TMI Blog2019 (5) TMI 1709X X X X Extracts X X X X X X X X Extracts X X X X ..... when this clause (i) is omitted from the statute it has to be taken as though there is no clause (i) since its inception. And when looked from that angle, the AO should have framed the assessment as in normal course after making necessary enquiries of particular claim of expenditure in accordance with law. But this exercise could not happen on account of provisions of section 92BA clause (i) of the Act. Therefore, since this clause (i) has been omitted from the statute by virtue of the aforesaid amendments, the AO is required to adjudicate the issue of claim of expenditures in accordance with law after affording opportunity of being heard to the assessee. We therefore set aside the orders of the AO and the DRP and restore the matter back to the AO with the direction to readjudicate the issue of claim of expenditure incurred in respect of which payment has been made or is to be made to person referred to in clause (b) of sub section 2 of section 40A of the Act. Accordingly, since we have restored the matter to the AO, we find no justification to deal with the other issues on merit. Accordingly, appeal of the assessee stand allowed for statistical purposes. Therefore, all the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itation under section 144C(4) is without jurisdiction, illegal, bad in law and therefore be annulled. 4. That on the facts and circumstances of the case and in law, Ld. TPO/the Ld. AO/ and the Hon'ble DRP have erred on facts and in law in enhancing the income of the appellant by ₹ 13,52,49,494/-. 4. The Ld. Counsel first of all brought to our notice that the aforesaid legal issue that has been raised is no longer res integra and has been adjudicated by Coordinate Bench of this Tribunal Bangalore Bench in the case of IT(TP)A No. 1722/Bang/2017 in Texport Overseas Private Limited Vs. DCIT for AY 2013-14 vide order dated 22.12.2017 and submitted that the matter may be remanded back to the AO with the direction given in the said order. We note that the legal issue raised by the assessee goes to the root of the matter and we note that the AO has made a reference u/s. 92 Ld. CIT(A) having observed that the assessee has entered into specified domestic transactions since this case was covered u/s. 92BA of the Act but later on there was an amendment in Sec. 92BA by Finance Act, 2019 w.e.f. 01.04.2017 whereby clause (ii) of sec. 92BA relating to any expendit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the original grounds of appeal. Therefore, it cannot be admitted. 3. The learned counsel for the assessee has further contended that AO has made a reference under section 92CA, having observed that the assessee has entered into specified domestic transaction as this case is covered under section 928A of the IT Act but later on there was amendment in section 92BA by the Finance Act, 2017 w.e.f. 01.04.2017 whereby clause (ii) of section 92BA relating to any expenditure in respect of which payment has been made or is to be made to a person referred to clause (b) of sub section 2 of section 40A was omitted and on account of its omission, the impugned transaction would not fall within the definition of specified domestic transaction. Therefore, it has become necessary for the assessee to raise this additional ground before the Tribunal. 4. The learned counsel for the assessee has further invited bur attention that provision of section 928A was brought on statute by the Finance Act, 2012 w.e.f. 01.04.2013 relevant to assessment year 2013-14. Therefore, it is the first year when the transactions are to be examined in the light of provision of section 928A of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of the Tribunal in lT(TP)A No. l 722/Bang/2017 Page 4 of7 the case of CIT Vs. GE Thermometrics India Pvt. Ltd., in ITA No. 876/2008 in which while dealing the omission subsection (9) of Section 1 OB the Hon'ble High Court has held that once the section is omitted from the statute book, the result is it had never been passed and be considered as a law that never exists and therefore, when the assessment orders were passed, the AO was not justified in taking note of a provision which was not in the statute book and denying benefit to the assessee. Therefore, in the light of these judicial pronouncements, sub-section (i) of section 928A shall be deemed to be not on the statute since beginning. 6. The learned DR on the other-hand has contended that even if it is held that the clause (i) of section 928A relating to expenditures in respect of which payment has been made or is to be made to person referred to in clause (b) of sub section 2 of section 40A of the Act is not on the statute since beginning in view of the amendment and in the light of various judicial pronouncements the reference made by AO to TPO is bad in law, the AO is required to examine the clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the absence of any such provisions in the statute or in the rule, the pending proceeding will lapse under rule under which the notice was issued or proceeding being omitted or deleted . 8. In the case of General Finance Co., Vs. ACIT, their Lordship Of the Apex Court has again examined the issue and held that the principle underlying section 6 as saving the right to initiate proceedings for liabilities incurred during the currency of the Act will not apply to omission of a provision in an Act but only to repeal, omission being different from repeal as held in different cases. Following the aforesaid judgments, the jurisdictional High Court has also expressed the same view in the case of CIT Vs. GE Thermometrics India Pvt. Ltd. The relevant observation of the jurisdictional High Court is extracted hereunder: 8. Admittedly, in the instant case, there is no saving clause or provision introduced by way of an amendment while omitting sub-section (9) of Section 10B. Therefore, once the aforesaid section is omitted from the statute book, the result is it had never been passed and be considered as a law that never exists and therefore, when the assessment orders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law after affording opportunity of being heard to the assessee. We therefore set aside the orders of the AO and the DRP and restore the matter to the AO with the direction to readjudicate the issue of claim of expenditure incurred in respect of which payment has been made or is to be made to person referred to in clause (b) of sub section 2 of section 40A of the Act. Accordingly, since we have restored the matter to the AO, we find no justification to deal with the other issues on merit. Accordingly, appeal of the assessee stand allowed for statistical purposes. 5. Respectfully following the aforesaid order of the Tribunal, we note that in the instant case, by the Finance Act, 2017, clause (i) of section 92BA has been omitted w.e.f. 01.04.2017. The legal effect of a provision being omitted by subsequent amendment, then it would be deemed that clause (i) was never been on the statute book. While omitting the clause (i) of section 92BA, we note that nothing was specified whether the proceeding initiated or action taken on this continue. Therefore, the proceeding initiated or action taken under that clause would not survive at all. In the light of this legal position, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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