AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (12) TMI 1719
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....he order of the Deputy Commissioner Of Income Tax passed in pursuance of the directions issued by the Dispute Resolution Panel (DRP) is against the principles of naturel justice and without appreciation of material facts. 3. The Dispute Resolution Panel (DRP) ought to have noted that it has no power to enhance the disallowance without affording an opportunity to the appellant to argue and submit its reasons and objections. 4. The DRP failed to appreciate that the Deputy Commissioner of Income Tax has initiated proceedings without applying his mind as to the reasonableness or otherwise of the extent of expenditure incurred in respect of remuneration to directors. 5. The DRP failed to note that in respect of the earlier assessment year,....
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....cted by the learned DR on the premise that these grounds were never raised before the DRP nor were they raised in the original grounds of appeal. Therefore, it cannot be admitted. 3. The learned counsel for the assessee has further contended that AO has made a reference under section 92CA, having observed that the assessee has entered into specified domestic transaction as this case is covered under section 928A of the IT Act but later on there was amendment in section 92BA by the Finance Act, 2017 w.e.f. 01.04.2017 whereby clause (ii) of section 92BA relating to any expenditure in respect of which payment has been made or is to be made to a person* referred* to *clause (b) of sub section 2 of section 40A. was omitted and on* account of i....
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....nion of India in Appeal (Civil) 2132 of 1994 vide judgment dated 01.02.2000 in which the constitution bench has held that section 6 only applies to repeals and not to omissions, and applies when the repeal is of a Central Act or Regulation and not as a Rule. It was further clarified by the Apex Court that in such a case the court is to look to the provisions in the rule which has been introduced after omission. of the previous rule to determine whether a pending proceeding will continue or lapse. If there is a provision therein that pending proceedings shall continue and be disposed of under the old rule as if the rule has not been deleted or omitted then such a proceeding will continue. If the case is covered by Section 6 of the General Cl....
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....penditures in respect of which payment has been made or is to be made to person referred to in clause (b) of sub section 2 of section 40A of the Act is not on the statute since beginninq in view of the amendment and in the light of various judicial pronouncements the reference made by AO to TPO is bad in law, the AO is required to examine the claim of the assessee in the light of other provisions of the Act. 7. Having carefully examined the orders of authorities below in the light of rival submissions and relevant provisions and various judicial pronouncements, we find that by virtue of the insertion of section 92BA on the statute as per clause (i), any expenditure in respect of which payment has been made or is to be made to person refer....
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....pending proceeding will continue or lapse. If there is a provision therein that pending proceedings shall continue and be disposed of under the old rule as if the rule has not been deleted or omitted then such a proceeding will continue. If the case is covered by Section 6 of the General Clauses Act or there is a pari-materia provision in the statute under which the rule has been framed in that case also the pending proceeding will not be affected by omission of the rule. In the absence of any such provisions in the statute or in the rule, the pending proceeding will lapse under rule under which the notice was issued or proceeding being omitted or deleted". 8. In the case of General Finance Co., Vs. ACIT, their Lordship Of the Apex Court ....
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....n favour of the assessee and against the revenue. Accordingly, the appeals are dismissed. " 9. From the aforesaid judgments, it has become abundantly clear that once a particular provision of section is omitted from the statute, it shall be deemed to be omitted from its inception unless and until there is some saving clause or provision to make it clear that action taken or proceeding initiated under that provision or section would continue and would not be left on account of omission. 10. In the instant case, undisputedly, by the Finance Act, 2017, clause (i) of section 92BA has been omitted w.e.f. 01.04.2017. Once this clause is omitted by subsequent amendment, it would be deemed that clause (i) was never been on the statute. While om....