Reference made to TPO u/s 92CA of IT Act due to Omission of Law without Saving Clause for Pending Proceedings: ITAT quashes Order [Read Order]

The Jaipur bench of the Income Tax Appellate Tribunal (ITAT) held that the reference made to the Transfer Pricing Officer (TPO) under section 92CA of the Income Tax Act, 1961 due to omission of law without a saving clause for pending proceedings was invalid.

Worship Infraprojects Pvt. Ltd, the appellant assessee formed as a joint venture company of Om Metals Infra Projects Ltd. and Subhash Projects & Marketing Ltd, now known as SPML Infraprojects Ltd. The assessee appealed against the order passed by the commissioner for confirming the action of the assessing officer to refer the matter to TPO by invoking section 92CA of the Income Tax Act, 1961.

Vijay Goyal and Gulshan Agarwal, the counsels for the assessee contended that based on various decisions the reference to the TPO in respect of specified domestic transactions mentioned in clause (i) of section 92BA of Income Tax Act,1961was not valid as the said provision was omitted since inception.

A.K. Bhardwaj and James Kurian, the counsels for the revenue strongly opposed the contentions made by the assessee and submitted that the reference made to the Transfer pricing officer was according to the provision of law under section 92CA of the Income Tax Act, 1961.

The bench observed that once a particular provision of a section was omitted from the statute, it shall be deemed to be omitted from its inception unless and until there was some saving clause or provision to make it clear that action taken or proceeding initiated under that provision or section would continue and would not be left on account of omission.

The two-member bench comprising of Sandeep Gosain (Judicial) and Rathod Kamlesh Jayantbhai (Accountant) held that the reference made to TPO under section 92CA of Income Tax Act,1961 was invalid and bad in law and hence consequential order passed by the transfer pricing officer and assessing officer was also not sustainable in the eyes of law and are liable to be quashed while allowing the appeal filed by the assessee.

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