TMI Blog2023 (4) TMI 1240X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. - SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER For the Appellant : Percy Pardiwala Jasmin Amalsadvala For the Respondent : Biswanath Das ORDER Per Amarjit Singh (AM): Both these cross appeals filed by the assesse and the revenue and arise from the common order therefore for the sake of convenience both these appeals adjudicated together by this common order. ITA No. 2860/Mum/2022 1. On the facts and in the circumstances of the case and in law, the Hon'ble Commissioner of Income Tax (Appeals) 58 Hon'ble CIT(A)']/Additional Commissioner of Income Tax, Circle - 2(3), Mumbai (AO)/ Deputy Commissioner of Income Tax, Transfer Pricing 11(8), Mumbai (TPO) erred in applying transfer pricing (TP) provisions to transactions undertaken by the Appellant (a life insurance company) and making a TP adjustment to the Appellant's reported taxable surplus, when the Act does not provide for such a mechanism as section 44 of the Income- tax Act, 1961 (the Act) overrides the provisions of section 28-438 of the Act. 2. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A)/A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal. 2. Fact in brief is that return of income declaring loss of Rs.5,34,92,04,468/- was filed on 11.09.2009. The case was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued on 23.08.2010. The assessee company is a joint venture between Tata Sons Ltd. with 74% stake and American International Group (Inc) with 26% stake. The assessee is engaged in providing an array of life insurance product and solutions to individuals, business and corporations. During the year under consideration the assessee has reported the international transaction with its associated enterprise in Form 3CEB, therefore, the A.O referred the international transaction entered by the assesse u/s 92CA(1) to the transfer pricing officer vide order u/s 92CA(3) dated 30.01.2013. The TPO has made arm s length adjustment of Rs.8,94,59,449/- as under: S. No. Nature of transaction Amount of adjustment 1. Allocation of costs for system maintenance support services by China AE Rs.26,90,709/- 2. Allocation of costs for global e-mail charges by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e A.O held that surplus shown in the actuarial report consists of surplus fund is of no help to the assessee as Rule 2 does not provide for any reduction of such funds from the surplus as shown in the actuarial report. Therefore, the A.O has added the surplus as per actuarial report of Rs.8,23,26,000/- to the total income of the assesse. 4. Aggrieved, the assesse filed the appeal before the ld. CIT(A). The ld. CIT(A) has partly allowed the appeal of the assessee. 5. During the course of appellate proceedings before us the ld. Counsel filed additional ground of appeal as follows: The assessment order dated 25 April 2013 passed by the learned Assistant Commissioner of Income tax-2(3), Mumbai under section 143(3) read with section 144C(3) of the Income tax Act, 1961 is void and bad in law as it has been passed beyond the period of limitation referred to in section 153 of the Act. The Appellant craves leave to add, alter, vary, omit, substitute or amend the ground of appeal, at any time before or at, the time of hearing of the appeal, so as to enable the Hon ble Income-tax Appellate Tribunal to decide this appeal according to law. The ld. Counsel has also placed relian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of Sec. 153 of the Act is 31.03.2013, therefore, the time limit for passing the order u/s 92CA(3A) of the Act is before 60 days prior to the date on which limitation for passing the assessment order is expired. As per the computation shown by the ld. Counsel the order u/s 92CA(3) of the Act ought to be passed on or before 29.01.2013. However, the TPO has passed the same order on 30.01.2013. Therefore, the ld. Counsel vehemently contended that impugned order passed u/s 92CA(3) is time barred by 1 day. The ld. Counsel has placed reliance on the following judicial pronouncements of Hon ble Madras High Court i.e Pfizer Healthcare India Pvt. Ltd. Vs. JCOIT, 433 ITR 028 (Mad); DCIT Vs. Saint Gobain India P. Ltd. 137 taxmann.com 215 (Mad) and also placed reliance the decision of ITAT Mumbai in the cases i.e (i) Strides Shasum Limited Vs. DCIT, Circle 15(3)(2) vide ITA No. 2877/Mum/2014 dated 28.02.2023 (ii) M/s Mondelez India Foods Private Limited Vs. Ad. CIT, Range 5(1) vide ITA Nos. 1492, 1576 2340/Mum/2015 dated 14.11.2022 and (iii) M/s Tubacex Prakash India Pvt. Ltd. Vs. The ACIT/JCIT/DCIT/ACIT-national E-assessment Centre, Delhi and DCIT, circle 14(1)(2), dated 24.03.2023. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Transfer Pricing Order u/s 93CA(3) of the Act ought to be passed on or before 29.01.2013 8. Date on which Transfer Pricing Order u/s 92CA(3) is passed 30.01.2013 9. Date on which Final Assessment was passed. 26.04.2013 The relevant provisions of Sec. 92CA(3A) is reproduced as under: 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pires'. Excluding 31-12-2019, the period of 60 days would 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 . 8. Further the decision of division bench of the Hon ble Madras High Court in the case of DCIT Vs. Saint Gobain India P. Ltd. as referred supra by the ld. Counsel is reproduced 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 super ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 excluded. After excluding 31- 12-2019, if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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.1148 and 1149/2021, the word may has to be sometimes read as shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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. After taking into consideration the material placed on record it is undisputed fact that transfer pricing officer has passed order u/s 92CA(3) on 30.01.2013 whereas the limitation for passing the said order u/s 92CA(3) expires on 29.01.2013. Therefore, taking into consideration the provision of the Act and decision of Hon ble Madras High Court in the cases referred supra the order u/s 92CA(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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