TMI Blog2023 (8) TMI 629X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus the time limit given in sub-section (3A) of section 92CA is mandatory for the passing of the order u/s. 92CA(3) by the Ld. TPO. Based on the interpretation by PFIZER HEALTHCARE INDIA (P.) [ 2021 (2) TMI 1152 - MADRAS HIGH COURT] the period of 60 days prior to the time limit as per section 153(1), available with the Ld. TPO, for passing his order u/s. 92CA(3), for the years under consideration is to be calculated accordingly. TPO admittedly has passed the order u/s. 92CA(3) on 30.01.2014 and 30.01.2015, which is beyond the period of limitation and therefore deserves to be quashed. We therefore allow the Ground no. 1 raised by the assessee. - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER For the Appellant : Shri Ketan Ved, CA For the Respondent : Ms. Neera Malhotra, CIT-DR ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeals arises out of separate orders both dated 24.11.2022 passed by the Ld. ACIT, Circle 2 (1)(1), Bangalore for A.Ys. 2010-11 and 2011-12. Brief facts of the case are as under: 2. Assessee is a company engaged in the business of integration of hardware software in the field of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reads as follow:- On the facts and in the circumstances of the case and in law: Transfer Pricing related 1A. The impugned order u/s 92CA(3) of the learned Transfer Pricing Officer has been passed beyond the time limit provide under section 92CA(3A), therefore, bad in law and liable to the quashed. We shall first adjudicate the additional ground raised by the assessee. 4. At the time of hearing before the Tribunal, the learned AR submitted that the additional ground is raised for the first time before the Tribunal as it was inadvertently not raised before the Income Tax Authorities. The learned AR, thus, prayed that the additional ground may be admitted in view of the judgment of the Hon ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT (1998) 229 ITR 383 (SC). 5. The learned Departmental Representative did not raise any serious objection for admitting the additional ground. 6. After hearing both the parties and perusing the material on record, we are of the view that this additional ground raised by the assessee will go to the root of the matter. Hence, we admit the additional ground raised by the assessee, which would not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.2014 and 31.03.2015. Accordingly, as required by sub clause (3A) of section 92CA of the act, 60 days prior to the date on which the limitation for passing the order by the Ld.TPO, expires on 29.01.2014 and 29.01.2015 for A.Ys. 2010-11 2011-12 respectively. He submitted that thus the order passed by the Ld. TPO u/s. 92CA(3) of the act is time barred by one day. 3.2. The Ld. AR placed reliance on following decisions in support of its contention. a) Decision of Hon ble Madras High Court in case of Pfizer Healthcare India Pvt. Ltd. vs. JCIT reported in (2021) 124 taxmann.com 536 b) Decision of Hon ble Madras High Court in case of DCIT vs. Saint Gobain India Pvt. Ltd. reported in (2022) 137 taxmann.com 215 c) Decision of Coordinate Bench of this Tribunal in case of Swiss Re Global Business Solution India (P.) Ltd. v/s. DCIT reported in [2022] 138 taxmann.com 418 (Bangalore - Trib.) [A.Y. 2010-11] d) Decision of Coordinate Bench of this Tribunal in case of DCIT v/s. Tata Power Solar Systems Ltd. reported in [2022] 140 taxmann.com 272 (Bangalore - Trib.) [A.Y. 2011-12]; and e) Decision of Coordinate Bench of this Tribunal in case of Sigma Aldrich Che ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts referred to in sub-section (3) of section 92D and after considering such evidence as the Transfer Pricing Officer may require on any specified points and after taking into account all relevant materials which he has gathered, the Transfer Pricing Officer shall, by order in writing, determine the arm's length price in relation to the international transaction 28[or specified domestic transaction] in accordance with sub-section (3) of section 92C and send a copy of his order to the Assessing Officer and to the assessee. (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:] Provided that in the circumstances referred to in clause (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 92CA w.e.f. 1.6.2007, that provided distinct time limit for the passing of the order by the Ld. TPO. From 01/06/2007, sub section (3A) to section 92CA, required the Ld. TPO to pass an order within a period less than sixty days prior to the date of completion of assessment as per section 153(1). With the insertion of section 92CA(3A), the time limit for passing of the assessment order continued to be still governed by section 153, though the time limit for passing of the order by the Ld. TPO was also set within the overall time limit prescribed u/s.153 for the passing of the assessment order. 4.3. Thus in our view, the time limit for passing of the order by the Ld.TPO under section 92CA(3A) is linked with the time limit, as mentioned in section 153(1) of the Act. We find that, the Finance Act, 2007 inserted sub-section (3A) carrying the time limit of sixty days for passing of the order by the Ld.TPO before the expiry of time limit for completion of assessment by the Ld.AO u/s.153. The word may used in section 92CA(3A), might connote merely an enabling or permissive power in the sense of the usual phrase, but it is also capable of being construed as referring to a compella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d expire on 1-11-2019 and the transfer pricing orders thus ought to have been passed on 31-10-2019 or any date prior thereto. Incidentally, the Board, in the Central Action Plan also indicates the 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. 4.6. The view expressed by the Single Judge in the Writ Petition in case of Pfizer Healthcare India (pvt.) Ltd., vs. JCIT(supra) has been further approved by a division bench in case of DCIT vs. Saint Gobain India (Pvt). Ltd (supra). Hon ble Court observed and held 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 tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .) 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 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 ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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.114 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 60 th 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 be passed by the TPO, reiterating the time limit to be mandatory. 4.7. The arguments advanced by the Ld. CIT. DR have been met with in the above observation by Hon ble Madras High Court. We therefore reject the argument advanced by the Ld. CIT. DR on this count. 4.8. Thus the time limit given in sub-section (3A) of section 92CA is mandatory for the passing of the order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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