TaxTMI 
TaxTMI 
2023 (12) TMI 703
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....chase of CBU's, spare parts and accessories from Jaguar Land Rover Limited, UK; and Lastly, assessee has also challenged disallowance u/s.40a(ia) of Rs. 1,89,33,194/-. Besides this also assessee has also raised a legal ground that the TPO order has been passed beyond the period of limitation stipulated u/s.92CA(3A) of the Act and therefore, the whole transfer pricing adjustment is bad in law and also the Corporate tax addition deserves to be quashed because final assessment order is barred by limitation. 3. The brief facts are that assessee, i.e., Jaguar Land Rover India Limited is 100% subsidiary of Jaguar Land Rover Limited, UK which is manufacturer of sports and luxury vehicles and in India JLR UK sells products to subsidiary companies like assessee which are responsible for the import, marketing, sale and distribution of the products to independent Jaguar and Land Rover retailers. During the relevant financial year JLR India Ltd., had entered into various international transactions relating to purchase of vehicle, spare parts and accessories from JLR UK; purchase of vehicles from M/s. Tata Motors Limited besides of the transactions. Assessee filed its return of income ....
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....essment order should have been passed on or before 31/12/2019 whereas here in this case final assessment order has been passed on 23/04/2021. Therefore, not only the whole transfer pricing adjustment but also disallowance u/s. 40(a)(ia) made on corporate tax deserves to be quashed as the final assessment order itself is barred by limitation. In support following computation of period of limitation has been provided before us. Sr. No. Events Relevant Dates 1. Assessment Year ("AY") 2016-17 2. End of AY 31.03.2017 3. Due date for completion of assessment under section 153(1) read with section 153(4) of the Act (i.e. 21+12-33 months from the end of AY) 31.12.2019 4. Time limit for passing the order under section 92CA(3A) of the Act 60 days 5. Less: Date on which limitation expires under section 153 of the Act Le. 31.12.2019 1 day 6. Less: Remaining days of December 2019 30 days 7. Less: Number of days of November 2019 30 days 8. Last date of passing order under section 92CA(3) of the Act 31.10.2019 9. Date on which transfer pricing order ("TP order) under section 92CA(3) of the Act is passed. 1.1....
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....ires that implies that the date on that particular time ceases to exist, that is not alive and it has expired. The last day expires on 00.00 am. It is only after the expiry of this date that an order may not be passed. Therefore, while computing the 60 days period, the last day of March has to be counted for computing the time limitation. If the same is counted, then working reverse the period of limitation for passing of a TP Order expires on 30-01-2015 and since the order is passed on this date, therefore the order is not barred by time limitation. vii. Sec. 92CA(3A) uses the word may only and the same cannot be construed as shall and equated to limitation especially when further proceedings are contemplated under the Act such as passing draft assessment order, remedy before Dispute resolution panel and final assessment order. viii. There is no necessity or occasion to read the word "may" as "shall" Sub-sections 3A and 4 were introduced in sec. 92CA by the very same Finance Act, 2007 and the Legislature has consciously used the word "may" in Sec 92CA(3A) while using the word "shall" in sec. 92CA(4). Hence, in view of the context and background of the provisions,....
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....le High Court in Saint Gobain India Pvt. Ltd. (supra) reads as under:- 28. The word "date" in section 92CA(3A) would indicate 31-12- 2019. But the preceding words "prior to" would indicate that for the purpose of calculating the 60 days, 31-12-2019 must be excluded. The usage of the word "prior" is not without significance. It is not open to this court to just consider the word "to" by ignoring "prior". The word "prior" in the present context, not only denotes the flow of direction, but also actual date from which the period of 60 days is to be calculated. It is settled law that while interpreting a statute, it is not for the courts to treat any word(s) as redundant or superfluous and ignore the same. In this connection, it is pertinent to note the judgment of the Apex Court in Grasim Industries Ltd. v. Collector of Customs 2002 taxmann.com 1803, wherein, it was held as follows : "10. No words or expressions used in any statute can be said to be redundant or superfluous. In matters of interpretation one should not concentrate too much on one word and pay too little attention to other words. No provision in the statute and no word in any section can be construed in....
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....dge. 30. Even considering for the purpose of alternate interpretation, the scope of section 9 of the General Clauses Act, it is to be noted that an inverted calculation of the period of limitation takes place here. If the last date is taken to be the first date from which the period of 60 days is to be calculated, reading down the provision with the use of the word "from", which denotes the starting point or period of direction in general parlance, would mean that 60 days "from the last date". Even going by section 9 of the General Clauses Act, when the word "from" is used, then, that date is to be excluded, implying here that 31-12-2019 must be excluded. After excluding 31-12-2019, if the period of 60 days is calculated, the 60th day would fall on 1-11-2019 and the TPO must have passed the order on or before 31-10-2019 as orders are to be passed before the 60^th day. Therefore, either way the contention of the Revenue is a fallacy and has no legs to stand. Mandatory or Directory 31. The next contention that has been raised by the learned senior standing counsel for the appellants is that the usage of the word "may" in section 92CA (3A) indicates that the....
