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2014 (5) TMI 991 - AT - Income TaxDeletion of penalty u/s 271(1)(c) of the Act Transfer pricing adjustment Failure to disclose true income - Held that - The quantum proceedings had been restored the issue to the file of AO for reconsideration - the AO is directed to delete the penalty - the AO will be at liberty to initiate penalty proceedings after passing a fresh assessment in accordance with law Decided against Revenue.
Issues:
- Appeal against penalty deletion under section 271(1)(c) for AY 2003-04. - Appeal against penalty deletion under section 271(1)(c) for AY 2004-05. Analysis: 1. Appeal for AY 2003-04: - The Revenue appealed against the deletion of penalty under section 271(1)(c) for AY 2003-04. - The penalty was levied based on additions made due to the rejection of deduction claim under section 80HHC and transfer pricing adjustments. - The ITAT "A" Bench Ahmedabad had set aside these issues for reconsideration by the Assessing Officer. - The Tribunal directed the AO to delete the penalty amounting to Rs. 15,54,614 due to the restoration of the issue for fresh assessment. - The AO was permitted to initiate penalty proceedings after conducting a new assessment in compliance with the law. - The Tribunal dismissed the Revenue's appeal for AY 2003-04. 2. Appeal for AY 2004-05: - The Revenue challenged the deletion of penalty under section 271(1)(c) for AY 2004-05 related to royalty payment adjustments of AY 2003-04. - The facts were similar to the AY 2003-04 appeal where the Revenue's appeal was dismissed. - As there were no changes in the facts and circumstances, the Tribunal dismissed the Revenue's appeal for AY 2004-05. - Both appeals of the Revenue were ultimately dismissed by the Tribunal. In summary, the Tribunal upheld the deletion of penalties under section 271(1)(c) for both AY 2003-04 and AY 2004-05 due to issues related to deduction claims and transfer pricing adjustments. The Tribunal directed the Assessing Officer to delete the penalties for AY 2003-04 and dismissed the Revenue's appeals for both assessment years.
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