TMI Blog2022 (11) TMI 1339X X X X Extracts X X X X X X X X Extracts X X X X ..... eligible assessee - Eligible assessee mean any person in whose case variation arises as a consequence of the order of the TPO passed u/s. 92CA(3) of the Act. The order has to be a valid order. In the instant case since, the order of TPO was beyond the period of limitation it is not a valid order. Therefore, there is no eligible assessee in terms of the definition provided in sub-section (15) to section 144C of the Act . If there is no eligible assessee, no reference to DRP could have been made. Once the substratum for making the assessment under transfer pricing mechanism erodes the subsequent proceedings emanating from flawed foundation is without jurisdiction. We find merit in the additional grounds of appeal - The assessee succeeds on the aforesaid legal grounds. - ITA NO.1492/MUM/2015, ITA NO.1576/MUM/2015, ITA NO.2340/MUM/2015 - - - Dated:- 14-11-2022 - SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN , ACCOUNTANT MEMBER For the Appellant : Shri J.D. Mistry, Sr. Advocate with, Shri Hiten Chande, Shri Ajit Kumar Jain , Shri Siddhesh Chougule For the Respondent : Ms. Vatsala Jha ,CIT-DR ORDER PER VIKAS AWASTHY, J.M: The appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act was required to be passed by 31 March 2014. A perusal of the grounds and the application for admission of said additional grounds clearly indicates that these are legal grounds assailing the validity of the assessment order and the order of TPO. The Hon'ble Supreme Court of India in the case of National Thermal Power Company vs. CIT, 229 ITR 383 has held that the Tribunal has jurisdiction to examine a question of law which arises from the facts on record and have a bearing on the tax liability of the assessee. In the instant case, the additional grounds of appeal raised by the assessee challenges the validity of assessment order and the order of TPO on the ground of limitation. No further documentary evidence is required to be adduced for adjudicating these grounds. The said additional grounds of appeal are admitted and are taken up for adjudication. 7. The ld.Counsel for the assessee submits that at this stage he will be confining his submissions only with respect to the additional grounds of appeal No.48 49, without prejudice to the original grounds / other additional grounds of appeal. If ground No.48 49 are allowed, the original grounds/ other additional g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmits that the Single Judge of the Hon'ble Madras High Court in the case of bunch of appeals, lead case being Pfizer Healthcare India (P) Ltd. (supra) had decided exactly the similar issue. The Hon'ble Madras High Court observed that limitation has been prescribed for each stage/process in an assessment right from filing of return of income, reference to the TPO, passing of the order by TPO, filing of objections before DRP and thereafter passing of final assessment order. The Hon ble High Court in para- 30 of the judgment has explained as to how the period of sixty days as mentioned in section 92CA(3A) is to be calculated . The Hon ble High Court has further held that any order passed by the TPO beyond a period of limitation as prescribed under the provisions of section 92CA(3A) read with proviso to section 153 of the Act, lacks jurisdiction. 7.4 The order of the Single Judge was challenged by the Department in writ appeal before the Division Bench of Hon'ble Madras High Court. The Division Bench in the case titled DCIT vs. Saint Gobain India (P) Ltd.,(supra) confirmed the findings of Single Judge Bench. Thereafter, Bangalore Bench of the Tribunal in the case of Unis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibed to frame transfer pricing audit is 31/01/2015 and 31/01/2016, respectively, and the limitation for order u/s.143(3) r.w.s. 153 of the Act is 31/03/2015 and 31/03/2016, respectively. The same principle would apply to A.Y. 2010-11. The ld. Departmental Representative submits that in line with the Boards Central Action Plan the TPO has passed the order within the period of limitation. The ld. Departmental Representative placed reliance on the decision of Delhi Bench of Tribunal in the case of M/s. Louis Dreyfus Commodities India Ltd. vs. DCIT in ITA No.2381/Del/2014 for Assessment Year 2009-10 decided on 11/03/2021. 9. Shri Mistry, Sr. Advocate rebutting the submissions made on behalf of the Revenue asserted that Hon'ble Madras High Court in the case of Pfizer Healthcare India (P) Ltd. vs. JCIT (supra) has considered Central Action Plan issued by CBDT. The ld. Counsel for the assessee further asserts that in the case of Louis Dreyfus Commodities India Ltd.(supra) the Bench has not considered the provisions of section 144C of the Act, hence, the aforesaid decision is distinguishable. 10. We have heard the submissions made by rival sides on the limited issue of validity o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduced herein below: Section 92CA (3A) (3A) Where a reference was made under sub-section (1) before the 1st day of June, 2007 but the order under sub-section (3) has not been made by the Transfer Pricing Officer before the said date, or a reference under sub-section (1) is made on or after the 1st day of June, 2007, an order under sub-section (3) may be made at any time before sixty days prior to the date on which the period of limitation referred to in section 153, or as the case may be, in section 153B for making the order of assessment or reassessment or recomputation or fresh assessment, as the case may be, expires: Section 153(1) Time limit for completion of assessment and reassessments- (1) No order of assessment shall be made under section 143 or section 144 at any time after the expiry of - (a) Two years from the end of the assessment year in which the income was first assessable, or (b) One year from the end of the financial year in which a return or a revised return relating to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, is filed under sub-section(4) or sub-section (5) of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date by which the Transfer Pricing orders are to be passed as 31-10-2019. The impugned orders are thus, held to be barred by limitation . 