TUBACEX PRAKASH INDIA P. LTD.,MUMBAI vs. ADDL/JT/CY/ASSTT/CIT/ ITO, NATIONAL E-ASSESSMENT CENTRE,, DELHI

आदेश / O R D E R PER M. BALAGANESH (A.M):

3. The assessee has also filed additional ground before us on 18/07/2022 wherein it had stated that since the order of the ld. TPO is barred by limitation, the assessee does not become “eligible assessee” u/s.144C of the Act and hence, the draft assessment order dated 07/12/2019 and final assessment order passed by the ld. AO on 31/03/2021 using the extended period provided in third proviso to Section 153 of the Act would also be barred by limitation.

4.1. The draft assessment order was passed by the ld. AO u/s.143(3) r.w.s. 144C of the Act on 07/12/2019 determining the total loss of the assessee at Rs.6,74,84,779/- under normal provisions of the Act and book profit of Rs 1,94,35,239/- u/s 115JB of the Act. The assessee preferred objections before the ld. DRP. The ld. DRP issued directions u/s.144C(5) of the Act on 19/03/2021. Pursuant to the directions of the ld. DRP, the ld. AO passed the final assessment order u/s.143(3) r.w.s. 144C(13) r.w.s 143(3A) and 143(3B) of the Act on 31/03/2021 determining total loss of the assessee at Rs 10,47,29,983/- under normal provisions of the Act and computation of book profits u/s 115JB of the Act was not made in this final assessment order. Against this final assessment order, the assessee is in appeal before us.

4.2. The ld. AR before us stated that the transfer pricing order passed by the ld. TPO u/s.92CA(3) on 01/11/2019 is clearly barred by limitation as it is passed in violation of provisions of Section 92CA(3A) of the Act. He placed on record the following table to buttress this argument:-

Sr. Particulars Relevant date/ No. period Assessment Year involved 2016-17 1. Period of limitation for making an order of assessment as per 21 months from the section 153 of the Income-tax Act, 1961 ["the Act"] end of the (Without TP) Assessment Year i.e. 31.12.2018 2. Extension of period of limitation in case reference is made u/s. 12 months 92CA of the Act.

M/s. Tubacex Prakash India Pvt. Ltd.

M/s. Tubacex Prakash India Pvt. Ltd. 1.4 When the period is marked by terminus a quo and terminus ad quem, the canon of interpretation envisaged and Section 9 of the General Clauses Act, 1897require to exclude the first day and to include the last day. 1.5 The Hon'ble ITAT erred in excluding both the date of order and as well as the last day which is against the express provisions of Sec. 92CA(3A), the settled laws of interpretation and General Clauses Act with regard to the computation of time limit. Such an interpretation of the Hon ble Tribunal will cut down the actual period of limitation given by the legislature. 1.6 Sec.92CA(3A) expressly provides for counting the last day i e. 31.12.2019 therefore for counting the 60 days the last day has to be taken into account and thus the order passed by the TPO dated 01.11.2019 is well within the time. 1.7 When the word "to" is specifically incorporated in Sec 92CA(3A), any other interpretation excluding the last day would be against the plain language of the statute and the intent of the legislature. 1.8 The period of limitation computed by the assessee in the additional ground is not as per the letter and spirit contained in the Act. The Section 92CA(3A) states that "an order u/s.92CA(3) may be made at any time before 60 days prior to the date on which the period of limitation referred to in Section 153 expires". The Section refers that an order may be made at any time before 60 days and these 60 days have to be prior to the date on which Sec. 153 limitation expires. It needs to be noted that the word used regarding limitation in Section 153 is expires that implies that the date on that particular time ceases to exist, that is not alive and it has expired. The last day expires on 00.00 am. It is only after the expiry of this date that an order may not be passed. Therefore, while computing the 60 days period, the last day of December has to be counted for computing the time limitation If the same is counted, then working reverse the period of limitation for passing of a TP Order expires on 01.11.2019 and since the order is passed on this date, therefore the order is not barred by time limitation. 1.9 Sec. 92CA(3A) uses the word may only and the same cannot be construed as shall and equated to limitation especially when further proceedings are contemplated under the Act such as passing draft assessment order, remedy before Dispute resolution panel and final assessment order. 1.10 There is no necessity or occasion to read the word "may" as "shall" Sub-sections 3A and 4 were introduced in Sec. 92CA by the very same Finance Act, 2007 and the Legislature has consciously used the word "may" in Sec. 92CA(3A) while using the word "shall" in Sec. 92CA(4) Hence, in view of the context and background of the provisions, the word "may" should not and cannot be read as ―shall‖.

