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TMI Blog2017 (9) TMI 1339X X X X Extracts X X X X X X X X Extracts X X X X ..... otice, the assessee filed written submissions, the contents of which are as under: a) The assessee was under the impression that separate compliance u/s.92E is not required once approval was obtained for payment of royalty. Even in the assessment proceedings, the report could not be filed due to paucity of time and as the assessee had doubts about the legal validity of the reports. Further, the transactions are disclosed in the financial reports. b) The details are available in audit report u/s 44AB. c) The assessee is paying royalty since A.Y 2004-05 and the previous officers were accepting the non-filing of report in form 3CEB. d) The relevant details were filed when called for and no adjustment is also made to ALP. Therefore, the mistake is only technical in nature and there is no revenue loss e) Reliance placed on the decision in the cases of Ravi Kumar Rawat (2011) (10 Taxmann.com 248) wherein it was held that when there is a bona fide mistake in not obtaining form 3CEB, the same will not invoke levy of penalty. Reliance is also placed on the decision of ITAT, Kolkata Bench in the case of J.J. Exports Ltd (2011) (15 Taxmann.com 348) where in it was held that when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id not consider this aspect at all. Therefore, the case is distinguishable. (h) The assessee can escape from the levy of penalty, if he can establish reasonable cause. In the present case, no such reasonable cause is established by the assessee except stating that no adjustment was made to ALP. As there is no reasonable cause on the part of the assessee and the claim is also not bona fide, the decision of ITAT in the case of Ravi Kumar Rawat is not applicable. 4.1 In view of the above observations, the AO held that this is a fit case for levy of penalty u/s 271BA and accordingly, penalty of Rs. 1,00,000/- was levied. 5. Aggrieved by the order of the AO, the assessee preferred appeal before the CIT(A) and contended before the CIT(A) that assessee being law abiding company has not defaulted on any of its obligations till now. It was submitted that the transfer pricing being emerging subject, the assessee's Finance Manager was not aware of his obligations in this regard and no proper advice had been given to the assessee to comply with the provisions of section 92E of the Act. Further, it was submitted that the assessee had tried to file the certificate during the course of assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered as reasonable cause to delete the penalty. It is clearly the obligation on the part of the assessee to comply with the provisions of section 92E. Hence, the action initiated by the AO in levying penalty u/s 271BA is proper in these cases. Accordingly, we uphold the order of the CIT(A) in confirming the penalty levied by the AO. 10.1 As the facts and issue in AY 2011-12 are materially identical to that of AY 2010-11, following the conclusions drawn therein, we uphold the order of CIT(A) and dismiss the grounds raised by the assessee. 11. In the result, both the appeals under consideration are dismissed. ITA Nos. 738 & 739/Hyd/2016 for AYs 2010-11 & 2011-12 12. As the issue in both the appeals are common, which is pertaining to levy of penalty u/s 271G, we refer to the facts from AY 2010-11. 13. During the scrutiny proceedings for AY 2010-11, the assessee was required to file the TP study maintained u/s 92D(3) r/w rule 10D. Accordingly, a request was made by the AO to this effect and the assessee filed its report on 12/02/2013. On verification of the same, the AO noticed that it does not comply with the requirements laid down under Rule 10D and, hence, penalty proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is default or not. In this case even 3CEB report was not filed. It is quite unlikely that the Department would have noticed that there are international transactions because 3CEB report is the only source from which the Department would get to know the same. On account of further default of the assessee in filing an improper TP study, the Department was further deprived. The argument that no data is available in public domain is not acceptable. In fact the requirements under the Act are placed on the assessee for the very reason that it was obligatory on the part of the assessee to search for such data. (e) When the assessee claims that he is following CUP method, it is incumbent on him to show the comparables. The assessee did not show a single comparable. It may also be mentioned here that the undersigned was seriously constrained in determination of ALP on account of the fact that an improper and incomplete study was filed by the assessee. (f) This is not a case where full details are filed to enable the Assessing Officer to determine ALP nor there is issue of delay in filing. Hence, the case laws cited are not applicable. 14.1 In light of the above observations, the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd, ld. AR relied on the following cases: 1. Annapurna Business Solutions v. Assistant Commissioner of Income-tax, Circle 6(1) [2012] 17 taxmann.com 125 (Hyd.) In this case, it was held that where assessee entered into international transaction with its associated enterprises and furnished all particulars on basis of which Assessing Officer could determine arm's length price of said transaction, no penalty could be levied under section 271G for nonfurnishing of information which was not in public domain. 2. DCIT Vs Magic woods Exports (P) Ltd 25 Taxmann.com 20 (Chennai) (2012) In this case, it was held that where delay in filing details of international transaction was reasonable and, moreover, TPO had not suggested any adjustment in ALP reported by assessee, penalty under section 271G was not to be levied. 3. ITO VS, Netsoft India Ltd [2013] 35 taxmann.com 579 (Mumbai Trlb.) In this case, It was held that Penalty under section 271G, for failure to furnish Information under section 92D, cannot be imposed unless notice Is issued specifying information to be produced by person entering into an International transaction. 18. Ld. DR relied on the orders of revenue authoritie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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