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TMI Blog2025 (1) TMI 454X X X X Extracts X X X X X X X X Extracts X X X X ..... 15 declaring total loss at Rs. 11,69,32,126/- along with the Transfer Pricing Audit Report in Form 3CEB, Tax Audit Report in Form 3CACD and Form 29B. For the relevant AY, the assessee declared international transactions /specified domestic transactions (as reported in Form 3CEB) totaling to Rs. 50,26,69,753/-. The case was selected for scrutiny. The Ld. Assessing Officer ("AO") referred the case to the Ld. TPO to determine the arms length price of international transactions /specified domestic transactions entered into by the assessee with its associated enterprises for the relevant AY 2015-16. The Ld. TPO issued notice dated 27.12.2017 asking the assessee to furnish the details requested therein followed by a second notice issued on 01.08.2018, to which the assessee duly responded by appearing before the Ld. TPO and making oral/written submissions thereof. Thereafter, the Ld. TPO issued another letter on 09.10.2018 for initiation of penalty proceedings u/s 271G of the Act which was without penalty notice enclosed therein. The assessee vide its letter dated 12.10.2018 requested the Ld. TPO to fix the hearing on 20.10.2018. In the meantime, the Ld. TPO issued a show cause notice on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermining the prices. 3 Purchase of Capital Asset 2,491,597 Arm's Length Valuation as accepted by Customs department. 4 Availing of technical service for installation 16,745,596 Agreement with AE. 5 Interest of ECB Loan 148,892,566 Master Circular of Reserve Bank of India on External Commercial Borrowings and Trade Credits. Specified Domestic Transaction 6 Receipt of Professional Fees 1,617,984 As per agreement 7 Purchase of Capital Asset 58,109,906 Quotations of third parties obtained while determining the prices. 8 Salary & Commission paid 9,577,349 5,611,968 As per Agreement and to the extent permissible under section 197 of the companies Act. Total 5026697530 2.4 Later on the case got assigned to JCIT (TP)-2, Pune on 30.07.2018. Due to change in the incumbency, the new TPO issued a fresh notice of opportunity u/s 92CA(2) on 01.08.2018 posting the hearing on 10.08.20218. There is no record of any other notice by the new TPO identifying the shortcomings in the Transfer-prieing documentation for two months. After two months, the TPO has issued two letters, one le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be levied u/s 271G. In the Instant case TPO had not issued specific requisition u/s 92D(3) for furnishing of specific particulars, then no question of its remaining uncomplied with arose. Accordingly penalty cannot be imposed u/s 271G. Reliance is placed upon following case laws: 1. CIT-II vs Leroy Somer & Controls(India) (P) Itd (2014) 360 ITR 532( Delhi High Court) 2. ACIT vs Nikko Resources Ltd - ITAT D Bench Ahmedabad (2013) 36 CH 0285 3. P&G Hygiene and Health Care Limited vs DCIT-ITAT Mumbai Bench (2020) 59 CCH 0311. 2.6 Following such judicial precedents, it is held that the TPO has not asked for specific information/oa in a statu.ory notice u/s 92D(3). As specific defeat is not pointed out in the submissions of documents, penalty u/s 271G cannot be levied. The TPO has also not given adequate opportunity for presenting the case to the appellant with the results appeal is allowed." 4. The Revenue is aggrieved by the order of the Ld. CIT(A) and is in appeal before the Tribunal by raising the following grounds of appeal :- "1. On facts and circumstances of the case and in law, the Id.CIT(A) erred in deleting the penalty of Rs. 1,00,53,395/-levied by AO u/s 271G of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ite details. However, the Ld. TPO passed the penalty order on 18.10.2018 before the assessee could furnish its reply that was due to be filed on or before 22.10.2018. He, therefore submitted that there was gross violation of natural justice by the Ld. TPO. The Ld. AR further submitted that the assessment order u/s 143(3) r.w.s. 144C(13) of the Act dated 31.10.2019 has been quashed and set aside by the Hon'ble Bombay High Court vide order dated 12.09.2023 in Writ Petition No. 2387 Of 2020 filed by the assessee challenging the validity of the assessment order. Therefore the impugned penalty proceedings and the penalty order u/s 271G of the Act does not survive now. 7. We have heard the Ld. Representatives of the parties and perused the records. The facts are not in dispute. The Revenue is aggrieved by the findings of the Ld. CIT(A) who in his appellate order observed that in the present case penalty u/s 271G of the Act cannot be levied because the Ld. TPO had not asked for specific information/data in statutory notice u/s 92D(3) and that it is not the case where the documents were not furnished at all by the assessee and that there was a reasonable cause for delay in furnishing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der is attached herewith. An opportunity of personal hearing may kindly be given to represent the case. Based on the above facts and legal position, your honor is requested to cancel the penalty and declare the order as bad in law." 8. We have perused the order of the Hon'ble Bombay High Court in the case of Undercarriage and Tractor Parts (P.) Ltd. Vs. Dispute Resolution Panel in Writ Petition No. 2387 Of 2020 dated 12.09.2023 reported in (2023) 156 taxmann.com 79 (Bombay) wherein the assessee challenged the validity of the assessment order passed u/s 143(3) r.w.s. 144C(13) of the Act dated 31.10.2019 and the Hon'ble Bombay High Court quashed and set aside the directions issued by the Ld. DRP on 16.09.2019 and consequent assessment order dated 31.10.2019. However, the Ld. CIT(A) has failed to take cognizance of the said decision of the Hon'ble Bombay High Court while allowing the penalty appeal of the assessee. Before us, the Revenue has not brought on record any decision of the Higher Forum against the said decision of the Hon'ble Bombay High Court (supra). 9. For the reasons set out above and on the facts and in the circumstances of the case and in the light of the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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