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TMI Blog2013 (9) TMI 761X X X X Extracts X X X X X X X X Extracts X X X X ..... ing penalty the Revenue must first mention the document and information, which was required to be furnished but was not furnished by the assessee within the specified time. The documentation or information should be one specified in Rule 10D, which has been formulated in terms of Section 92D(1) of the Act – Appeal of the Department is misconceived – Decided against the Revenue. - Income Tax Appeal No. 410/2012 - - - Dated:- 30-8-2013 - Sanjiv Khanna And Sanjeev Sachdeva,JJ. For the Appellant : Mr. Kamal Sawhney, Sr. Standing Counsel. For the Respondent : Mr. Kaanan Kapoor, Advocate. ORDER Sanjiv Khanna, J. Commissioner of Income Tax, Delhi-II in this appeal under Section 260A of the Income Tax Act, 1961 (Act, for short), submits that the tribunal was wrong in affirming the order of the Commissioner of Income Tax (Appeals) deleting penalty of Rs.22,20,100/- imposed under Section 271G of the Act by the Assessing Officer. 2. Tribunal has given two reasons for dismissing the appeal of the Revenue and upholding deletion of penalty under Section 271G. It has recorded that the penalty under the said Section can be imposed only if there is failure to furnish inform ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given is that the reply of the assessee was not acceptable and default under Section 271G has been established beyond doubt. The Assessing Officer mentions that the assessee had failed to file Rule 10D documents within the time specified, i.e., thirty days. 5. Commissioner of Income Tax (Appeals) deleted the penalty observing that the Assessing Officer has not explained the grievance as to filing of documents and the TPO has not mentioned any grievance in his order relating to filing of document, i.e., delay in filing documents. 6. Section 271G of the Act prior to amendment by Act 23 of 2012 was as under:- 271G. If any person who has entered into an international transaction 71[or specified domestic transaction] fails to furnish any such information or document as required by sub-section (3) of section 92D, the Assessing Officer or the Commissioner (Appeals) may direct that such person shall pay, by way of penalty, a sum equal to two per cent of the value of the international transaction for each such failure.] 7. Section 92-D prior to its amendment by Act 23 of 2012 reads:- 92-D.Maintenance and keeping of information and document by persons entering into an internati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the said documentation or information, penalty can be imposed under Section 271G of the Act. Order under Section 271G passed by the Assessing Officer in the present case merely records that there was failure to file Rule 10D documentation without specifying or stating which document or information was not furnished in spite of notice calling for the said information or document under Section 92D(3). In the absence of the said basic details or facts, the order of penalty under Section 271G cannot be sustained. 10. We have also examined Rule 10D. Rule 10D(1) is as follows:- 10D. (1) Every person who has entered into an international transaction shall keep and maintain the following information and documents, namely:- (a) a description of the ownership structure of the assessee enterprise with details of shares or other ownership interest held therein by other enterprises; (b) a profile of the multinational group of which the assessee enterprise is a part along with the name, address, legal status and country of tax residence of each of the enterprises comprised in the group with whom international transactions have been entered into by the assessee, and ownership linka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th prices determined under these rules and consequent adjustment made to the total income for tax purposes; (m) any other information, data or document, including information or data relating to the associated enterprise, which may be relevant for determination of the arm s length price. 11. Rule 10D(1) consists of clauses (a) to (m). Clause (m) states any other information, data or document, including information or data relating to the associated enterprises, which may be relevant for determination of arm s length price. A bare perusal of sub-clauses (a) to (m) would indicate that some of the information and details pertain to the assessee and the associated enterprise, their ownership, structure, address, name, broad description of business etc. The assessees are also required to maintain details like, nature and terms of international transaction, property or services provided and quantum and value of each transaction etc. However, some of the clauses are very broad and wide like clause (m) mentioned above. These clauses relate to record of economic and market analysis, forecasts, budget and other financial estimates prepared by an assessee, record of uncontrolled transact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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