M/s. Tubacex Prakash India Pvt. Ltd. 4.4. For the sake of convenience, the provisions of Section 92CA(3A) of the Act are reproduced hereunder:-

Reference to Transfer Pricing Officer. 92CA. (1) ……………………………………………………………………………………… (2) …………………………………………………………………………………….. (2A) …………………………………………………………………………………….. (2B) …………………………………………………………………………………….. (2C) …………………………………………………………………………………….. (3) On the date specified in the notice under sub-section (2), or as soon thereafter as may be, after hearing such evidence as the assessee may produce, including any information or documents 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 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:] 4.5. From the bare reading of the aforesaid provisions of Section 92CA(3A) of the Act, we find that the time limit prescribed in Section 153 of the Act for completion of assessment is 31/12/2019 for A.Y.2016-17 considering the extended period of one year as per third proviso thereon. The provisions of Section 92CA(3A) mandates that ld. TPO should pass an order u/s.92CA(3) of the Act at any time before 60 days prior to the date on which the period of limitation referred to in Section 153 of the Act for making the order of assessment or re-assessment expires. As stated earlier, the time limit for completion of assessment u/s.153 of the Act is M/s. Tubacex Prakash India Pvt. Ltd. 31/12/2019. In order to reckon 60 days prior to that date, obviously the date of 31/12/2019 should be ignored. Hence, 60 days prior to 31/12/2019 would fall on 31/10/2019 i.e. 30 days in December and 30 days in November. Hence, the due date for passing the order by the ld. TPO u/s.92CA(3) of the Act would be 31/10/2019. In other words, the ld. TPO as per Section 92CA(3A) of the Act is bound to pass an order u/s 92CA(3) of the Act on or before 31/10/2019. In the instant case, since the order of the ld. TPO is passed on 01/11/2019, it is squarely barred by limitation as it is in violation of provisions of Section 92CA(3A) of the Act. In this regard, the ld. AR rightly placed reliance on the decision of the Hon’ble Madras High Court Single Bench decision in the case of Pfizer Healthcare India (P.) Ltd. vs. JCIT reported in 433 ITR 28 (Madras). This decision was subject matter of consideration by the Division Bench of Hon’ble Madras High court in the case of DCIT vs. Saint Gobain India (P.) Ltd. reported in 444 ITR 636 (Madras). This Division Bench approved the decision of Single Bench of Hon’ble Madras High Court. The relevant operative portion of the Division Bench’s order is reproduced hereunder:-

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 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 M/s. Tubacex Prakash India Pvt. Ltd.

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 92CA(3A), the order has to be passed before the expiry of 60 days prior to the date on which the period of limitation under section 153 expires. As per 92CA(4), the assessing officer has to pass an order in conformity with the order of the TPO. After receipt of the order from the TPO determining ALP, the assessing officer is to forward a draft assessment order to the assessee, who has an option either to file his acceptance of the variation of the assessment or file his objection to any such variation with the Dispute Resolution Panel and also the Assessing Officer. Sub- section (5) of section 144C of the Act provides that if any objections are raised by the assessee before the Dispute Resolution Panel, the Panel is empowered to issue such direction as it thinks fit for the guidance of the Assessing Officer after considering various details provided in Clauses (A) to (G) thereof. Sub-section (13) of section 144C of the Act provides that upon receipt of directions issued under sub-section (5) of section 144C of the Act, the Assessing Officer shall in conformity with the directions complete the assessment proceedings. It goes without saying that if no objections are filed by the Assessee either before the DRP or the assessing officer to the determination by the TPO, section 92CA(4) would come into operation. Therefore, it is very clear that once a reference 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 M/s. Tubacex Prakash India Pvt. Ltd.

