TaxTMI 
TaxTMI 
TaxTMI 
2021 (7) TMI 283
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....ting the fact that, the learned AO had examined the issue as per reasons recorded for scrutiny selection (i.e mismatch in amount paid to related persons u/s 40A(2)(b) reported in audit report and ITR) vide Point 4 of show cause notice dated 23/11/2017 and hence, the order cannot be termed as erroneous. 3. Whether on the facts and circumstances, the learned CIT erred in not appreciating that, as on the date when the assessing officer was seized with the matter, the provision of section 92BA(i) stood omitted and hence, did not warrant reference to TPO vide Texport Overseas Pvt Ltd v. DCIT (ITA No.1722/Bang/2017) (Bangalore ITAT), quoted before learned CIT by assessee vide submission dated 17/02/2020. 4. Whether on the facts and circumstances, the learned CIT erred in not appreciating that, directing learned AO to refer the matter to TPO even when the related provision [ i.e 92BA(i)] stood omitted w.e.f 01/04/2017 was bad in law vide Swastik Coal Corporation Pvt Ltd v. Pr. CIT-2 (ITA No.486/lnd/2018) (Indore ITAT), quoted before learned CIT by assessee vide submission dated 17/02/2020. Order is nor prejudicial to interests of revenue 5. Whether on the facts and circumstanc....
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....ported in Audit report and ITR. The Assessing Officer while completing the assessment u/s.143(3) of the Act for the assessment year 2015-16 accepted the return of income of the assessee. 3.1 The Ld. Pr. Commissioner of Income Tax on verification of the assessment records noted as per Column No. 23 of 3CA/3CD report dated 05.09.2015 that the assessee has done transactions with related parties and reported the various transactions u/s.40A(2)(b) of the Act. The transactions relating to purchase of goods was amounting to Rs. 22,48,39,938/-. All the parties are in similar line of business and the value of domestic transaction exceeds the limit of Rs. 5 Crore. As per Section 92BA of the Act, since these were domestic transactions and as per Rule 10E, the assessee was required to obtain and furnish audit report from a Chartered Accountant in Form No.3CEB before the due date of filing of return of income which was not done by the assessee. Hence, the Assessing Officer was supposed to report these transactions to the Transfer Pricing Officer for determination of Arm's Length Price. The same was not done by the Assessing Officer. Further, the Pr. Commissioner of Income Tax also observed in ....
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....aggregate value of international transaction exceeds Rs. 5 crores which was in respect of Section 92CA of the Act. It was observed as Sections 92, 92BA ,92C and 92CA are pari-materia to each other, the implications of the order of the Hon'ble High Court (supra.) would also squarely apply to the specified domestic transactions exceeding Rs. 5 Crores in respect of Section 92BA of the Act. 4.3 The Ld. Pr. Commissioner of Income Tax in his order also observed that Explanation (2) to Section 263 of the Act, wherein it has been enshrined that for the purpose of this section, the order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interest of the revenue, if, in the opinion of the Ld. Pr. Commissioner of Income Tax or Commissioner of Income Tax - a) The order is passed without making inquiries or verification which should have been made; b).................. c) The order has not been made in accordance with any order direction or instruction issued by the Board under section 119. 4.4 The Ld. Pr. Commissioner of Income Tax further examined that the Assessing Officer has not raised any question in respect of specified domest....
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....ation laws. The resultant effect is that when a provision has been repealed /omitted without any saving clause or provision then it has to be construed that such provision had never been passed and to be considered as law which never existed. For this proposition, the Ld. Counsel for the assessee placed strong reliance on the decision of Hon'ble Karnataka High Court in the case of Principal Commissioner of Income Tax-7 Vs. Texport Overseas (P) Ltd. (2020) 114 taxmann.com 568 (Karnataka). 7. The Ld. Counsel for the assessee has also referred to the Department's Instruction No.3/2016 (F. NO.500/9/2015-APA-II) dated 10.03.2016 wherein at Para 3.4 of the said Instruction, it is stated that not in every case, the Assessing Officer shall refer the matter to the Transfer Pricing Officer but before referring such matter, the Assessing Officer must record his satisfaction that there is a need arisen for determination of ALP of specified domestic transactions for referring the matter to Transfer Pricing Officer. 8. The Ld. Counsel for the assessee submitted that in this case, the Assessing Officer was satisfied regarding genuineness of the transactions pertaining to Section 40A(2)(b) of th....
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.... and circumstances in this case. We have also considered the judicial pronouncements placed on record. That even before going into the merits of the order passed u/s.263 of the Act, we find that the assessee has challenged the legality of the said order by submitting that when the Assessing Officer ceased with the matter, the provision of Section 92BA(i) of the Act stood omitted and hence, did not warrant reference to the Transfer Pricing Officer placing reliance on the decision of the Texport Overseas Pvt. Ltd. Vs. DCIT (supra.). The assessee also contended that referring the matter by Assessing Officer to the Transfer Pricing Officer when the provision of Section 92BA(i) of the Act stood omitted w.e.f.01.04.2017, such reference was not legally warranted placing reliance on the decision of Swastik Coal Corporation Pvt. Ltd. Vs. Pr. CIT, ITA No.486/Ind/2018. 12. The assessee had relied on the decision of the Hon'ble Karnataka High Court in the case of Pr. Commissioner of Income Tax Vs. Texport Overseas (P) Ltd. (supra.) wherein in similar set of facts and circumstances, the assesse therein had entered into specific domestic transactions and it was covered u/s.92BA of the Act. The ....
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....f the nature contained in Section 6 or in special Acts may modify the position. Thus the operation of repeal or deletion as to the future and the past largely depends on the savings applicable. In a case where a particular provision in a statute is omitted and in its place another provision dealing with the same contingency is introduced without a saving clause in favour of pending proceedings then it can be reasonably inferred that the intention of the legislature is that the pending proceedings shall not continue but fresh proceedings for the same purpose may be initiated under the new provision." 15. The Hon'ble Karnataka High Court thereafter held that once Clause (i) of Section 92BA of the Act having been omitted by the Finance Act 2017 w.e.f. 01.04.2017 from the statute the resultant effect is that it had never been passed and to be considered as a law never been existed. We find in an old judgment of the Hon'ble Supreme Court in the case of Rayala Corporation (P). Ltd., 1970 AIR 494 (SC), the effect of a rule being omitted was analysed and it was held that once the Rule was omitted altogether, no new proceeding by way of prosecution could be initiated even though it might ....