PR. COMMISSIONER OF INCOME TAX -CENTRAL -1 vs. SHAHI EXPORTS PRIVATE LIMITED

The Income Tax Appellate Tribunal via the impugned judgment dated 17.01.2022 has taken the position, that since clause (i) of Section 92BA of the Income Tax Act, 1961 [in short, “the Act”] was removed from the statute without any saving clause, the entire proceedings carried out by the statutory authorities qua transfer pricing would collapse. 7. We may note, that Mr Ruchir Bhatia, learned senior standing counsel, who appears on behalf of the appellant/revenue, has pointed out that the insertion of Explanation 3 via Finance Act 2022 has been made with retrospective effect to Section 40(a)(ii) of the Act. Mr Bhatia says, that the said provision has been made retrospective with effect from 01.04.2005. 8. The second issue which arises for consideration is, whether the Tribunal was correct in allowing deduction qua education cess. In this regard, Mr Bhatia says that Explanation 3 as inserted by Finance Act, 2022 which is appended to Section 40a(ii) of the Act would be relevant. 9. The third issue which arises for consideration, according to Mr Bhatia, is the deduction which has been allowed by the Tribunal under Section 80(i)(a) of the Act. The Tribunal has directed the Assessing Officer to calculate the deduction, based on the rate charged by the concerned electricity board from its consumers. 10. Insofar as the first issue is concerned, Mr Bhatia says that this issue also arises in another appeal filed by the revenue i.e., ITA 164/2023 in which notice was issued on 20.03.2023, and made returnable on 17.08.2023. 11. Accordingly, list the captioned appeal on 17.08.2023. 12. The notice issued in the application for condonation of delay will be accompanied by the order passed today.

Mr Bhatia informs us, that insofar as the judgment of the Karnataka High Court in Texport Overseas Pvt. Ltd. [ITA 352/2018] is concerned, an appeal is pending in the Supreme Court. The judgment of the Karnataka High Court was rendered on 12.12.2019. 13.1 In case there is any decision of the Supreme Court qua the said judgment, the same will be placed before us, on the next date of hearing. 14. Counsel for the parties will file their written submissions, not exceeding three pages each, at least five days before the next date of hearing.