TaxTMI 
TaxTMI 
2023 (4) TMI 1154
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....) as offered by the Appellant in its return of income; 2. erred in making additions to the total taxable income without issuing a show cause notice (i.e. draft order of proposed additions) as per the provision of Section 144B(1)(xvi)(b) of the Act and thereby vitiating the process of law. Hence, the draft order (and consequent orders) are invalid and had in law. 3. erred in issuing two assessment orders (in the name of non-existing entity Le Panalpina India) under Section 143(3) of the Act for the same AY on the same day on conclusion of single assessment proceedings. 4. erred in issuing the transfer pricing order (dated 31 January 2021), the draft assessment order (dated 30 April 2021), the directions of the Hon'ble DRP (dated 28 January 2022), the subsequent first final assessment order (dated 30 April 20211, and the second final assessment order (dated 26 February 2022) in the name of non-existing entity is Panalpina India disregarding the fact that the merger had been already been intonated to the learned AO/Hon'ble DRP/ learned TPO, Thereby, the entire proceedings is invalid and bad in law. 5. erred in appreciating the fact that the ....
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....e company is functionally different and owns significant assets as compared to the Appellant which is a Non-vehicle owning common carrier (NVOCCE'); Introduction of additional comparables by the learned TPO 12. erred in considering Anil Mantra Logistix Pvt Ltd. Prudential Global Logistics (India) Pvt Ltd. Continental Carriers Pvt Ltd and CTA Logistics Ltd as comparables for benchmarking the international transaction of provision of freight forwarding services, disregarding the Fact that it is functionally different from the Appellant. Margin computation of tested party 13. erred in considering liabilities no longer required written back, gain on foreign exchange fluctuation", "provision for bad debts written back and miscellaneous income as non- operating in nature for the purpose of computing the operating margin of the Appellant, without appreciating that the same are operating in nature and related to the day to day business operations of the Appellant; 14 without prejudice to the above ground, the learned AO/TPO erred in not applying a consistent approach for treatment of 'liabilities no longer required written back', 'foreign exchan....
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.... 20. erred in initiating penalty proceedings under Section 270A of the Act; 21. erred in initiating penalty proceedings under Section 271AA of the Act." 2. Briefly stated facts necessary for consideration and adjudication of the issues at hand are : Panalpina India, the taxpayer now merged with DSV Air and Sea Private Ltd. (is an Indian Pvt. Ltd. Company) incorporated on 22.12.1986 under the Companies Act, 1986. The taxpayer is an asset freight company primarily engaged in the business of freight forwarding and logistic services specialising in international air and sea freight consignments and associated supply chain management services. During the year under consideration the taxpayer entered into international transactions with its Associate Enterprise (AE) as under: Sl. No. Nature of Transactions Method Applied Value (INR) 1. Trademark fees CUP 9,02,65,149 2. Freight Forwarding expenses 3,21,08,08,063 3. Freight Forwarding income 2,53,19,87,051 4. Internal Communication 23,10,293 5. IT Expenses 65,131 6. Personnel Income 1,24,90,009 7. Assignment Service fee 13,27,959 ....
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....of Jute Corporation of India Ltd. vs. CIT 187 ITR 688 and National Thermal Power Corporation Ltd. 229 ITR 383. 7. However, on the other hand, ld. DR for the Revenue opposed the application for additional ground on the grounds inter alia that application is not maintainable having been filed after undue delay; that no such plea has been taken by the taxpayer before the lower Revenue authorities; and that no prejudice has been caused to the taxpayer as he has been duly represented before the ld. Revenue authorities in passing the TP order/assessment order. 8. Keeping in view the settled principle of law that jurisdictional issue is a legal issue which can be taken by the aggrieved party at any stage of the proceedings before the judicial/quasi judicial bodies, particularly when assessee has come up with the pleading that TP order and consequent assessment order has been passed beyond the period of limitation. So, application raising additional ground by the taxpayer is allowed without prejudice to the merits of this case. 9. Since taxpayer has raised jurisdictional issue which goes to the roots of the case, we would decide the additional ground nos.18 & 19 first before going....
