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TMI Blog2021 (8) TMI 663X X X X Extracts X X X X X X X X Extracts X X X X ..... finding recorded by the Assessing Officer that the conduct of the assessee lacks bonafide or there was supine indifference on the part of the assessee in not producing the records called for by the TPO, despite notice and despite fixing time frame and not furnishing all the details was on account of inaction leading to failure on the part of the assessee to invoke Section 271G of the Act. - Decided against revenue. Therefore, we are of the view that on facts, the Tribunal rightly held in favour of the assessee by affirming the order passed by the CIT(A). - Decided against revenue. - T.C.A.No.776 of 2014 - - - Dated:- 5-8-2021 - Honourable Mr.Justice T.S.Sivagnanam And Honourable Mr.Justice Sathi Kumar Sukumara Kurup For the App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on the ground that the assessee-company did not comply with the letter issued by the TPO requiring the assessee to furnish information in terms of Section 92D and Section 92E of the Act and proceeded to levy penalty at 2% of the value of international transaction. 4.The assessee filed appeal before the Commissioner of Income Tax (Appeals)-V, Chennai (for brevity the CIT(A) ), who by order dated 19.01.2011, allowed the appeal. Aggrieved by the same, the Revenue preferred appeal before the Tribunal, which was dismissed. Challenging the said order, the Revenue is before us raising the aforementioned substantial question of law for consideration. 5.We have elaborately heard Mr.J.Narayanaswamy, learned Senior Standing Counsel appearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay direct that such person shall pay, by way of penalty, a sum equal to two per cent of the value of the international transaction or specified domestic transaction for each such failure. Thus, to invoke the power under Section 271G, the authority, viz., the Assessing Officer or the TPO or the Commissioner (Appeals) has to render a finding that the assessee has failed to furnish information called for under Section 92D(3) of the Act. 9.The TPO, during the course of the proceedings before him, sent a communication dated 25.11.2008 along with a questionnaire informing the assessee that his case has been referred to him under Section 92CA and the assessee was requested to furnish certain information in terms of Section 92D and Section 92E o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of 16 documents/items, which the assessee was called upon to comply by the TPO, 12 of them have been complied by the assessee. Above all, the TPO was satisfied that whatever documents, which were called for, were produced by the assessee at a later point of time and ordered that no addition is required to be made. The explanation given by the assessee dated 15.12.2009 is by stating that the company had no experience relating to transfer pricing regulations, as it was the first transaction, which was referred to the TPO. 11.We are not convinced with the said explanation for more than one reason. Firstly, the assessee is a Public Limited Company. Secondly, it is a joint venture company between a UK Company and an Indian Company and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld to be an unreasonable act, but can be considered as a reasonable act of an organization acting with prudence under normal circumstances without negligence or inaction or want of bonafides. There is no finding recorded by the Assessing Officer that the conduct of the assessee lacks bonafide or there was supine indifference on the part of the assessee in not producing the records called for by the TPO, despite notice and despite fixing time frame and not furnishing all the details was on account of inaction leading to failure on the part of the assessee to invoke Section 271G of the Act. Therefore, we are of the view that on facts, the Tribunal rightly held in favour of the assessee by affirming the order passed by the CIT(A). 13.Mr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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