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 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 the words used in the enactment in the light of any discernible purpose or object which comprehends the mischief and its remedy to which the enactment is directed. This formulation later received the approval of the Supreme Court and was called the "cardinal principle of construction".' 38. In case of assessments involving transfer pricing, fixing of time limits at various stages sets forth that the object of the provisions is to facilitate faster assessment involving such determination. In the present case, as rightly held by the learned Judge in paragraphs 22 to 29 of the order dated 7-9-2020, the order of the TPO or the failure to pass an order before 60 days will have an impact in the order to be passed by the Assessing Officer, for which an outer time limit has been prescribed under sections 144C and 153 and is hence mandatory. What is also not to be forgotten, considering the scheme of the Act, the inter-relatability and inter-dependency of the provisions to conclude the assessment, is the consequence or the effect that follows, if an order is not passed in time. When an order is passed in time, the procedures under 144C and 92CA(4) are to be followed. When the determination is not in time, it cannot be relied upon by the assessing officer while concluding the assessment proceedings.

39. Upon consideration of 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 60th 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.

M/s. Tubacex Prakash India Pvt. Ltd. V. Conclusion.

40. Ergo, we find no reasons to interfere with the order of the Learned Judge, which is impugned herein and accordingly, dismiss these intra-court appeals, but without costs. Consequently, connected miscellaneous petitions are closed.‖ 4.6. Now yet another issue that arises for our consideration which is subject matter of additional ground raised by the assessee vide letter dated 18/07/2022. In our considered opinion, the ground raised by the assessee goes to the root of the matter and is purely a legal issue and does not require any verification of facts. Hence, in view of the decision of the Hon’ble Supreme Court in the case of NTPC Ltd reported in 229 ITR 383, the additional ground raised by the assessee is hereby admitted and taken up for adjudication.

4.7. We find that once we hold that the order of the ld. TPO dated 01/11/2019 is barred by limitation, then the assessee would be outside the ambit of becoming “eligible assessee” u/s.144C(15)(b)(i) of the Act. Accordingly, the extended time period provided in Section 153 of the Act vide third proviso thereof would not be applicable to the facts of the instant case. By this process, the draft assessment order passed by the ld. AO on 07/12/2019 for A.Y.2016-17 also becomes barred by limitation. Because of the draft assessment order getting barred by limitation, it becomes an order void ab initio. Accordingly, any subsequent proceedings emanating from the illegal and invalid order i.e. DRP directions dated 19/03/2021 and final assessment order dated 31/03/2021 also becomes void ab initio. In support of this, the ld. AR before us placed reliance on the decision of the Co-ordinate Bench of this Tribunal in the case of Mondelez India Foods Pvt. Ltd. vs. Addl. CIT in dated 14/11/2022 and Atos India Pvt. Ltd vs. DCIT in ITA No.1795/Mum/2017 dated 23/02/2023. Per contra, the ld. DR placed M/s. Tubacex Prakash India Pvt. Ltd. reliance on the report of the ld. AO on the additional ground raised by the assessee which is reproduced supra. The ld. DR placed reliance on the decision of the Co-ordinate Bench of the Delhi Tribunal in the case of Louis Dreyfus Commodities India Private Ltd. vs DCIT in ITA No.2381/Del/2014 dated 11/03/2021 which is also reported in 138 taxmann.com 556. In the said decision of the Delhi Tribunal in para 27 thereon it has been held as under:-

