2016 (3) TMI 729 - AT - Income Tax

Penalty u/s 271AA - delay in filing the information u/s.92CD within 30 days - Held that - TPO has not made upward adjustment of Arms Length price in order u/sec 92CA of the Act and the same was brought on record by the Assessing Officer in the assessment order r u/s.143(3) r.w.s 144(c) of the Act. We are of the opinion that reasons specified by the assessee in not filing the said information u/s.92CD within 30 days looks genuine considering the technicalities of Transfer Pricing as the Auditor has to explain and clarify on international transaction to the Assessing Officer. The factual evidence referred in paper book in respect of marriage of ld. Authorised Representative son s and the Assessing Officer has rejected the adjournment petition filed stating the reasons which is not a good practice as the Child s marriage is a very important occasion in parents life time. The assessee company made an application alongwith details of international transaction and filed the information on record with Assessing Officer We considering the apparent facts evidence provisions of law and the genuine grounds for delay in filing the information and also no upward revision of Arms Length Price by the TPO and the supporting decision, direct the Assessing Officer to delete the penalty. - Decided in favour of assessee

Summary

Issues:
Penalty under Sec.271AA of the Income Tax Act for delay in submission of information regarding international transactions.

Analysis:
The appeal was against the order of the Commissioner of Income-tax (Appeals) confirming the penalty under Sec.271AA for delay in submitting information related to international transactions. The assessee argued that the delay was due to genuine reasons, such as the authorized representative being occupied with his son's marriage. The Assessing Officer imposed a penalty of 2% of the value of the international transaction. The assessee contended that the penalty was unjustified as they had filed the required information albeit with a slight delay.

In the appellate proceedings, the authorized representative reiterated that the delay was reasonable and due to genuine causes. The Commissioner of Income Tax (Appeals) upheld the penalty, stating that the information was furnished after the specified period. The authorized representative argued that the penalty under Sec.271AA was not applicable as the details were eventually provided. The assessee also highlighted compliance with Transfer Pricing Officer's directions and questioned the invocation of Sec.271AA in this scenario.

Before the Tribunal, the authorized representative emphasized that the penalty should be under Sec.271G, not Sec.271AA, as there was no failure to maintain documents, only a delay in submission. The Tribunal noted that the TPO did not recommend any revision in the value of international transactions, which supported the assessee's case. Considering the genuine reasons for the delay, lack of revision in the Arms Length Price, and relevant legal provisions, the Tribunal directed the Assessing Officer to delete the penalty. The Tribunal also cited a Co-ordinate Bench decision to support its ruling.

In conclusion, the Tribunal allowed the appeal, emphasizing the genuine grounds for the delay and the lack of revision in the Arms Length Price. The decision was based on the main ground raised by the assessee, leading to the deletion of the penalty under Sec.271AA.