TMI Blog2021 (7) TMI 283X X X X Extracts X X X X X X X X Extracts X X X X ..... on 92BA is concerned, the reason being in the eyes of law after omission of clause (i) of Section 92BA of the Act, it would be treated as if it never existed in the statute book. Thus we hold that the exercise of jurisdiction u/s.263 of the Act by the Ld. Pr. .Commissioner of Income Tax was void and not legally valid - Decided in favour of assessee. - ITA No. 88/NAG/2020 - - - Dated:- 5-7-2021 - SHRI INTURI RAMA RAO , ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY , JUDICIAL MEMBER Assessee by : Shri Abhay N. Agarwal Revenue by : Shri Pradeep Hedaoo ORDER PER PARTHA SARATHI CHAUDHURY, JM: This appeal preferred by the assessee emanates from the order of the Ld. Pr. Commissioner of Income Tax-2, Nagpur dated 28.02.2020 passed u/s. 263 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) for the assessment year 2015-16 as per the following grounds of appeal on record. 1. Whether on the facts and circumstances, the learned CIT has erred in coming to the conclusion that assessment order passed by learned AO u/s 143(3) dated 18.12.2017 is erroneous and prejudicial to the interests of the revenue and in setting aside the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys. That on perusal of the reasons enshrined in these documents it is found that the delay was caused because of circumstances which cannot be attributed to any deliberate conduct of the assessee neither it can be said that the delay was caused by the assessee with mala-fide intentions. The Ld. DR also conceded to these facts and did not raise any objection for the condonation of delay. After hearing the parties, we therefore, condone the delay and proceed to hear this appeal on merits. We further take note of the present pandemic situation where the movement of people are restricted and because of such practical situation, it is always not possible to follow the time of limitation regarding filing of appeal before various Forums. This fact was also observed and taken cognizance of by the Hon ble Supreme Court of India, in Civil Original Jurisdiction, Suo Moto Writ Petition (Civil) No.3 of 2020 dated 8th March, 2021. 3. Coming to the merits in this case, assessment order dated 18.12.2017 was passed by the Assessing Officer u/s.143(3) of the Act. That from the records, it is an undisputed fact that the scrutiny assessment did not pertain to a limited scrutiny. In fact, the case w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pr. Commissioner of Income Tax observed that this argument of the assessee does not hold good since the Ld. Counsel himself has submitted that the limit of 20 crores was increased from 5 crores by Finance Act, 2015 w.e.f. 01.04.2016 i.e. applicable from assessment year 2016-17 whereas assessee s case pertains to assessment year 2015-16. Therefore, the limit of 5 crores in case of specified domestic transaction was applicable in the case of the assessee. Therefore, the Assessing Officer was also supposed to refer the matter to the Transfer Pricing Officer having regard to the fact that a specialized cell was created by the Revenue Department to deal with the complicated and complex issues arising out of the transfer pricing mechanism. 4.1 The Ld. Pr. Commissioner of Income Tax in his order held the assessment was completed by the Assessing Officer without conducting proper enquiry and verification, without assigning any reasons for his satisfaction on the issues relating to Section 40A(2)(b) of the Act and further the case was also not referred to the TPO thus making the assessment order erroneous so as to be prejudicial to the interest of the revenue. 4.2 The Ld. Pr. Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... implied that the Assessing Officer has recorded his satisfaction since he has called for all the details at the time of scrutiny assessment proceedings. 5.1 The Ld. Counsel for the assessee also submitted that even though the provisions of section 92BA of the Act was not followed by the Assessing Officer that does not makes the order erroneous since he had examined the transactions and payments made to the related persons u/s.40A(2)(b) of the Act. Once he was satisfied regarding genuineness, there was no requirement for the Assessing Officer to refer the matter further to Transfer Pricing Officer. It was further submitted by the Ld. Counsel that the said provision of Section 92BA(i) of the Act got omitted vide Finance Act 2017 w.e.f.01.04.2017 and therefore, the provision was omitted before the assessment order dated 18.12.2017 was passed and also before the revisionary jurisdiction order dated 28.02.2020 passed u/s.263 of the Act by the Ld. Pr. Commissioner of Income Tax. 6. The very basis of the order passed u/s.263 of the Act by the Ld. Pr. Commissioner of Income Tax stating that the order of Assessing Officer to be erroneous so as to be prejudicial to the interest of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment order dated 18.12.2017 passed u/s.143(3) of the Act for the assessment year 2015-16 was in respect of complete scrutiny. Firstly, during the relevant assessment year 2015-16 Section 92BA of the Act was very much in existence which got omitted only vide Finance Act, 2017 w.e.f. 01.04.2017. Therefore, it was incumbent on the part of the Assessing Officer to follow the said provision and should have referred the matter to the Transfer Pricing Officer who would subsequently taken a call. This was not done by the Assessing Officer which itself makes the assessment order erroneous so as to be prejudicial to the interest of the Revenue. 10.1 Further, with regard to the payments made to the related persons u/s.40A(2)(b) of the Act, the Ld. DR bringing to our notice the assessment order submitted that the Assessing Officer in his order has not recorded any specific findings regarding his satisfaction being arrived at in respect of the documents/evidences submitted by the assessee pertaining to Section 40A (2)(b) of the Act. The Assessing Officer has simply accepted the submissions of the assessee without recording his satisfaction which again makes the assessment order erroneous so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 01.04.2017 i.e. financial year 2017-18 relevant to assessment year 2018-19. That however, the case of the assesse pertains to the assessment years 2013-14 and 2014-15 and the Tribunal was not correct in holding that the repealment of the said provision would even be applied retrospectively for the assessment years 2013-14 and 2014-15 in respect of the assesse. 14. The Hon ble High Court of Karnataka while adjudicating this issue had referred to the authoritative pronouncement of the Hon ble Apex Court in the case of Kolhapur Canesugar Works Ltd. Vs. Union of India, AIR 2000 SC 811 wherein the Hon ble Apex Court had examined the effect of repealment of a statute vis- -vis deletion/addition of provision in an enactment and its effect thereof. The import of Section 6 of General Clauses Act had also been examined and it was held as follows: 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Income Tax passed order u/s.263 dated 28.02.2020. Since Section 92BA(i) of the Act was unconditionally omitted without a saving clause in favour of pending proceedings, therefore, the Ld. Pr. Commissioner of Income Tax ought not to have proceeded u/s.263 of the Act. Since such omission in Section 92BA(i) of the Act is unconditional i.e. it does not say that pending proceedings under clause (i) of Section 92BA would continue in future even after its omission on 01.04.2017. Therefore, the Ld. Pr. Commissioner of Income Tax erred in exercising jurisdiction u/s.263 of the Act, in so far as clause (i) of Section 92BA is concerned, the reason being in the eyes of law after omission of clause (i) of Section 92BA of the Act, it would be treated as if it never existed in the statute book. Similar views have been taken by the Co-ordinate Benches of the Tribunal in the following decisions : i) Swastik Coal India Pvt. Ltd. Vs. Pr. CIT, ITA No.486/Ind/2018 for the assessment year 2014-15 ii) M/s. Raipur Steel Casting India Pvt. Ltd. Vs. Pr.CIT, ITA No.895/Kol/2019 for the assessment year 2014-15 iii) M/s. Bhartia- SMSIL (JV) Vs. ITO, ITA No.117/Gau/2019 for the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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