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2012 (10) TMI 205 - AT - Income TaxLevy of Penalty u/s 271G - Question of determination of arm’s length price - Penalty equal to 2% of the value of international transaction i.e. worth Rs. 43,16,682/ - has been imposed on the assessee - Held that:- No Penalty can be imposed in a case where the assessee proves that there was reasonable cause for a particular failure - in favour of assessee. The penalty prescribed under section 271G is very severe. - When the penalty provision is very severe, it should be applied with great caution and only if circumstances sufficiently justify invoking the penal provision.
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