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....ed above, also automatically extends the period of assessment to 60 days as per the second proviso to section 153. 35...................................................................................... 36...................................................................................... 37...................................................................................... 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 7-9- 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 inter-dependency of the provisions to conclude the assessment, is the consequence or the effect that follows, if an order is not....
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....g it to be as "eligible assessee". Section 144C was brought on the statute as special scheme of assessment and to provide alternative dispute resolution scheme to certain categories of "eligible assessee". Section 144C provides that the AO has to pass and forward a draft assessment order in the case of "eligible assessee" if he proposes to make any variation which is prejudicial to the interest of such assessee, Sub-section 15 has defined "eligible assessee" for the purpose of section 144C. The relevant provisions of section 144C(1) and sub section 15 reads as under:- 144C. (1) The Assessing Officer shall, notwithstanding anything to the contrary contained in this Act, in the first instance, forward a draft of the proposed order of assessment (hereafter in this section referred to as the draft order) to the eligible assessee if he proposes to make, on or after the 1^st day of October, 2009, any variation which is prejudicial to the interest of such assessee. . . . (15) For the purposes of this section,- (a) "Dispute Resolution Panel" means... (b) "eligible assessee" means,- (i) any person in whose case the vari....
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.... once the said transfer pricing order is held to be time-barred, non-est and void-ab-inito from the very date of its existence and inception. The entire premise to adopt the special procedure under section 144C of the Act and treat the appellant an "eligible assessee" rests on the fact that the order passed under section 92CA(3) of the Act has resulted in transfer pricing variations prejudicial to the interest of the appellant. However, once the transfer pricing order under section 92CA(3) of the Act, per-se, becomes a nullity, there remains no transfer pricing variation arising/ resulting or remaining as a consequence thereto. The effect of passing a null and void transfer pricing order here is that it has to be 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. Thus, in absence of any transfer pricing order being passed at all and any variations arising there from, the entailing consequence in instant case is that the appellant cannot be said to be an "eligible assessee" under section 144C(15)(b)(ii) of the Act. 35. Accordingly, once the assessee becomes an "ineligible a....
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.... entire assessment proceedings have been held to be invalid and liable to be quashed: (i) Vijay Television (P.) Ltd. v. DRP [2014] 46 taxmann.com 100/225 Taxman 35/369 ITR 113 (Madras) affirmed by the Division Bench of the Hon"ble Madras HC in [2018] 95 taxmann.com 101 (Madras); (ii) International Air Transport Association v. Dy. CIT [2016] 68 taxmann.com 246 (Bombay); (iii) Zuari Cements Ltd. v. ACIT [Writ Petition No. 5557 of 2012, dated 21-2-2013] (Andhra Pradesh)- Revenue"s SLP dismissed by the Hon"ble Apex Court in CC No. 16694/2013 on 27^th September 2013 38. What culminates from the aforesaid two sets of parallel decisions is that the provisions of section 144C of the Act are specific and provides for a special code which must be strictly followed since it impacts the rights of an assessee substantively, i.e., the ability to accept or object a draft order proposition, file objections before the Dispute Resolution Panel and ensure a speedy disposal thereof. Any lapse in treating an assessee as "eligible assessee" where it is otherwise not one and vice-versa results in fatality, since it becomes a jurisdictional defect and goes on to the roo....
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....ssessee". The action of the Ld. AO in passing the impugned draft assessment order in instant case results in non-compliance of section 144C of the Act which vitiates the entire assessment exercise. 41. The issue being fairly settled and the intent of legislature in strictly interpreting the provision of section 144C of the Act being repeatedly held so, the act of the Ld. AO in proceeding to pass a draft assessment order on the basis of an order by the Ld. TPO which is barred by limitation and thus bad in law/ non-est, results in an incurable illegality which is liable to be held as null and void, and thus, consequentially holding the final assessment order to be bad in law as well. 42. Thus, despite the fact that the reference made to the Ld. TPO is valid, in absence of a legally valid transfer pricing order and a valid draft assessment order, the Ld. AO cannot assume jurisdiction to proceed with the assessment under Section 144C of the Act and pass the consequential final assessment order. The decisions of the Hon"ble jurisdictional High Court in case of International Air Transport Association (supra) and Dimension Data Asia Pacific PTE Ltd. (supra) forties appel....