14. The aforesaid decision of Single Judge was assailed by the Department in writ appeal before the Division Bench. The Division Bench of the Hon'ble Madras High Court in the case of DCIT vs. Saint Gobain India (P) Ltd. (supra) upheld the decision of Single Judge and observed 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 Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prior to the last date. The 60 days is to be calculated excluding the last date because of the use of the words prior to and the TPO has to pass order before the 60th day. In the present case, the word before used before 60 days would indicate that an order has to be passed before 1-11-2019 i.e on or before 31-10-2019 as rightly held by the Learned Judge. 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... note that as per proviso to section 92CA (3A), if the time limit for the TPO to pass an order is less than 60 days, then the remaining period shall be extended to 60 days. This implies that not only is the time frame mandatory, but also that the TPO has to pass an order within 60 days. 34. Further, the extension in the proviso referred above, also automatically extends the period of assessment to 60 days as per the second proviso to section 153. 35. Also, but for the reference to the TPO, the time limit for completing the assessment would only be 21 months from the end of the assessment year. It is only if a reference is pending, the department gets another 12 months. Once reference is made and after availing the benefit of the extended period to pass orders, the department cannot claim that the time limits are not mandatory. Hence, the contention raised in this regard is rejected. 36. As rightly pointed out by Mr. Ajay Vohra, learned senior counsel for the respondents in WA. Nos.1148 and 1149/2021, the word may has to be sometimes read as shall and vice versa depending upon the context in which it is used, the consequences of the performance or failure on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... followed. The word may is used there to imply that an order can be passed any day before 60 days and it is not that the order must be made on the day before the 60th day. The impact of the proviso to the subsection clarifies the mandatory nature of the time schedule. The word may cannot be interpreted to say that the legislature never wanted the authority to pass an order within 60 days and it gave a discretion. Therefore, the learned Judge rightly held the orders impugned in the writ petitions as barred by limitation, as the Board, in the Central Action Plan, has specified 31-10-2019 as the date on which orders are to be passed by the TPO, reiterating the time limit to be mandatory. The period of limitation for passing the assessment order in the instant case expires on 31/03/2014. The time limit for passing the order u/s. 92CA(3A) is sixty days prior to the date on which the limitation referred in section 153 of the Act expires. Thus, the limitation in the present case for passing the order u/s. 92CA(3) of the Act expires on 29/01/2014. The TPO passed the order u/s. 92CA(3) of the Act on 30/01/2014. Ergo, the order u/s. 92CA(3) of the Act is surely time barred by one da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rit in the additional grounds of appeal No.48 49. The assessee succeeds on the aforesaid legal grounds. 18. No arguments were made by ld. Counsel for the assessee in respect of original grounds of appeal / other additional grounds of appeal at this stage. Hence, they are left open for adjudication, if the need arises. 19. In the result, appeal by the assessee is allowed. ITA NO.1576/MUM/2015 A.Y. 2009-19(REVENUE S APPEAL ITA NO.2340/MUM/2015 (A.Y.2009-10) (ASSESSEE S APPEAL) 20. Shri Ajit Kumar Jain appearing on behalf of the assessee submitted at the outset that the assessee has filed additional grounds of appeal vide application dated 28/06/2021, inter-alia, assailing validity of the assessment order passed under section 143(3) r.w.s. 144C(13) of the Act and the validity of order passed under section 92CA(3) of the Act by the TPO on the ground that the aforesaid orders were passed beyond the period of limitation. The ld. Authorized Representative of the assessee submits that at this stage the assessee is only assailing validity of the order passed by TPO under section 92CA(3) and the assessment order passed under section 143(3) r.w.s. 144C(13) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lime limit prescribed under section 92CA(3A) read with section 153(4) of the Act. In view of the above, it is prayed that the Transfer Pricing order dated 30lh January 2013 passed by the learned Transfer Pricing Officer be held to be void abinitio. 23. A perusal of the above additional grounds of appeal reveal that the assessee has challenged validity of the assessment order passed u/s 143(3) r.w.s. 144(13) of the Act and the validity of the order passed by TPO u/s.92CA(3) of the Act. The issue raised by the assessee in the aforesaid additional grounds goes to the root of validity of assessment. It is no more resintegra that the assessee can raise legal ground at any stage, even during the appellate proceedings, if the facts are already on record. No fresh documentary evidence is required to be adduced for adjudicating aforementioned additional grounds. Hence, the additional ground No.40 41 are admitted for adjudication on merits. 24. The assessee has furnished a table giving relevant dates for calculating limitation for passing order u/s. 92CA(3) of the Act. The same is reproduced herein below: Particulars Ground No.41 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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