessment order u/s 143(3) r.w.s. 153A of the Act by AO was 31st March 2014; and, accordingly, the time limit for passing the order by TPO u/s 92CA(3A) of the Act was 29.01.2014 i.e. before sixty (60) days prior to the date on which the period of limitation referred to u/s 153B of the Act expires. And to drive this point, he drew our attention to Section 153B of the Act (relevant extract) is reproduced as under: - Time-limit for completion of assessment u/s 153A,. 153B (1) Notwithstanding anything contained in section 153, the Assessing Officer shall make an order of assessment or re- assessment (a) in respect of each assessment year falling with in six assessment years referred to in clause (b) of [sub- section (1) of] section 153A, with in a period of two years from the end of financial year in which the last of the authorizations for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of TP order passed for AY. 2009-10 30th January 2014 Delay 1 Day Delay in passing TP Order 8. Explaining the date of events (supra), the Ld. AR, pointed out that time limit prescribed u/s 153B of the Act for passing the assessment order by AO u/s 143(3) r.w.s. 153A of the Act was 31st March 2014; and, accordingly, the time limit for passing the order by TPO u/s 92CA(3A) of the Act was 29.01.2014 i.e. before sixty (60) days prior to the date on which the period of limitation referred to u/s 153B of the Act expires. Accordingly, the TPO ought to have passed TP order u/s 92CA by 29th January, 2014. And since he has passed the order on 30th January, 2014, the TP order is barred by limitation and for such a proposition, the Ld AR of the assessee relied on the following judicial precedents: Decision in the case of Hon ble High Court/Tribunal Citation Pfizer Healthcare Madras HC 320 CTR 812 Saint Gobian (I) P Ltd Madras HC 328 CTR 387 Mondeleze India Mumbai ITAT 1492/Mum/2015 (Unrep) Emerson Electric Mumbai ITAT 141 Taxmann.com 186 Accenture Solution Mumbai ITAT 141 Taxmann.com 426 Louis Dreyfus Mumbai ITAT 138 Taxmann.com 556 Sigma Aldrich Bangalore ITAT 141 Taxmann.com 431 Tata Power S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t order by 31.03.2014. However, in the present case, the AO framed the [final] assessment order on 27.05.2014 which is beyond the limitation period and so, bad in law. And for such a proposition, the Ld AR relies on the recent decision of this Tribunal in the case of M/s. Mondeleze India Food Pvt. Ltd. (1492/Mum/2015) (un-rep) dated 14th Nov, 2022 wherein the Tribunal made the following observation at para 16-17 of the order: - 16. The ld. Counsel for the assessee has further pointed that reference to DRP can only be made by eligible assessee . The expression eligible assessee has been defined in sub-section (15) to section 144C of the Act. The definition of eligible assessee is reproduced herein below: (b) eligible assessee means (i) Any person in whose case the variation referred to in sub- section (1) arises as a consequence of the order of the Transfer Pricing Officer passed under sub-section (3) of section 92CA; and (ii) any non-resident not being a company, or any foreign company A perusal of the above definition would show that eligible assessee mean any person in whose case variation arises as a consequence of the order of the TPO passed u/s. 92CA(3) of the Act. The order h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 sub-section (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) shall, notwithstanding anything contained in the first proviso, have effect as if for the words two years the words three years had been substituted 14. A conjoint reading of the relevant provisions of section 92CA(3A) and 153(1) of the Act would show that the TPO is required to pass order u/s. 92CA(3) of the Act at any time before sixty days prior to the date on which the period of limitation referred to in section 153 of the Act for making assessment order expires. 15. The Hon'ble Madras High Court in the case of M/s Pfizer Healthcare India ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, and there is no ambiguity and the intention of the legislature is clearly conveyed, there is no scope for the court to take upon itself the task of amending or alternating (sic altering) the statutory provisions. Wherever the language is clear the intention of the legislature is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 assessee is to pass an order under section 92CA (3) of the Act. As per section 92CA(3A), the order has to be passed before the expiry of 60 days prior to the date on which the period of limitation under section 153 expires. As per 92CA(4), the assessing officer has to pass an order in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 considering the meaning of the words used in the enactment in the light of any discernible purpose or object which comprehends the mischief and its remedy to which the enactment is directed. This formulation later received the approval of the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the TPO has passed the order u/s. 92CA(3) of the Act on 30/01/2014, consequently, the order passed by T.P.O. u/s. 92CA(3) of the Act is time barred by one day and we hold it to be bad in law and so is non- est in eyes of law. 19. Coming to the 2nd legal issue i.e, the assessment order (final) framed by AO on 27.05.2014 as barred by limitation, the Ld. DR has referred to Finance Act 2007 Explanatory Notes on provisions relating to Direct Taxes issued vide Circular No.3/2008 dated 12/03/2008, to support the action of AO. However, on a perusal of clause 43 of said circular reveals that the expression used to depict time limit is months , whereas in the Act, the Legislature has specified the period of limitation in days . The expression two months used in clause 43(2) in the aforesaid circular to specify the period of limitation may not necessarily be equal to sixty days as specified in the Act. It is trite that the words/expressions used in Statute cannot be substituted in Explanatory notes or Board Circulars. If the limitation period is mentioned in days in the Act, the same expression has to be necessarily used in Circulars. Since delegated power of Board, cannot over-ride the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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