TPO lacks jurisdiction for upward adjustment under omitted Section 92BA(i) after Finance Act 2017

ITAT Ahmedabad ruled that TPO/AO lacked jurisdiction to make upward adjustment under Section 92BA(i) for Specified Domestic Transactions after the provision was omitted by Finance Act 2017 effective 01.04.2017. The tribunal held that when a statutory provision is unconditionally repealed without saving clause, it becomes non-existent and cannot apply to pending proceedings. The TPO/AO's order was deemed void ab initio and without legal basis. ITAT upheld CIT(A)'s decision deleting the upward adjustment, ruling against revenue.

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Issues involved: Appeal by Revenue against CIT(A) order regarding upward adjustment in specified domestic transactions u/s 143(3) r.w.s. 144C of the Income-tax Act, 1961 for AY 2015-16.

Summary:
1. The Revenue appealed against the CIT(A)'s order deleting the upward adjustment of Rs. 3,45,39,464/- in specified domestic transactions.
2. The CIT(A) held that the transactions were not international and hence not covered u/s 92BA of the Act.
3. The Revenue contended that the CIT(A) erred in deleting the adjustment.
4. The assessee cited the judgment of the Hon'ble Karnataka High Court and other ITAT benches to support their case.
5. The Revenue supported the order of the TPO and Assessing Officer.
6. The Tribunal considered the applicability of Section 92BA(i) post its omission from the statute by the Finance Act, 2017.
7. It was held that the omission of Section 92BA(i) rendered the decision by the AO/TPO invoking it as invalid and without jurisdiction.
8. Relying on the Karnataka High Court's judgment, the Tribunal upheld the CIT(A)'s decision to delete the upward adjustment.
9. The Tribunal dismissed the Revenue's appeal, declaring the TPO/AO's order as void ab initio and without jurisdiction.

Order pronounced on 10th May, 2024 at Ahmedabad.

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