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TMI Blog2022 (6) TMI 1378X X X X Extracts X X X X X X X X Extracts X X X X ..... per law (ground 10) that would suffice. The surviving additional ground 12 reads as follows:- "Ground 12 On the facts and in the circumstances of the case and in law, the order dated 30 January 2015 passed by the learned Additional Commissioner of Income Tax, Range 2(2) (ld.TPO) under section 92CA of the Act is beyond the time limit prescribed under section 92CA(3A) r.w.s. 153 of the Incometax Act, 1961 (Act) thus making the transfer pricing order illegal, bad in law, null and void and liable to be quashed." 3. The learned AR submitted that the issue raised in the additional ground is purely legal and does not required any investigation of new facts, hence, the same may be admitted and adjudicated. 4. The learned Departmental Representative was duly heard. 5. We have heard rival submissions and perused the material on record. The above additional ground 12 raises a pure legal issue and does not required investigation of new facts other than which is already on record. Therefore, in view of the judgments of the Hon'ble Apex Court in the case of National Thermal Power Co. Ltd. v. CIT (1998) 229 ITR 383 (SC) and in the case of Jute Corporation of India Ltd. v. CIT (1991) 187 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment year for completion of assessment (where a reference is made to the TPO for determination of ALP). Accordingly, the due date for passing the assessment order in the case of the assessee for assessment year 2011-2012 is 31st March, 2015. Consequently, in terms of section 92CA(3A) of the I.T.Act, the 60th day prior to 31st March, 2015 (i.e., 60th day from 30th March, 2015) falls on 30th January, 2015 (counting 30 days in March, 28 days in February and 02 days in January). Accordingly, the due date for the TPO to pass the transfer pricing order for assessment year 2011-2012 should be at any time before 30th January, 2015, i.e., on or before 29th January, 2015. In the present case, the TPO has passed the transfer pricing order on 30th January, 2015, i.e., beyond the time limit prescribed under the Act. Hence, the same is barred by limitation in terms of section 92CA(3A) r.w.s. 153 of the I.T.Act. The Hon'ble Madras High Court in the case of DCIT v. M/s.Pfizer Healthcare India Pvt. Ltd. (supra), has dismissed the Writ appeal filed by the Revenue by upholding the judgment of the Hon'ble Single Judge (Writ Petition No.32699 of 2019 dated 07th September, 2020). The assessee in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the beginning of a given day (or date) and 2400 to designate the end of a given day (or date). " 16. As per the International Standards Organization, ISO 8601- :2019 midnight may only be referred to as "00:00", corresponding to the beginning of a calendar day. The earlier use of reference to 24.00 hours to mark the end of the day, was dropped. 17. In India, the midnight or 00.00 hours has been always used to denote the beginning of the next date. A reference could be made to our Independence day, wherein the stroke of midnight at 00.00 hours on 15.08.1947 is considered as the moment of Independence as per the Indian Independence Act, 1947. 18. Also, it is not out of place to mention here that the new year eve of every year, through out the world is celebrated at 00.00 hours and it is regarded as the beginning of a new day and not as an extension of the previous day. 19. A reference can also be made to various insurance policies, wherein the beginning of the day is reckoned as 00.00 hours and the end of the day at 23 :59:59 hours. 20. Even as per the contentions of the appellants, the assessing officer has time upto 23:59:59 hours on 31.]2.20]9 to pass assessment or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the said Act come into force on the midnight on the expiration of the day preceding its commencement. i.e., the midnight between 25-3-1983 and 26-3-1983. There can be no doubt that if the second expression "in which 110 award has been made by the said date" was not also present in sub-section (7), then the undoubted result of the first expression would be that an arbitration proceeding in which no award had been made up to the midnight between 25-3-1983 and 26-3-1983 would be a pending arbitration proceeding which automatically stood transferred to the Arbitration Tribunal. The question, therefore, is whether the further words used in the second expression in sub-section (7) must lead to a different conclusion. The construction of the first expression being unambiguous, the second expression must be construed harmoniously unless that is not a permissible construction of the expression "by the said date". 7. It does appear to us that the second expression, namely, "in which no award has been made by the said date" was further used in sub-section (7) ex abundante cautela to clarify the meaning of pending proceedings by indicating that only those arbitration proceedings in w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch no award has been made before the said date" i.e. in. which no award has been made before the date of commencement of the Act, namely, 26-3-1983. This would be the harmonious construction of the two expressions in the provision. 10. Obviously, an award made on 26-3-1983 cannot be said to be an award made before 26-3-1983 and, therefore, the award in the present case having been made on 26-3-1983 and not before 26-3-1983, the date of commencement of the Act, the arbitrator had no jurisdiction to make the award as it was a pending arbitration proceeding which automatically stood transferred to the Arbitration Tribunal." 