“27. Consequent additions made on account of transfer pricing adjustment by way of determining the ALP transaction by the TPO are also not sustainable in the eyes of law, the order of the TPO (supra) being barred by limitation. Since vide assessment order dated 24-2-2014 AO has made addition on account of determination of ALP of international transaction, such addition stands deleted being order of ld. TPO barred by limitation, but the assessment order u/s 143 (3) passed by AO is in time, it stands except those additions proposed by ld. TPO. Thus, additions made by AO, based on order of ld. TPO, stand deleted without entering into grounds raised on merits by the taxpayer. Consequently, the appeal filed by the taxpayer is allowed.‖ 4.8. Accordingly, the ld. DR vehemently argued that even if it is held that the order of ld. TPO is barred by limitation pursuant to the decision of the Hon’ble Madras High Court, still the corporate tax issues that had been added by the ld. AO would survive and that had to be independently adjudicated upon. We find that the Co-ordinate Bench of this Tribunal in the case of Mondelez India Foods Pvt. Ltd referred to supra after considering the decision of Delhi Tribunal (relied by the ld. DR herein) had ultimately distinguished the decision of the Delhi Tribunal and rendered the decision in favour of the assessee. The relevant operative portion of the said order of this Mumbai Tribunal dated 14/11/2022 are reproduced hereunder:-

―7.5 The ld.Counsel for the assessee further submits that the provisions of section 144C of the Act are applicable only to the ―eligible assessee‖ as defined in sub-section (15), clause(b) to section 144C of the Act. The ld.Counsel for the assessee again draws support from the decision of Hon'ble Madras High Court in M/s. Tubacex Prakash India Pvt. Ltd. the case of Saint Gobain India (P) Ltd.,(supra) to buttress his arguments, that the assessee in the present case is not ―eligible assessee‖as there is no valid order under section 92CA(3) of the Act in the case of assessee. Therefore, the assessment framed on the basis of non-est order of TPO is unsustainable. The ld.Counsel for the assessee further asserted that the assessment order dated 21/05/2015 is time barred as the limitation of pasing the assessment order got over on 31/03/2014.

in additional grounds of appeal No.48 & 49.

11. The assessee has questioned the validity of order passed u/s.92CA(3) of the Act alleging the same to be barred by limitation. Before proceeding further to adjudicate this issue it would be imperative to have a glance on the relevant dates. Date Events M/s. Tubacex Prakash India Pvt. Ltd. 30/01/2014 TPO passed order u/s. 92CA of the Act 28/03/2014 A.O Passed draft assessment order 19/12/2014 Directions of the DRP u/s.144C(15) of the Act 29/01/2015 Final assessment order. The contention of the assessee is that the order passed u/s.92CA(3) of the Act is time barred by one day. The period of limitation for passing the order u/s. 92CA(3) of the Act is computed by the assessee as under:- Events Relevant Dates Assessment Year (‗AY') 2010-11 End of Assessment Year 31-03-2011 Due date for completion of assessment under Third Proviso 31-03-2014 to section 153(1) of the Act (i.e. 3 years from the end of AY) Time limit for passing the order under section 92CA(3A) of 60 days the Act Less: Date on which limitation expires under section 153 of 1 day the Act i.e. 31-03-2014 Less: Remaining days of March 2014 30 days Less: Number of days February 2014 28 days Less: Number of days January 2014 2 days Last date for passing the order under section 92CA(3) of the 29-01-2014 Act Date of passing the transfer-pricing order (‗TP order‘) 30-01-2014 under section 92CA(3) of the Act 12. The relevant extract of the provisions of section 92CA(3A) and section 153(1) of the Act and the third proviso as was applicable to the impugned assessment year are reproduced herein below: 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 section 144 at any time after the expiry of - (a) Two years from the end of the assessment year in which the income was first assessable, or (b) One year from the end of the financial year in which a return or a revised return relating to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, is filed under sub-section(4) or sub-section (5) of section 139, whichever is later: Provided xxxxxxxxxxx Provided further xxxxxxxxxx M/s. Tubacex Prakash India Pvt. Ltd.

