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2023 (3) TMI 654
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.... the Transfer Pricing Officer's (TPO) order for the respective assessment years are barred by limitation in terms of section 92CA(3A) of the I.T.Act. Since the above said additional grounds are purely legal and jurisdictional issue, which does not require examination of new facts, we admit the above additional grounds. The additional grounds, namely, grounds 25 and 30 for assessment years 2010-2011 and 2011-2012 are identical and they read as follows:- "25. The order of the learned TPO is bad and void being not as per time limit set out in section 92CA(3A) of the Act." 3. The brief facts in relation to the above grounds are as follows: For the assessment years 2010-2011 and 2011-2012, the assessee had entered into international transactions with its Associate Enterprises (AEs) and the matter was referred to the TPO for determination of Arm's Length Price (ALP) of the said transactions. The TPO passed orders u/s 92CA of the I.T.Act on 30.01.2014 and 30.01.2015 for assessment years 2010-2011 and 2011-2012, respectively. According to the learned AR, the TPO ought to have passed orders on or before 29.01.2014 and 29.01.2015 for assessment years 2010-2011 and 2011-2012, r....
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.....2014 and 29.01.2015. The chronology of events in assessee's case are detailed below:- Assessee's Case Assessment Year 2010-2011 Description Date Date on which intimation to pass assessment order expires 31.03.2014 "Prior to the date" i.e., date before 31.03.2014 30.03.2014 Sixtieth day (reckoned from 30.03.2014 backwards) Month Date March, 2014 30 February 2014 28 January 2014 (balance) 2 30.01.2014 Any time before sixty days (i.e., before 30.01.2014) By29.01.2014 Assessment Year 2011-2012 Description Date Date on which intimation to pass assessment order expires 31.03.2015 "Prior to the date" i.e., date before 31.03.2015 30.03.2015 Sixtieth day (reckoned from 30.03.2015 backwards) Month Date March, 2014 30 February 2014 28 January 2014 (balance) 2 30.01.2015 Any time before sixty days (i.e., before 30.01.2015) By 29.01.2015 7. Accordingly, the due date for the TPO to pass the transfer pricing orders for assessment years 2010-2011 and 2011-2012 should be at any time before 30.01.2014 and 30.01.2015, i.e., on or before....
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.... When someone refers to "midnight tonight" or "midnight last night" the reference of time is obvious. However, if a date/time is referred to as flat midnight on Friday, October 20th" the intention could be either midnight the beginning of the day or midnight at the end of the day. To avoid ambiguity, specification of an event as occurring on a particular day at 11:59 p.m. or 12:01 a.m. is a good idea, especially legal documents such as contracts and insurance policies. Another option would be to use 24-hour clock, using the designation of 0000 to refer to 'midnight at the beginning of a given day (or date) and 2400 to designate the end of a given day (or date). " 16. As per the International Standards Organization, ISO 8601- :2019 midnight may only be referred to as "00:00", corresponding to the beginning of a calendar day. The earlier use of reference to 24.00 hours to mark the end of the day, was dropped. 17. In India, the midnight or 00.00 hours has been always used to denote the beginning of the next date. A reference could be made to our Independence day, wherein the stroke of midnight at 00.00 hours on 15.08.1947 is considered as the moment of ....
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....that of the first expression since the two could not be used to create a conflict. The purpose of sub-section (7) is to divest the arbitrator of authority to make the award in 011 such arbitration proceedings which were pending before the arbitrator on the date of commencement of / the said Act and to provide for their automatic transfer to the Arbitration Tribunal. The General Clauses Act, 1897 provides that unless the contrary is expressed. (In Act shall be construed as coming into operation immediately on the expiration of the day preceding its commencement. There being no contrary indication in the Act, it must be held that the said Act come into force on the midnight on the expiration of the day preceding its commencement. i.e., the midnight between 25-3-1983 and 26-3-1983. There can be no doubt that if the second expression "in which 110 award has been made by the said date" was not also present in sub-section (7), then the undoubted result of the first expression would be that an arbitration proceeding in which no award had been made up to the midnight between 25-3-1983 and 26-3-1983 would be a pending arbitration proceeding which automatically stood transferred to the Arbit....
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....39; 26-3- 1983 in the present context? We have already indicated the meaning of the first expression "pending before any arbitrator on the date of commencement" to mean clearly and unambiguously pending up to the midnight between 25-3-1983 and 26-3-1983, i.e., before commencement of the date 26-3-1983 or at the time of expiry of the preceding day i.e. 25-3-1983. The other expression must, therefore. be construed in this context and since the word 'by' means 'before' also, in this context it must be held to mean 'before' and not 'on' the date of commencement of the Act. So construed, the second expression would read as "in which no award has been made before the said date" i.e. in. which no award has been made before the date of commencement of the Act, namely, 26-3-1983. This would be the harmonious construction of the two expressions in the provision. 10. Obviously, an award made on 26-3-1983 cannot be said to be an award made before 26-3-1983 and, therefore, the award in the present case having been made on 26-3-1983 and not before 26-3-1983, the date of commencement of the Act, the arbitrator had no jurisdiction to make the award as it wa....
