TaxTMI 
TaxTMI 
2020 (2) TMI 888
X X X X Extracts X X X X
X X X X Extracts X X X X
....order dated29.12.2017 passed u/s. 143(3) of the Act . The impugned order of imposing penalty u/s.271BA of Act has been passed on 25.06.2018 by the Ld. A.O without affording reasonable opportunity to the appellant and without exercising his discretion as vested by the statute. However without adjudicating the appeal despite the fact that the particular provision of specified domestic transaction has been omitted from statute by the Finance Act, 2017 the Ld. CIT (A) is erred in upholding the penalty order. Therefore orders of forum below are unsustainable and impermissible under law. B. For that the appellant craves leave to add, alter, amend, substitute any other grounds if so arises at the time of hearing of this appeal. 2. Brie....
X X X X Extracts X X X X
X X X X Extracts X X X X
....O, the assessee has filed report in prescribed Form No.3CEB in terms of provision of Section 92E of the Act, though it was filed after the due date of filing of return, however, there is no malafide intention behind it and non-filing of audit report is only a technical default and, therefore, no penalty can be levied. Further, ld. AR filed a copy of the order passed by the CIT(A), dated 30.07.2019 allowing the quantum appeal of the assessee and submitted that the CIT(A) has deleted the addition made by the AO on account of adjustment to the total payment of sub-contract amount, holding therein that the type of transactions made by the assessee have been removed from the definition of 'Specified Domestic Transaction' w.e.f.01.04.2017. Furthe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nvalid. On perusal of the provisions of Section 92BA of the Act, we found that once the clause in the said section is omitted by the subsequent amendment, it would be deemed that clause(i) was never been on the statute and there is no specification in omitting the said clause by the statue as to whether the proceeding initiated or action taken on this, shall continue or not. We have also perused the order of the CIT(A) dated 30.07.2019, copy of which is placed on record, thereby deleting the quantum addition in the case of the assessee following the above amendment in the provisions and relying on the decisions of Kolhapur Canesugar Works Ltd. (AIR 200 SC 811), General Finance Co. 257 ITR 338 (SC), M/s GE Thermometric India Pvt. Ltd., ITA N....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s as to whether on account of omission of clause (i) from the statute, the proceedings already initiated or action taken under clause (i) becomes redundant or otiose. In this regard, our attention was invited to judgment of the Apex Court in the case of Kolhapur Canesugar Works Ltd., (supra) in which the impact of omission of old rule 10 and 10A was examined. Having carefully examined the issue in the light of provisions of section 6 of the General Clauses Act, their Lordship has observed "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 p....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... be considered as a law that never exists and therefore, when the assessment orders were passed in 2006, the AO was not justified in taking note of a provision which was not in the statute book and denying benefit to the assesses. The whole object of such omission is to extend the benefit under Section 10B of the Act irrespective of the fact whether during the period to which they are entitled to the benefit, the ownership continues with the original assessee or it is transferred to another person. Benefit is to the undertaking and not to the person who is running the business. We do not see any merit in these appeals. The substantial question of law is answered in favour of the assesses and against the revenue. Accordingly, the ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt of provisions of section 92BA Clause (i) of the Act. Now when this clause (i) has been omitted from the statute by virtue of the aforesaid amendments, the AO is required to adjudicate the issue of claim of expenditures in accordance with law after affording opportunity of being heard to the assessee. We therefore set aside the orders of the AO and the DRP and restore the matter to the AO with the direction to readjudicate the issue of claim of expenditure incurred 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. Accordingly, since we have restored the matter to the AO, we find no justification to deal with the other issues on merit. Accordingly, app....