Provided also that in case the assessment year in which the income was first assessable is the assessment year commencing on the 1st day of April, 2009 or any subsequent assessment year and during the course of the proceeding for the assessment of total income, a reference under sub-section(1) of section 92CA is made, the provisions of clause (a) shall, notwithstanding anything contained in the first proviso, have effect as if for the words ―two years‖ the words ―three years‖ had been substituted‖ A conjoint reading of the relevant provisions of section 92CA(3A) and 153(1) of the Act would show that the TPO is required to pass order u/s. 92CA(3) of the Act at any time before sixty days prior to the date on which the period of limitation referred to in section 153 of the Act for making assessment order expires.

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 scope for the court to take upon itself the task of amending or alternating (sic altering) the statutory provisions. Wherever the language is clear the intention of the legislature is to be gathered from the language used. While doing so, what has been said in the statute as also what has not been said has to be noted. The construction which requires for its support addition or substitution of words or which results in rejection of words has to be avoided. As stated by the Privy Council in Crawford v. Spooner [(1846) 6 Moore PC 1 : 4 MIA 179] "we cannot aid the legislature's defective phrasing of an Act, we cannot add or mend and, by construction make up deficiencies which are left there". In case of an ordinary word there should be no attempt to substitute or paraphrase of general application. Attention should be confined to what is necessary for deciding the particular case. This principle is too well settled and reference to a few decisions of this Court would suffice. (See : Gwalior Rayons Silk Mfg. (Wvg.) Co. Ltd. v. Custodian of Vested Forests [1990 Supp SCC 785 : AIR 1990 SC 1747] , Union of India v. Deoki Nandan Aggarwal [1992 Supp (1) SCC 323 : 1992 SCC (L&S) 248 : (1992) 19 ATC 219 : AIR 1992 SC 96] , Institute of Chartered Accountants of India v. Price Waterhouse [(1997) 6 SCC 312] and Harbhajan Singh v. Press Council of India [(2002) 3 SCC 722 : JT (2002) 3 SC 21] .)"

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.

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 M/s. Tubacex Prakash India Pvt. Ltd.

orders, the department cannot claim that the time limits are not mandatory. Hence, the contention raised in this regard is rejected.

The period of limitation for passing the assessment order in the instant case expires on 31/03/2014. The time limit for passing the order u/s. 92CA(3A) is sixty days prior to the date on which the limitation referred in section 153 of the Act expires. Thus, the limitation in the present case for passing the order u/s. 92CA(3) of the Act expires on 29/01/2014. The TPO passed the order u/s. 92CA(3) of the Act on 30/01/2014. Ergo, the order u/s. 92CA(3) of the Act is surely time barred by one day.

No.48 &

49. The assessee succeeds on the aforesaid legal grounds.

18. No arguments were made by ld. Counsel for the assessee in respect of original grounds of appeal / other additional grounds of appeal at this stage. Hence, they are left open for adjudication, if the need arises.

M/s. Tubacex Prakash India Pvt. Ltd.

30. Now another issue which crops up, is, whether, once the TPO order is held to be nullity or quashed on the ground of being barred by limitation, then could AO have passed the draft order treating it to be as ‗eligible assessee‘. Section 144C was brought on the statute as special scheme of assessment and to provide alternative dispute resolution scheme to certain categories of ‗eligible assessee‘. Section 144C provides that the AO has to pass and forward a draft assessment order in the case of ‗eligible assessee‘ if he proposes to make any variation which is prejudicial to the interest of such assessee, Sub-section 15 has defined ‗eligible assessee‘ for the purpose of section 144C. The relevant provisions of section 144C(1) and sub section 15 reads as under:- 144C. (1) The Assessing Officer shall, notwithstanding anything to the contrary contained in this Act, in the first instance, forward a draft of the proposed order of assessment (hereafter in this section referred to as the draft order) to the eligible assessee if he proposes to make, on or after the 1st day of October, 2009, any variation which is prejudicial to the interest of such assessee. . . . (15) For the purposes of this section,— (a)

