Appeal partially allowed due to time-barred TPO's order, rendering subsequent assessment orders invalid.

The appeal of the assessee was partly allowed, and the appeal of the revenue was dismissed as infructuous. The Tribunal found that the TPO's order was time-barred by one day, rendering subsequent assessment orders also time-barred. This made the assessee ineligible under the Act, resulting in the appeal being allowed on this ground. Other grounds raised by the parties were deemed moot.

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Issues Involved:
1. Application of transfer pricing (TP) provisions.
2. Re-computation of arm's length price for specific international transactions.
3. Calculation of surplus income for life insurance business.
4. Tax rate applicability for life insurance companies.
5. Set off of brought forward losses.
6. Deduction towards transfer from linked fund.
7. Exemption under section 10(34) for dividend income.
8. Penalty proceedings.

Summary:

1. Application of Transfer Pricing (TP) Provisions:
The Hon'ble CIT(A)/AO/TPO erred in applying TP provisions to transactions undertaken by the Appellant (a life insurance company) and making a TP adjustment to the Appellant's reported taxable surplus, as section 44 of the Income-tax Act, 1961 overrides sections 28-438.

2. Re-computation of Arm's Length Price:
The CIT(A)/AO/TPO erred in re-computing the arm's length price as NIL for international transactions related to global e-mail charges, blackberry services, and Internet and other network charges, resulting in a TP adjustment of INR 8,67,68,740. The CIT(A)/AO/TPO also erred in re-computing the arm's length price for system maintenance and support services, resulting in a TP adjustment of INR 26,90,709. The Appellant prays that these adjustments be deleted.

3. Calculation of Surplus Income:
The CIT(A)/AO erred in confirming the surplus as calculated in Form 1 of the Insurance Regulatory and Development Act, 1999 instead of the actuarial report as per the Insurance Act 1938, to be the income of the Appellant in terms of section 44, read with Rule 2 in the First Schedule to the Act.

4. Tax Rate Applicability:
The CIT(A) erred in not adjudicating the ground regarding the tax rate of 12.5% applicable to life insurance companies.

5. Set Off of Brought Forward Losses:
The CIT(A) erred in not allowing the set-off of brought forward losses available to the Appellant.

6. Deduction Towards Transfer from Linked Fund:
The CIT(A) erred in not allowing the deduction towards the amount of transfer from the linked fund from the surplus disclosed in Form 1.

7. Exemption Under Section 10(34):
The CIT(A) erred in not adjudicating the ground regarding the exemption claimed by the Appellant u/s 10(34) of the Act towards dividend income of INR 1,27,69,632.

8. Penalty Proceedings:
The CIT(A) ought to have directed the ACIT to drop the penalty proceedings.

Additional Ground of Appeal:
The assessment order dated 25 April 2013 was challenged as void and bad in law for being passed beyond the period of limitation referred to in section 153 of the Act. The Tribunal admitted this ground and found that the TPO's order dated 30.01.2013 was time-barred by one day. Consequently, the draft assessment order dated 18.03.2013 and the final assessment order dated 26.04.2013 were also time-barred, making the assessee not an eligible assessee u/s 144C of the Act. The appeal of the assessee was allowed on this ground, rendering other grounds moot.

Result:
The appeal of the assessee was partly allowed, and the appeal of the revenue was dismissed as infructuous.

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