TaxTMI 
TaxTMI 
2023 (6) TMI 1368
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.... 2021 is illegal, bad in law, null and void and liable to be quashed. The following grounds are without prejudice to Ground 1 above. 2. On the facts and circumstances of the case and in law, the Lat. Dispute Resolution Panel (DRP) erred in upholding the action of the Ld. Assessing Officer CAO)/ 1d TPO in confirming the addition of INR 65,03,77,598/- to the income of the Appellant by holding that its international transactions pertaining to its freight forwarding segment do not satisfy the arm's length principle envisaged under the Act. 3. In doing so, the Ld. AO erred in not reducing the TP adjustment from INR 65,03,77,598/- to INR 172.536.318 pursuant to order dated April 30, 2021 issued by the 1d TPO giving effect to the directions of the Ld. DRP dated March 15, 2021. 4. Further, in doing so, The Ld. DRP/Ld. TPO/LA. AO grossly erred in. 4.1 disregarding the arm's length price (ALP) and the scientific benchmarking process carried out by the Appellant in the Transfer Pricing (TP) documentation maintained by the Appellant in terms of section 92D of the Act read with Rule 10D of the Income-tax Rules, 1962 (Rules); 4.2 fail....
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....Post AG (DPAG), the ultimate payment company of DLPL. The DLPL and its associated enterprises (AE's) in the DHL network of companies may be characterised as freight handling companies with normal risk operating in the international logistics business. 3. During the course of assessment the assessing officer stated that in the case of the assessee of TP adjustment of Rs.10 crores or more was made in the earlier years and during this year the assesse had also entered into large international transactions with the associated enterprises. Therefore, the Transfer Pricing Officer i.e Assistant Commissioner of Income Tax (Transfer Pricing)-1 (2)(2), Mumbai vide order u/s 92CA(3) dated 01.11.2019 has made an upward adjustment to the arm's length price by Rs.65,03,77,598/- in relation to the international transactions entered into by the assessee company with its associated enterprise during the financial year 2015-16 relevant to assessment year 2016-17. In view of the order passed u/s 92CA(3) dated 01.11.2019 by the Transfer Pricing Officer an addition of Rs.65,03,77,598/- was proposed by the assessing officer in the draft assessment order on 07.12.2019. 4. The assesse has filed obje....
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....nt for AY 2016-17 was 31 December 2019. * Consequently, in terms of section 92CA(3A) of the Act, the 60 day prior to 31 December 2019 (i.e 60 day from 31 December 2019) falls on 1 November 2019. Accordingly, the due date for the TPO to pass the transfer pricing, order for AY 2016-17 should be at any time before 1 November 2019 i.e, on or before 31 October 2019. * In the present case, the TPO has passed the transfer pricing order on 1 November 2019 i.e, beyond the time limit prescribed under the Act. Hence, the same is barred by limitation in terms of section 92CA(3A) r.ws. 153 of the Act. * In view of the above, the Appellant wishes to raise an additional ground to contest that the transfer pricing order dated 1 November 2019 passed by the TPO for AY 2016-17 is barred by limitation as prescribed under section 92CA(3A) r.ws. 153 of the Act and accordingly, the transfer pricing order ought to be treated as illegal, bad in law, null and void and therefore be quashed. * Thus, based on the above submission the Appellant most humbly submits vide the additional grounds of appeal (corresponding Ground 1 of the Form 36), that the transfer pricing order, d....
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....erred u/s 92CA of the Act to the TPO the period of limitation shall be 3 years from the end of the assessment year in which the income was first assessable. He further submitted that in the case of the assessee in accordance with provisions of Sec. 153 of the Act the period of limitation for completion of the assessment as per provisions of Sec. 153 of the Act is 31.12.2019, therefore, the time limit for passing the order u/s 92CA(3A) of the Act is before 60 days prior to the date on which limitation for passing the assessment order is expired. As per the computation shown by the ld. Counsel the order u/s 92CA(3) of the Act ought to be passed on or before 31.10.2019. However, the TPO has passed the same order on 01.11.2019. Therefore, the ld. Counsel vehemently contended that impugned order passed u/s 92CA(3) is time barred by 1 day. The ld. Counsel has placed reliance on the following judicial pronouncements of Hon'ble Madras High Court i.e Pfizer Healthcare India Pvt. Ltd. Vs. JCOIT, 433 ITR 028 (Mad); DCIT Vs. Saint Gobain India P. Ltd. 137 taxmann.com 215 (Mad) and also placed reliance the decision of ITAT Mumbai in the cases i.e (i) Strides Shasum Limited Vs. DCIT, Circle 15(3....
