2017 (6) TMI 1410 - AT - Income Tax

Penalty u/s 271AA - assessee has not maintained the transfer pricing documentation as required u/s 10B - HELD THAT - It is not in dispute that the TPO has not made any adjustment in the transfer pricing proceedings. This Tribunal in the assessee s own case for the assessment year 2006-07 found that since no adjustment was made with regard to international transactions there cannot be any levy of penalty u/s. 271AA. Since the CIT(A) has placed reliance on the order of this Tribunal this Tribunal do not find any reason to interfere with the order of the lower authority. Accordingly the same is confirmed. Decided against revenue.

Summary

In the case before the ITAT Chennai, the Revenue appealed against the order of the Commissioner of Income Tax (Appeals)-6, Chennai, which had deleted the penalty levied by the Assessing Officer under Section 271AA of the Income Tax Act, 1961. The penalty was initially imposed due to the assessee's alleged failure to maintain transfer pricing documentation as required under Section 10B of the Act.The Departmental Representative, Ms. Jamuna, argued that the deletion of the penalty was unjustified given the non-compliance with documentation requirements. However, the assessee's representative, Shri N. Viswanathan, contended that since the Transfer Pricing Officer (TPO) had not made any adjustments after reviewing the evidence, the penalty was unwarranted. The CIT(Appeals) had relied on a previous Tribunal order in the assessee's favor for the assessment year 2006-07, where no penalty was deemed applicable due to the absence of adjustments in transfer pricing.The Tribunal, after reviewing the submissions and records, noted that the TPO did not make any adjustments in the transfer pricing proceedings. Consistent with its earlier decision in the assessee's case, the Tribunal found no basis for imposing a penalty under Section 271AA. Consequently, the Tribunal upheld the CIT(Appeals)' decision, dismissing the Revenue's appeal. The order was pronounced on 6th June 2017 in Chennai.