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TMI Blog2023 (12) TMI 1297X X X X Extracts X X X X X X X X Extracts X X X X ..... rst before getting into the merits of the case. 3. The assessee has challenged the impugned order dated 01.11.2019 passed u/s. 92CA(3) of the Act by the ld. TPO which ought to have been passed at any time before 60 days prior to the limitation for passing the assessment order and that the same is time barred and bad in law. 4. The brief facts are that the assessee company is engaged in the manufacturing and marketing of various international and national brands of alcoholic beverages for domestic consumption as well as for exports. The assessee filed its return of income dated 30.11.2016 declaring total income at Rs.44,93,70,650/-. The assessee's case was selected for complete scrutiny on the following issues: S. No. Issues i Whether value of international transactions are correctly shown in Form 3CEB and return of income. ii Whether the reason for delay in filing of return is justified. iii Whether the share capital is genuine and from disclosed sources. iv Whether claim of deduction against business income is admissible. v Whether the current liabilities shown are genuine. vi. Whether value of international transactions in respect of mutual agreement or arra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the proceeding before the ld. DRP. The ld. AR further contended that final assessment order was passed only on 23.04.2021 which is barred by limitation and without jurisdiction. The ld. AR relied on the decision of co-ordinate bench in the case of Johnson & Johnson Private Ltd. (in ITA No. 1740/Mum/2021, 2779/Mum/2016, CO No. 33/Mum/2017 and ITA No. 3015/Mum/2016 vide order dated 13.06.2023) and has also relied on the following decisions: * Pfizer Healthcare India Pvt. Ltd. (WP 1120/2021) dated 31.03.2022 (Madras HC) * Accenture Solutiions Pvt. Ltd. (ITA No. 8008/M/2019 dated 7 July, 2022 (Mumbai Tribunal) * ECL Finance Ltd. (ITA No. 899/M/2018) dated 22.09.2021 (Mum Tribunal) 8. The learned Departmental Representative ('ld.DR' for short), on the other hand, controverted the said fact and stated that the legal ground raised by the assessee does not hold any merit. The ld. DR contended that the provision of section 92CA(3A) of the Act has specified the word 'may' which is only directory and not mandatory and, therefore, this ground raised by the assessee does not hold merit. The ld. DR relied on the order of the lower authorities. 9. We have heard the rival subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at in the circumstances referred to in clause (ii) or clause (x) of Explanation 1 to section 153, if the period of limitation available to the Transfer Pricing Officer for making an order is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to have been extended accordingly. Time limit for completion of assessment, reassessment and recomputation. 153. (1) No order of assessment shall be made under section 143 or section 144 at any time after the expiry of twenty-one months from the end of the assessment year in which the income was first assessable. 11. On perusal of the above mentioned provision, it is observed that though in section 92CA(3A) of the Act it states that the ld. TPO has to pass the order before 60 days of the limitation period mentioned in section 153 which though seems to be only directory and not mandatory but various courts have held that the time limit prescribed for passing of the order by the ld. TPO is mandatory which has to be adhered to strictly while passing the TP order. In the present case, the order of the TPO should have been passed on or before 31.10.2019 and the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 Customs 2002 taxmann.com 1803, wherein, it was held as follows : "10. No words or expressions used in any statute can be said to be redundant or superfluous. In matters of interpretation one should not concentrate too much on one word and pay too little attention to other words. No provision in the statute and no word in any section can be construed in isolation. Every provision and every word must be looked at generally and in the context in which it is used. It is said that every statute is an edict of the legislature. The elementary principle of interpreting any word while considering a statute is to gather the mens or sententia legis of the legislature. Where the words are clear and there is no obscurity, and there is no ambiguity and the intention of the legislature is clearly conveyed, there is no sco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an 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 as orders are to be passed before the 60th day. Therefore, either way the contention of the Revenue is a fallacy and has no legs to stand. Mandatory or Directory 31. The next contention that has been raised by the learned senior standing counsel for the appellants is that the usage of the word "may" in section 92CA (3A) indicates that the time fixed is only directory, a guideline, not mandatory and is for the sake of internal proceedings. 32. Let us now examine the relevant procedures relating to Transfer Pricing. After an international transaction is noticed subject to satisfaction of section 92B, a reference is made to the TPO under sub-section (1) of section 92CA of the Act. The TPO after considering the documents submitted by the assessee is to pass an order under section 92CA (3) of the Act. As per section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the overall scheme and object of the provisions would have to be considered while determining whether it is mandatory or directory. 37. At this juncture, it is noteworthy to mention the commentary of Justice G.P.Singh on the interpretation of statutes, Principles of Statutory Interpretation (1st Edn., Lexis Nexis 2015), which is quoted below for ready reference: 'The intention of the legislature thus assimilates two aspects: In one aspect it carries the concept of "meaning" i.e. what the words mean and in another aspect, it conveys the concept of "purpose and object" or the "reason and spirit" pervading through the statute. The process of construction, therefore, combines both literal and purposive approaches. In other words the legislative intention i.e. the true or legal meaning of an enactment is derived by considering the meaning of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Pricing Officer is quashed 019. Now the issue is that when the transfer pricing order passed by the learned Transfer Pricing Officer is held to be invalid, therefore, there cannot be any variation as a consequent to the order of Transfer Pricing Officer. Therefore, the assessee ceases to be an 'eligible assessee' within the meaning of section 144C (15) (b) of the Act. The moment an assessee ceases to be an 'eligible assessee' in absence of valid transfer pricing order, the ld AO should not have passed the draft assessment order. Thus provision of section 144C does not apply to the assessee. Thus, the time limit for completion of the assessment reverts back to 21 Months from the end of the assessment year. Therefore, as held by the co-ordinate Bench in ATOS India Private Limited (supra), the final assessment order passed by the learned Assessing Officer on 26th February, 2016 is also barred by limitation. Therefore, following the decision of the co-ordinate Bench, we quash the assessment order passed for A.Y. 2011-12 by the learned Assessing Officer on 26th February, 2016 as it is barred by limitation. 13. By respectfully following the above said decision, gro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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