Omission of clause (i) of sec. 92BA is retrospective though it stood omitted w.e.f. 1-4-2017: ITAT

Case Details: Ammann India (P.) Ltd. v. ACIT - [2022] 134 taxmann.com 10 (Ahmedabad - Trib.)

Judiciary and Counsel Details

• • Waseem Ahmed, Accountant Member and Ms. Madhumita Roy, Judicial Member
  • S.N. Soparkar, Sr. Adv. and Parin Shah, AR for the Appellant. 
  • Mohd. Usman, CIT DR for the Respondent.

Facts of the Case

Assessee was in the business of manufacturing construction equipment and components. Its return was selected for scrutiny and was issued notice under Section 143(2). During the relevant year, the assessee had acquired the assets and liabilities of the asphalt plant business of GAIL, its domestic AE and acquired the assets and liabilities of sensor paver business from another AE.

The Transfer Pricing Officer (TPO) treated the said purchase as Specified Domestic Transaction (SDT) under section 92BA and made an upward adjustment. Before the DRP, the assessee submitted that Section 92BA(i) was deleted by the Finance Act, 2017, and thus, SDT cannot be made applicable. However, DRP upheld the order of TPO. Assessee filed the instant appeal before the Tribunal.

ITAT Held

The Tribunal held that it is a settled principle of law that when a particular provision is repealed from the statute, the normal effect would be to obliterate it from the statute book as completely as if it had never been passed. The statute must be considered as a law that never existed.

Further, where a particular provision in a statute is unconditionally omitted, and in its place, another provision dealing with the same contingency is introduced without a saving clause in favour of pending proceedings. Then it can be reasonably inferred that the legislature intends that the pending proceeding shall not continue, but fresh proceedings for the same purpose may be initiated under the new provision.

Therefore, when Finance Act, 2017, w.e.f. 01.04.2017 omitted a Clause (i) of Section 92BA from the statute; the same cannot be made applicable in the pending proceeding. It is considered non-est in the concerned statute as if it had never been passed.
In that view, once the said clause is omitted, the decision made by TPO and DRP invoking such Section 92BA is without any basis and/or jurisdiction invalid and bad in law. The same was liable to be quashed.