2020 (12) TMI 732 - AT - Income Tax

Rectification of mistake - Penalty order u/s 271AA - company in Form No. 3CEB (Report from an accountant to be furnished u/s 92E relating to international transactions) has not disclosed these transactions, which it was required to disclose as per item no. 12 of the report - HELD THAT - In penalty order u/s 271AA, the Assessing Officer specifically held that the information and documents required to be kept and maintained were not available with the assessee during the assessment proceedings and assessee kept on relying on the TP study of its Indian subsidiary, a separate legal entity. If the assessee as per the mandate of Section 92C would have maintained its own documents relating to the TP adjustment, the AO would have properly been able to determine ALP of the international transactions. But these facts were totally ignored by the CIT(A) and was not contested or disputed by the Assessee during the hearing before us in main appeal. Form 3CEB is to be furnished according to the provisions of Section 92E and for the documents maintained under Section 92D are different. Thus, the mere submission of Form 3CEB with accountant s report will not be treated as documents submitted under Section 92D - As regards the case laws, the same were considered at the time of deciding the appeal, but the arguing counsel for the assessee at the time hearing of the main appeal has not categorically pointed out the supporting factual aspects to the present assessee s case and to those cited case laws. In fact, all the case laws are on different factual aspect wherein the requisite documents were filed by those assesses, but that is not the case in present assessee. In case of Bebo Technologies 2013 (8) TMI 997 - ITAT CHANDIGARH Tribunal deleted the penalty on the ground that show cause notice was not issued before passing the order under Section 271AA -Thus, at this juncture, the Ld. AR is seeking review of the order dated 13.10.2020 by the Tribunal without pointing out any mistake apparent on record as per Section 254 and therefore, the same is not permissible under the provisions of Income Tax Act A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long-drawn process of reasoning on points which were not emerging from the original facts of the case. Thus, the assessee in the present Misc. Applications is seeking review of its own order by the Tribunal which is not permissible in law and hence dismissed.

Summary

Issues:
1. Penalty under section 271AA of the Income-tax Act, 1961.
2. Mistakes apparent in the Tribunal's order.
3. Requirement of specific documents for international transactions.
4. Review of Tribunal's order.

Analysis:
1. Penalty under section 271AA:
The issue revolved around the imposition of penalty under section 271AA of the Income-tax Act, 1961 by the Assessing Officer (AO). The Commissioner of Income Tax (Appeals) had deleted the penalty after considering the international transactions between the non-resident company and its Associated Enterprise in India. The Tribunal, however, sustained the penalty, leading to the filing of Miscellaneous Applications by the assessee.

2. Mistakes apparent in the Tribunal's order:
The applicant raised concerns regarding mistakes in the Tribunal's order. The applicant's counsel argued that certain facts stated in the order were not relevant to the case and requested a recall of the order for rehearing. The mistakes included the Tribunal drawing an adverse inference against the applicant based on the requirement to maintain separate TP documents and the failure to consider specific contentions regarding the maintenance of documents.

3. Requirement of specific documents for international transactions:
The Tribunal's order highlighted the necessity of maintaining separate TP documents as per Section 92D of the Act. The applicant had obtained an independent accountant's report in the prescribed format (Form 3CEB) for international transactions. However, the Tribunal raised concerns about the failure to submit specific documents required under Section 92D, leading to an adverse inference against the applicant.

4. Review of Tribunal's order:
During the hearing, the Tribunal dismissed the applicant's request for a review of its own order dated October 13, 2020. The Tribunal emphasized that seeking a review without pointing out a mistake apparent on record was impermissible under the provisions of the Income Tax Act, 1961. The Tribunal concluded that the applicant was attempting to review its own order without valid grounds, leading to the dismissal of the Miscellaneous Applications.

In conclusion, the Tribunal dismissed the Miscellaneous Applications filed by the assessee, upholding the imposition of the penalty under section 271AA and rejecting the plea for a review of the Tribunal's order. The judgment emphasized the importance of maintaining specific documents for international transactions and highlighted the limitations on seeking a review without valid grounds under the Income Tax Act, 1961.