2017 (10) TMI 1591 - AT - Income Tax

Penalty u/s 271G - failure to comply with specific requisition made u/s 92D (3) - HELD THAT - As mentioned hereinbefore the AO in his assessment order dated 27.12.2012 has accepted the income declared by the assessee at ₹ 24,35,23,345/-. We also find that neither the TPO nor the AO has issued notice u/s 92D(3) to the assessee. The Co-ordinate Bench in Netsoft India Ltd. 2014 (1) TMI 286 - ITAT MUMBAI has held that penalty u/s 271G, for failures to furnish information u/s 92D, cannot be imposed unless notice is issued specifying information to be produced by person entering into an international transaction. In the instant case, we find that that no notice u/s 92D (3) has been issued by the TPO/AO. Respectfully following the judgment of Leroy Somer Controls (India) (P) Ltd 2013 (9) TMI 761 - DELHI HIGH COURT and the order of the Co-ordinate Bench in Netsoft India Ltd. (supra), we delete the penalty imposed by the AO u/s 271G. - Decided in favour of assessee.

Summary

Issues:
Appeal against penalty under Section 271G of the Income Tax Act 1961 for AY 2008-09.

Analysis:
1. The appeal was filed against the penalty imposed under Section 271G of the Income Tax Act 1961 for the assessment year 2008-09. The grounds of appeal highlighted various errors made by the Assessing Officer and the Commissioner of Income Tax (Appeals) in confirming the penalty. The appellant argued that the penalty was unjustified as the Transfer Pricing Officer had not disturbed the Arm's Length Price determined by the appellant, and the default was merely technical.

2. The facts of the case revealed that the appellant failed to furnish information or documents under Section 92D before the Transfer Pricing Officer, leading to the imposition of a penalty by the Assessing Officer. The Commissioner of Income Tax (Appeals) upheld the penalty, emphasizing the appellant's failure to comply with the requirements of Section 92D.

3. During the proceedings, the appellant's counsel argued that the Transfer Pricing Officer had considered documents submitted by the appellant's associated enterprise, Cadbury India Ltd., and did not issue a notice under Section 92D(3). Citing relevant case laws, the appellant contended that the penalty was unwarranted due to the lack of specific requisition under Section 92D(3).

4. The Tribunal examined the submissions and relevant records, noting that neither the Transfer Pricing Officer nor the Assessing Officer had issued a notice under Section 92D(3) to the appellant. Referring to legal precedents, including the judgment of the Delhi High Court and a Co-ordinate Bench decision, the Tribunal emphasized the necessity of a specific notice under Section 92D(3) before imposing a penalty under Section 271G.

5. Consequently, based on the legal principles established in the cited cases and the absence of a notice under Section 92D(3) in the present case, the Tribunal ruled in favor of the appellant. The penalty of ?48,70,467 imposed by the Assessing Officer under Section 271G was deemed unjustified and was therefore deleted.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the Tribunal's decision based on the arguments presented and legal precedents cited during the proceedings.