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2021 (7) TMI 208 - AT - Income TaxPenalty u/s. 271G - non-compliance of sec.92D read with Rule 10D(1) - time period allowed to the assessee for furnishing of the requisite details - assessee failing to note that under TNMM adopted by the assessee, the profit of the international transaction has to be furnished, whereas the assessee has only furnished the entity level margins which consists of overall profits on AE and significant non-AE transactions - HELD THAT:- The last date for filing of the documents/information as were called for by the TPO lapsed on 30.10.2016. As such, the ‘SCN’ Dated 31.10.2016 was subsequent to the lapse of the time period that was allowed by the TPO for furnishing of the requisite information/documents by the assessee. CIT(A) had misconceived the factual position, and observed, that as the time period allowed to the assessee for furnishing of the requisite details as were called for by the TPO u/s 92D(3) had not expired on the date on which the SCN u/s 271G was issued i.e on 31.10.2016, therefore, the penalty could not have been validly imposed. As the SCN, dated 31.10.2016 was issued by the TPO after the lapse of the time period that was allowed for furnishing of the requisite information/documents that were called for by him vide his aforementioned notices issued u/s 92D(3), therefore, no infirmity does arise therefrom. We thus, not being able to concur with the aforesaid view so arrived at by the CIT(A) therein vacate the same. Penalty u/s 271G - Considering the peculiar nature of the assessee’s business of manufacturing and export of cut & polished diamonds, no penalty u/s 271G could have validly been imposed - the issue is squarely covered by the orders of M/S D. NAVINCHANDRA GEMS PVT. LTD., M/S AKSHAR IMPEX PVT. LTD. AND M/S DHANERA DIAMONDS [2017 (11) TMI 1307 - ITAT MUMBAI] wherein it has been held that no penalty u/s 271G considering the nature of the business of manufacturing and export of cut & polished diamonds could validly be imposed - Thus Tribunal after exhaustively deliberating on the nature of the business of the assessee before them, viz. manufacturing of diamonds, had concluded that penalty u/s 271G could not have been imposed on the assessee the aforesaid order of the Tribunal had thereafter been approved by the Hon’ble High Court of Gujarat [2018 (7) TMI 2099 - GUJARAT HIGH COURT] - Decided against revenue.
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