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....ction (5) of section 139, whichever is later: Provided xxxxxxxxxxx Provided further xxxxxxxxxx Provided also that in case the assessment year in which the income was first assessable is the assessment year commencing on the 1st day of April, 2009 or any subsequent assessment year and during the course of the proceeding for the assessment of total income, a reference under sub-section(1) of section 92CA is made, the provisions of clause (a) shall, notwithstanding anything contained in the first proviso, have effect as if for the words "two years" the words "three years" had been substituted." As per provision of Sec. 92CA(3A) the TPO is required to pass an order u/s 92CA(3) of the Act at any time before 60 days prior to the date on which the period of limitation referred to in Sec. 153 for making the assessment order on assessment or reassessment or re-computation or fresh assessment as the case may be expires. The decision of single bench of Hon'ble High Court of Madras in the case of Pfizer Healthcare Ltd Vs. JCIT as supra is reproduced as under: "30. Now, coming to the question of how the 60 day period is to be computed, the critical questio....
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.... 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 isolation. Every provision and every word must be looked at generally and in the context in which it is used. It is said that every statute is an edict of the legislature. The elementary principle of interpreting any word while considering a statute is to gather the mens or sententia legis of the legislature. Where the words are clear and there is no obscurity, and there is no ambiguity and the intention of the legislature is clearly conveyed, there is no scope for the court to take upon itself the task of amending or alternating (sic altering) the statutory provisions. Wherever the language 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 1 : 4 MIA 179] "we cannot aid the legislature....
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....tention 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 time fixed is only directory, a guideline, not mandatory and is for the sake of internal proceedings. 32. Let us now examine the relevant procedures relating to Transfer Pricing. After an international transaction is noticed subject to satisfaction of section 92B, a reference is made to the TPO under sub-section (1) of section 92CA of the Act. The TPO after considering the documents submitted by the assessee is to pass an order under section 92CA (3) of the Act. As per section 92CA(3A), the order has to be passed before the expiry of 60 days prior to the date on which the period of limitation under 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 a....
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....y to mention the commentary of Justice G.P.Singh on the interpretation of statutes, Principles of Statutory Interpretation (1st Edn., Lexis Nexis 2015), which is quoted below for ready reference: ' The intention of the legislature thus assimilates two aspects: In one aspect it carries the concept of "meaning" i.e. what the words mean and in another aspect, it conveys the concept of "purpose and object" or the "reason and spirit" pervading through the statute. The process of construction, therefore, combines both literal and purposive approaches. In other words the legislative intention i.e. the true or legal meaning of an enactment is derived by considering the meaning of the words used in the enactment in the light of any discernible purpose or object which 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 pr....
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....on referred to in subsection(1) arises as a consequence of the order of the Transfer Pricing Officer passed under sub-section (3) of section 92CA; and (ii) (ii) any non-resident not being a company, or any foreign company." After referring the aforesaid provisions the ld. Counsel contended that since the order of the TPO was barred by limitation, therefore, there was no eligible assessee in the case of the assessee in terms of provisions of subsection (15) to Sec. 144C of the Act. 11. In this regard, we find that coordinate bench of the ITAT on the similar issue on identical facts in the cases i.e (i) Strides Shasum Limited Vs. DCIT, Circle 15(3)(2) vide ITA No. 2877/Mum/2014 dated 28.02.2023 (ii) M/s Mondelez India Foods Private Limited Vs. Ad. CIT, Range 5(1) vide ITA Nos. 1492, 1576 & 2340/Mum/2015 dated 14.11.2022 and (iii) M/s Tubacex Prakash India Pvt. Ltd. Vs. The ACIT/JCIT/DCIT/ACIT-national E-assessment Centre, Delhi and DCIT, circle 14(1)(2), dated 24.03.2023 held that the order of the TPO and draft assessment order are barred by limitation, therefore, resulting in assessee not being a eligible assessee u/s 144C(15)(b)(i) of the Act. Consequently, the final....