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....the period of 60 days, the last date as per section 153 should be excluded. Operative part of the judgment is extracted for ready perusal as under :- "30. Now, coming to the question of how the 60 day period is to be computed, the critical question would be whether the period of 60 days would be computed including the 31st of December or excluding it. Section 153 states that no order of assessment shall be made at any time after the expiry of 21 months from the end of the assessment year in which the income was first assessable. The submission of the revenue is to the effect that limitation expires only on 12 a m of 01.01.2020. However, this would mean that an order of assessment can be passed at 12 a m on 01.01.2020, whereas, in my view, such an order would be held to be barred by limitation as proceedings for assessment should be completed before 11.59.59 of 31.12.2019. The period of 21 months therefore, expires on 31.12.2019 that must stand excluded since Section 92CA(3A) states 'before 60 days prior to the date on which the period of limitation referred to Section 153 expires'. Excluding 31.12.2019, the period of 60 days would expire on 01.11.2019 and the transfer pric....
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....e hold that the final assessment order passed by the AO is within the time prescribed u/s 144C(13). Further since the draft order has also been passed within a reasonable time, the same is also not barred by limitation. The contention of the ld. AR that the draft order passed in this case was barred by limitation, is therefore, found to be without any substance and hence repelled. B. Time limit for passing of order by the TPO 6.1. The ld. AR also challenged the passing of the order by the TPO. It was submitted that the TPO passed order on 31.5.2014, which was time barred and, hence, the same should be annulled leading to the quashing of the final assessment order. In the opposition, the ld. DR supported the Revenue's stand. 6.2. We have heard the rival submissions and perused the relevant material on record. It has been noticed above that the provisions of section 92CA requiring the passing of the order by the TPO determining the ALP of the international transactions, came into being by the Finance Act, 2002. As per sub-section (3) of section 92C, the TPO is required to pass the order determining the ALP of the international transactions. No time limi....
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....d is used. 6.6. Section 127 deals with the power to transfer cases. Subsection (1) of this provision provides that : `The Director General or Chief Commissioner or Commissioner may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him'. Dispute arose in Sahara Hospitality Ltd. vs. CIT (2013) 352 ITR 38 (Bom) as to whether or not giving the assessee a reasonable opportunity of being heard before the transfer of case by the Chief Commissioner, in the backdrop of the use of the word `may' in the provision, be considered as mandatory. The Hon'ble Bombay High Court has held that the word `may' in section 127 should be read as `shall' and hence the granting opportunity to the assessee is mandatory. 6.7. Section 16 of the Wealth-tax Act, 1957 deals with the assessment of wealth. Section 16A having ma....
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....deciding as to whether the given requirement is directory or mandatory in character, but the use of expression "may" or "shall" is never considered decisive in that regard'. It was thus held that the moment the estimated value exceeded the returned value of the asset by more than what is envisaged by r. 3B, then the WTO had no option, but to make a reference and he is not to wait for a request from the assessee to make a reference. Similar view has been expressed by the Hon'ble Delhi High Court in Sharbati Devi Jhalani vs. CWT & Ors. (1986) 159 ITR 549 (Del). It is vivid from the above discussion that the use of word `may' or `shall' in a provision is not conclusive of its mandatory or directory nature. One needs to go through the text of the provision and the context in which such a word has been used. 6.8. Reverting to section 92CA, we find that the Finance Act, 2007 inserted sub-section (3A) carrying the time limit of sixty days for passing of the order by the TPO before the expiry of time limit for completion of assessment by the AO u/s 153. Despite the use of the word `may', the time limit for passing the order by the TPO is mandatory, as in the ot....
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....he order was actually passed by the TPO on 31st May, 2014. Thus, the order passed by the TPO is patently time barred. C. Consequences of valid draft order and TPO's time barred order 7. The ld. AR argued that since the draft order as well as the order of the TPO were time barred, the final assessment order passed by the AO was liable to be set aside. We have held above that the draft order was passed within time and only the order of the TPO is time-barred. When an order is passed without jurisdiction or beyond the permissible time, it is considered as null and void. The effect of passing a null and void order is that it is considered as non est, meaning thereby, that it entails all the consequences of not having been passed at all and is ignored for all practical purposes. The Hon'ble Madras High Court in Vijay Television (P.) Ltd. vs. DRP (2014) 369 ITR 113 (Mad) considered a case in which the assessment order was directly passed without routing through draft order or DRP. The Hon'ble Court held it to be a non- curable defect and resultantly the assessment was quashed. It was held that when there is an omission on the part of the AO to follow the man....