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TaxTMI 
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TaxTMI 
2023 (4) TMI 1296
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....0/- under section 115JB of the Act. The case was selected for scrutiny and the statutory notices were duly served on the assessee. The Assessing Officer noticed that the assessee has entered into specified domestic transactions (SDT) with the Associated Enterprises (AE) exceeding Rs.15 crores and accordingly, made a reference to the Transfer Pricing Officer (TPO) to compute the arm's length price (ALP). The TPO passed an order under section 92CA whereby he proposed an adjustment of Rs.1,76,27,371/-. The Assessing Officer passed the draft assessment order incorporating the TP adjustment against which the assessee filed its objections before the DRP. The Ld.DRP reduced the TP adjustment to Rs.29,10,942/-. The assessee is in appeal before the Tribunal against the final order of assessment passed pursuant to the directions of the DRP. 4. Before the Tribunal, the assessee raised various grounds contesting the transfer pricing adjustments on merits. 5. During the course of hearing, the Bench noticed that the reference to TPO is made by the Assessing Officer with respect to the specified domestics transactions (SDT) and, therefore, raised a question as to why the order passed by the Ass....
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....pport, the judgment of Hon'ble Karnataka High Court has been relied upon in the case of PCIT vs. Textport Overseas Pvt. Ltd., reported in (2020) 114 taxmann.com 568 (Karnataka) and catena of ITAT Judgments cited supra, the relevant text of which have already been incorporated above. The Finance Act 2017 has omitted SDT whereby any expenditure in respect of which payment has been made or has to be made to a person referred to in clause (b) of sub-Section (ii) of Section 40. It has been omitted w.e.f. 01.04.2017. This precise issue had come up for consideration before the Hon'ble Karnataka High Court wherein the Hon'ble High Court have held that when clause (i) of Section 92BA have 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 and therefore order of TPO u/s. 92BA could be invalid and bad in law, While coming to this conclusion the Hon'ble High Court has referred and relied upon the judgment of Hon'ble Supreme Court in the case of Kolhapur Canesugar Works Ltd. & Anr. v. Union of India & Ors., (2000) 2 SCC 536. 8. Though, this judgment of PCIT vs. Textp....
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....volved, clause (a) of Section 6 of the General Clauses Act is applicable which provides that the effect of the repeal shall not revive anything not in force or existing at the time of repeal takes effect. Section 6A provides that where any Act or Regulation repeals any enactment by which the text of any Act or Regulation is amended by express omission and unless a different intention appears, the repeal shall not affect the continuance of any such amendment made by the enactment so repealed and in operation at the time of such repeal. There is absolutely no saving clause while omitting (i) of Section 92BA by the Finance Act, 2017. The Constitutional Bench of Hon'ble Supreme Court in the case of Kolhapur Canesugar Works Ltd. & Anr. v. Union of India & Ors., (2000) 2 SCC 536 has observed and held as under: "37. The position is well known that at common law, the normal effect of repealing a statute or deleting a provision is to obliterate it from the statute book as completely as if it had never been passed, and the statute must be considered as a law that never existed. To this rule, an exception is engrafted by the provisions of Section 6(1). If a provision of a statute is uncond....
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....ts land, building and plant and machinery situated at Thane and earned capital gain and claimed exemption under section 54G. Chapter XXII-B of the Income Tax Act, prior to 1.4.1988, contained section 280ZA which when read with the definition of "urban area" in section 280Y(d) and notification dated 22.9.1967 issued under section 280Y(d) by which Thane had been declared to be an urban area for the purpose of Chapter XXII- B, gave to a person who shifted from an urban area to another area, a tax credit certificate with reference to the tax payable by the company on income-tax chargeable under capital gains and would be given relief accordingly. The Appellant contended that section 54G was inserted on 1.4.1988 and at the same time section 280ZA was omitted and that therefore Section 24 of the General Clauses Act would be attracted to the notification dated 22.09.1967. That notification would inure to the benefit of the appellant for the purpose of claiming exemption under Section 54G. Section 280Y (d) which was omitted with effect from 1990, had been so omitted because it had been rendered redundant with the omission of section 280ZA. The revenue relied upon Rayala Corporation (P) Ltd....
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....could be validly continued on a complaint in respect of a charge made under Rule 132A of the Defence of India Rules, which ceased to be in existence before the accused were convicted in respect of the charge made under the said rule. It stated that once it is held by the constitution bench in Rayala that section 6 itself would not apply, it would be wholly superfluous to further state that on an interpretation of the word "repeal", an "omission" would not be included and therefore the second so- called ratio of the Constitution Bench in Rayala Corporation cannot be said to be a ratio decidendi at all and is really in the nature of obiter dicta. The Apex Court was of the opinion that the word "repeal" in both section 6 and section 24 would include repeals by express omission. An implied repeal is covered by the expression "repeal" and repeals may take any form and so long as a statute or part of it is obliterated, such obliteration would be covered by the expression "repeal" in section 6 of the General Clauses Act. The Apex Court also stated that there is no reference to Section 6A of the General Clauses Act in either of these Constitution Bench judgments (Rayala Corp (supra) and Ko....
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....stitution. Therefore, it is fallacious to state that section 6A would lead to the conclusion that "omissions" are included in "repeals" and for various reasons Fibre Boards requires a relook and ought to be referred to a larger Bench of three Judges. The appellant further contended that the true ratio decidendi of the Constitution Bench decision in Rayala Corporation is that an "omission" cannot amount to a "repeal". 12.3 The revenue supported the judgment in the Fibre Board's case. 12.4 The Apex Court held that when section 6 of the General Clauses Act speaks of the repeal of any enactment, it refers not merely to the enactment as a whole but also to any provision contained in any Act and if a part of a statute is deleted, section 6 would nonetheless apply. The Apex court referred to Fibre Board (supra) wherein it is stated that the expression "omission" is nothing but a particular form of words evincing an intention to abrogate an enactment or portion thereof. I was held that the expression "delete" and "omit" are used interchangeably, so that when the expression "repeal" refers to "delete" it would necessarily take within its kin an omission as well. It was further held th....