22. From Section 153, the regular time for passing the assessment order ends on 31.12.2018 and with extension on the matter being referred to TPO, the time limit to pass assessment order would lapse on 31.12.2019. What is not to be forgotten, while interpreting a taxing statute, is the explicit and clear language used by the parliament while enacting the law. If the language employed in any statute is clear and unambiguous from its plain and natural meaning, external aid for interpretation are unnecessary. In the present case, we are called upon to adjudicate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to this case. 26. Further, the general interpretation by resorting to the meaning conveyed under the General Clauses Act cannot be adopted while interpreting 92CA (3A), because, the context and the language employed therein are completely different and it is pertinent to note that the words "from" and "to" have not been used. Even the employment of the General Clauses Act will not aid the Revenue, the reason of which will be disclosed a little later in this judgment. But, right now, it is relevant to consider the scope of the word "to". 27. The word "to" is used as a preposition or as an adverb. In popular sense, it is used to express the direction in which a person, thing, or time travels. The flow of direction is to be gauged from the preceding word or words used, like "prior to" or "upto". Keeping the same in mind, if we look at the wording of Section 92CA (3A), we cannot accept the contention of the Revenue that the time to be reckoned is from 3l.12.2019 and not 30.12.2019 as has been rightly done by the learned Judge. 28. The word "date" in section 92CA(3A) would indicate 3l.12.2019. But the preceding words "prior to" would indicate that for the purpose of calcul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew decisions of this Court 'would suffice. (See : Gwalior Rayons Silk Mfg. (Wvg.) Co. Ltd. v. Custodian of Vested Forests [1990 Supp SCC 785 : AIR 1990 SC 1747J, Union ofIndia v. Deoki Nandan Aggarwal [1992 Supp (1) SCC 323 : 1992 SCC (L&S) 2-18 : (1992) 19 ATC 219: AIR 1992 SC 96J, Institute of Chartered Accountants of India v. Price Waterhouse[(1997) 6 SCC 312] and Harbhajan Singh v. Press Council of India [(2002) 3 SCC 722 : .IT (2002) 3 SC 21].) " 29. The language employed is simple. 31.12.2019 is the last date for the assessing officer to pass his order under Section 153. The TPO has to pass order before 60 days 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 1111/2019 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 pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f directions issued under sub-section (5) of Section 144C of the Act, the Assessing Officer shall in conformity with the directions complete the assessment proceedings. It goes without saying that if no objections are filed by the Assessee either before the DRP or the assessing officer to the determination by the TPO, section 92CA(4) would come into operation. Therefore, it is very clear that once a reference is made, it would have an impact on the assessment unless a decision on merits is taken by DRP rejecting or varying the determination by the TPO. 33. It would only be apropos to 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 provision 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the provisions to conclude the assessment, is the consequence or the effect that follows, if an order is not passed in time. When an order is passed in time, the procedures under 144C and 92CA(4) are to be followed. When the determination is not in time, it cannot be relied upon by the assessing officer while concluding the assessment proceedings. 39. Upon consideration of the judgments and the scheme of the Act, we are of the opinion that the word "may" used therein has to be construed as "shall" and the time period fixed therein has to be scrupulously 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 sub-section 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That the learned CIT(A) erred in upholding the approach of the learned AO by implying that for the purpose of computing admissible foreign tax credit, only the income portion in the receipts is taken into account and not the `gross receipts' itself." 10. In the above grounds, the assessee submits that foreign tax credit claimed by the assessee ought to be granted. We restore the matter to the A.O. for de novo consideration. The A.O. is directed to compute foreign tax credit that is due to the assessee as per law after affording a reasonable opportunity of hearing to the assessee. It is ordered accordingly. In the result, grounds 10 and 11 are allowed for statistical purposes. ITA No.2025/Bang/2017 (Revenue's appeal) 11. Since we have quashed the transfer pricing adjustment, the ground raised by the Revenue with regard to the transfer pricing adjustment is rendered infructuous and the same are not adjudicated. (Grounds 1 to 10). 12. The only surviving ground is with regard to the computation of deduction u/s 10A of the I.T.Act. The CIT(A) had directed the A.O. to reduce the impugned expenses from both the export turnover as well as from the total turnover while computing the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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