Dispute Resolution Panel" means… "eligible assessee" means,— (b) any person in whose case the variation referred to in sub- (i) section (1) arises as a consequence of the order of the Transfer Pricing Officer passed under sub-section (3) of section 92CA; and any non-resident not being a company, or any foreign company.‖ (ii)

31.The aforesaid section envisages that, AO in the first instance has to forward a draft of the proposed order of assessment to the "eligible assessee", if he proposes to make any variation which is prejudicial to the interest of such assessee. The draft assessment order is to be forwarded to an "eligible assessee", which means that, for this section to apply a person has to be an "eligible assessee" Here, the draft assessment order is to be forwarded only to an "eligible assessee" and not to every assessee under the Act.

M/s. Tubacex Prakash India Pvt. Ltd.

32.Thus, under the aforesaid provision, the expression "eligible assessee" is followed by an expression "means" and there are two categories referred therein (i) any person in whose case the variation arises as a consequence of TPO‘s order and (ii) any NR or Foreign company. The use of the word "means" indicates that the definition "eligible assessee" for the purposes of Section 144C(15)(b) is a hard and fast definition and can only be applicable in the above two categories. Ostensibly, the expression 'eligible assessee' has a restrictive meaning as it covers only the two types of persons mentioned above.

In case of FedEx Express, the relevant portion of which has been reproduced in the foregoing paras, wherein the Tribunal has expressed the provision and finally deleted the corporate grounds also. We accordingly follow the same reasoning here in this case also. 37.Similarly, in a reverse case scenario, i.e., where a draft assessment order was required to be passed on an 'eligible assessee' as per section 144C(1) of the Act but the same was not so passed, in the following decisions as well, the entire assessment proceedings have been held to be invalid and liable to be quashed: (i) Vijay Television (P.) Ltd. v. DRP [2014] 46 taxmann.com 100/225 Taxman 35/369 ITR 113 (Madras) affirmed by the Division Bench of the Hon‘ble Madras HC in [2018] 95 taxmann.com 101 (Madras); International Air Transport Association v. Dy. CIT [2016] 68 (ii) taxmann.com 246 (Bombay); Zuari Cements Ltd. v. ACIT [Writ Petition No. 5557 of 2012, (iii) dated 21-2- 2013] (Andhra Pradesh)- Revenue‘s SLP dismissed by the Hon‘ble Apex Court in CC No. 16694/2013 on 27th September 2013

M/s. Tubacex Prakash India Pvt. Ltd.

―47. The necessity for the Parliament to incorporate Section 144-C is not only to safeguard the Revenue, but also the assessee and any mistake committed by any one of them, the said party is supposed to face the consequences and cannot put the hands of the clock back and start afresh.‖ 39. Further, in case of Zuari Cements Ltd. v. ACIT [Writ Petition No. 5557 of 2012, dated 21-2-2013] (Andhra Pradesh), the Division Bench (DB) of the Andhra Pradesh High Court categorically held that the failure to pass a draft assessment order under Section 144C (1) of the Act would result in rendering the final assessment order "without jurisdiction, null and void and unenforceable." In that case, the consequent demand notice was also set aside. The decision of the Andhra Pradesh High Court was affirmed by the Supreme Court by the dismissal of the Revenue's SLP (C) [CC No. 16694/2013] on 27th September, 2013.

M/s. Tubacex Prakash India Pvt. Ltd. 43.We find that section 153(1) of the Act, as it stood applicable for the AY 2012- 13, provided a time limit of 3 years from the end of AY 2012-13 for completion of assessment under section 143(3) of the Act, i.e., on or before 31 March 2016. 44.In such a case if the Ld. AO invokes the provisions of section 144C of the Act and passes the final assessment order after 31 January 2016 i.e. beyond the period of limitation as stated above, such final assessment order u/s 143(3) r.w.s 144C of the Act is liable to be quashed as being barred by limitation.

Order pronounced on 24/03/2023 by way of proper mentioning in the notice board.