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.... context otherwise requires, the General Clauses Act, 1897, shall, subject to any adaptations and modifications that may be made therein under Article 372, apply for the interpretation of this Constitution as it applies for the interpretation of an Act of the Legislature of the Dominion of India" 25. The above Article commences with the words, "unless the context otherwise requires". Therefore, the interpretation sought to be projected by the department cannot be accepted as the General Clauses Act cannot override any interpretation propounded by the parliament/Legislature in the clear, distinct and express language with an intention to convey a certainty as to how time is to be calculated. The ratio laid down by the Constitutional Bench of the Apex Court is squarely applicable to this case. 26. Further, the general interpretation by resorting to the meaning conveyed under the General Clauses Act cannot be adopted while interpreting 92CA (3A), because, the context and the language employed therein are completely different and it is pertinent to note that the words "from" and "to" have not been used. Even the employment of the General Clauses Act will not aid the R....
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....guage is clear the intention of the legislature is to be gathered from the language used. While doing so, what has been said in the statute as also what has not been said has to be noted. The construction which requires for its support addition or substitution of words or which results in rejection of words has to be avoided. As stated by the Privy Council in Crawford v. Spooner [(1846) 6 Moore PC I : -I MIA I79J "we cannot aid the legislature's defective phrasing of an Act, we cannot add or mend and, by construction make up deficiencies which are left there". In case of an ordinary word there should be no attempt to substitute or paraphrase of general application. Attention should be confined to what is necessary for deciding the particular case. This principle is too well settled and reference to a few decisions of this Court 'would suffice. (See : Gwalior Rayons Silk Mfg. (Wvg.) Co. Ltd. v. Custodian of Vested Forests [1990 Supp SCC 785 : AIR 1990 SC 1747J, Union ofIndia v. Deoki Nandan Aggarwal [1992 Supp (1) SCC 323 : 1992 SCC (L&S) 2-18 : (1992) 19 ATC 219: AIR 1992 SC 96J, Institute of Chartered Accountants of India v. Price Waterhouse[(1997) 6 SCC 312] and Harbhajan....
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....Section 153 expires. As per 92CA(4), the assessing officer has to pass an order in conformity with the order of the TPO. After receipt of the order from the TPO determining ALP, the assessing officer is to forward a draft assessment order to the assessee, who has an option either to file his acceptance of the variation of the assessment or file his objection to any such variation with the Dispute Resolution Panel and also the Assessing Officer. Sub-Section (5) of Section 144C of the Act provides that if any objections are raised by the assessee before the Dispute Resolution Panel, the Panel is empowered to issue such direction as it thinks fit for the guidance of the Assessing Officer after considering various details provided in Clauses (A) to (G) thereof. Sub- Section (l3) of Section 144C of the Act provides that upon receipt of directions issued under sub-section (5) of Section 144C of the Act, the Assessing Officer shall in conformity with the directions complete the assessment proceedings. It goes without saying that if no objections are filed by the Assessee either before the DRP or the assessing officer to the determination by the TPO, section 92CA(4) would come into operati....
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....ich comprehends the mischief and its remedy to which the enactment is directed. This formulation later received the approval of the Supreme Court and was called the "cardinal principle of construction." 38. In case of assessments involving transfer pricing, fixing of time limits at various stages sets forth that the object of the provisions is to facilitate faster assessment involving such determination. In the present case, as rightly held by the learned Judge in paragraphs 22 to 29 of the order dated 07.09.2020, the order of the TPO or the failure to pass an order before 60 days will have an impact in the order to be passed by the Assessing Officer, for which an outer time limit has been prescribed under Sections 144C and 153 and is hence mandatory. What is also not to be forgotten, considering the scheme of the Act, the inter-relatability and interdependency of the provisions to conclude the assessment, is the consequence or the effect that follows, if an order is not passed in time. When an order is passed in time, the procedures under 144C and 92CA(4) are to be followed. When the determination is not in time, it cannot be relied upon by the assessing officer while con....
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....nal taxation (TP adjustments) stands quashed. Therefore, grounds on merits on TP adjustments in both the appeals of the assessee are not adjudicated. 11. The surviving grounds, namely, grounds 22 to 22.3 relating to corporate tax issues for assessment year 2010- 2011, reads as follows:- "22. Disallowance of stock write-off on account of physical difference and errors in receipt of stock amounting to Rs.9,21,745. 22.1 That on the facts and in the circumstances of the case and in law, the learned AO has erred in disallowing the amount of Stock write-off on account of physical difference and errors in receipt of stock. 22.2 The learned AO ought to have allowed the amounts written off by the Appellant towards shortage in the inventory, arising due to cycle count, wrong receipting difference over shipping of certain items, which has been determined during the physical inventory verification. 22.3 The learned AO ought to have appreciated the fact that the expenditure was incurred wholly and exclusively in the normal course of business of the appellant." 12. The learned AR submitted that on identical issue, the Tribunal in assessee's own case, had....