TMI Blog2023 (12) TMI 1297X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent : Shri Vachaspati Tripathi. ORDER PER KAVITHA RAJAGOPAL, J M: This appeal has been filed by the assessee, challenging the assessment order dated 23.04.2021 passed u/s. 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income Tax Act, 1961 ( the Act'), pertaining to the Assessment Year ( A.Y. for short) 2016-17 in pursuant to the direction of the Hon ble Dispute Resolution Panel ('ld. DRP' for short). 2. The assessee has challenged the present appeal on various grounds on transfer pricing along with other corporate tax grounds. The assessee has also raised a legal ground challenging the validity of the order passed by the ld. Transfer Pricing Officer ('TPO' for short) as being barred by limitation. As ground no. 2 goes to the very root of the case, we deem it fit to decide this ground first 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 enga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contended that when a reference is made to the ld. TPO by the ld. A.O., the ld. TPO will have to pass an order in time before 60 days prior to the date on which the period of limitation referred to in section 153 of the Act expires. The ld. AR contended that the period of limitation for completion of the assessment proceeding in the present case was 31.12.2019 where the ld. TPO ought to have passed the order on or before 31.10.2019. The ld. AR further contended that the ld. TPO in this case has passed the order only on 01.11.2019 which is barred by limitation as per section 153 of the Act. The ld. AR stated that the final assessment order ought to have been passed on or before 31.12.2019 which again is time barred as per the provision of section 153 of the Act which also includes 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r.w.s. 153(1) of the Act. The relevant extract of the said provisions are cited hereunder for ease of reference: Reference to Transfer Pricing Officer. 92CA. (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 (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... days period from 31/3/2015 expires on 29 January 2015. But the ld TPO has passed TP Assessment order u/s 92CA (3) of the Act on 30th January 2015. Thus, the order of ld TPO is passed beyond statutory time available. 017. Hon'ble Madras HC in case of Saint Gobain India Pvt. Ltd. 444 ITR 636 [2022] 137 taxmann.com 215 (Madras) where in it has been held :- 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 Customs 2002 taxmann.com 1803, wherein, it was held as follows : 10. No words or expressions u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 as orders are to be passed before the 60th day. Therefore, either way the contention of the Revenue is a fallacy and has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -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. 018. Therefore, the order of the learned Transfer Pricing Officer is passed beyond this statutory time limit available and therefore, the order of the learned Transfer 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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