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Worlds Window Impex (India) Pvt. Ltd. Versus ACIT, Central Circle-6 New Delhi

Penalty u/s 271G - Penalty for failure to furnish information or document under section 92D - Held that:- Substantial compliance before the order of the Ld. TPO and failure of the revenue to point out specifically which information was not provided by Assessee in time and most importantly based on the documentation provided by the Assessee no adjustment is proposed by the TPO and further the penalty is levied for non-furnishing’ TP Study Report’which is not a specified document under Rule 10D in .....

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elhi for the Assessment Year 2009-10 confirming the penalty u/s 271G of the Act of ₹ 28500100/- levied by ld AO vide order dated 25th March 2013. 2. The assessee has raised the following grounds of appeal:- 1. That the order passed by learned CIT(Appeal) confirming penalty of ₹ 28500100/-imposed by the assessing officer under Section 271G of the Income Tax Act, 1961 is bad in law. 2. That the learned CIT(Appeals) erred on facts and in law in upholding penalty imposed by the assessing .....

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cancelled. 3. The brief facts of the case is that the assesse is a private limited company filed its return of income on 30th September 2009 declaring total income of ₹ 5,09,20,284/-. The case of the assessee was referred to the ld Transfer Pricing Officer in respect of international transactions for determination of Arms s length pricing. Ld. TPO passed an order u/s 92CA (3) of the Income Tax Act on 30.01.2013 wherein no adverse inference were drawn with respect to international transacti .....

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the ld. TPO within prescribed time limit of 30 days and remaining details were submitted within extended period of 60 days. Therefore, it was contended that assessee has submitted complete details before finalization of assessment order and hence no penalty shall be levied. However, ld AO rejected the contention of the assessee and held that TP study report was not furnished in time even after repeated requests and substantial compliance not made within prescribed time with the TP proceedings d .....

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time. It was further mentioned that permission for extension of time was also sought only after receipt of show cause notice for penalty. He observed that no doubt in the present case the transactions are at Arm s length but the purpose of penalty is to ensure timely compliance of the substantive provisions of the law in which assessee has failed. 4. Aggrieved by the order of the ld CIT(A) assesse has preferred appeal before us. 5. Ld AR of the appellant submitted that i. That there is no speci .....

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the record. Therefore these observation of the ld. TPO clearly shows that assesse has complied so far as submission of details is concerned with the utmost satisfaction of ld. TPO. Further no adjustment in the determination of ALP also supports the view of the assessee. iii. that in AY 2005-06 on similar facts and circumstances and having similar transactions no penalty u/s 271G was initiated or levied. iv. As the complete details were provided by the assesse merely non furnishing of the TP Stud .....

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in submission of assessee that the TP study report is not a specified document under Rule 10D. vii. He further relied on Circular No.12 dated 23th August 2001 of CBDT as well as plethora of judgments 6. ld DR relied on the orders of the lower authorities vehemently argued that the assessee has not submitted the details within specified time limit, the penalty has been rightly levied by the AO and confirmed by ld CIT(A). 7. We have carefully considered the rival contentions. According to the prov .....

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days. If any person fails to furnish such information or documents to the AO/TPO then AO may direct that such person shall pay by way of penalty @2% of the value of international transactionsas per provisions of Section 271G of the act.As per section 273B of the act it is further provided that no such penalty shall be levied if assessee proves that such failure was because of reasonable cause. In the light of these provisions the default committed by the assesse if any is required to be examine .....

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visions of Rule 10D(1) prescribes information from Sl. No.(a) to (m) required to be kept and maintained by the assessee with respect to its international transactions. Ld. TPO issued letter dated 25.10.2011 asking various information most of which are referred in Rule 10D(1). In response to this assessee submitted some information vide letter25.11.2011 and some information explanation vide letter 30.12.2011. balance information were also provided by letter dated 16th January 2012. During the cou .....

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not find that for which documentation the ld. TPO is proposing penalty u/s 271G of the Act. It is also pertinent to note that after examination of all details the international entered into by the assessee are found to be at Arm s length by ld. TPO.But the penalty is being levied on the assessee on account of non-furnishing of TP Study Report in time. On reading of Rule 10D we do not find any such nomenclature of information contained in that Rule. However, it is also a matter of common knowled .....

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submitted all the details by 30th December 2011. Assessee has also sought extension of time by further 30 days vide letter dated 20.12.2011. It is not case of ld AO that assesse has not submitted the required information before that date. Merely because the assesse has not sought extension of time earlier the penalty u/s 271G cannot be imposed upon the assessee. Before us the ld AR relied on the decision of Hon ble Delhi High Court in case CIT Vs. Jonson Mathey India Pvt. Ltd. 54 Taxmann.com 40 .....

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ra No.6 has held as under:- 6. What is clearly discernable from the penalty order is that reference was not made to any particular or specific date by which assessee was required to submit the documents; or whether the same were furnished within 30 days or within the extended period of 30 days thereafter. Penalty under Section 271G cannot be imposed in this manner. A specific finding should be recorded on the date by which the assessee was required to furnish documents and whether documents were .....

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tc. There was no mandate or affirmative direction that penalty shall be imposed by the Assessing Officer, as has been observed in the first part at the penalty order. 9. Similarly in the case of the Assessee there is no specific finding about by which date Assessee was required to furnish the information and whether such documents are furnished or not and whether any extension of time was granted by TPO or not. Identically this information is also not in the order of ld. TPO or AO. Similarly Hon .....

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The Tribunal has rightly concluded that with such a broad rule, which requires documentation and information voluminous and virtually unlimited, section 271G has to be interpreted reasonably and in a rational manner. Information or documentation, which is assessee specific or specific to the associated enterprises, should be readily available, whereas other documentation or information relates to data bases or transactions entered into by third parties may require collation/collection from time .....

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