TMI Blog2020 (7) TMI 493X X X X Extracts X X X X X X X X Extracts X X X X ..... on of impugned penalties has been set aside, thus, the penalty order would also not survive, therefore we direct the assessing officer to delete the penalty under section 271AA and 271BA, levied - Decided in favour of assessee. - ITA No.4951/Mum/2018, ITA No.4952/Mum/2018 - - - Dated:- 29-6-2020 - Shri Pawan Singh, Judicial Member And Shri S. Rifaur Rahman, Accountant Member For the Appellant : Shri Madhur Agarwal (AR) For the Respondent : Shri Akhtar H. Ansari (DR) ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. These two appeal by assessee are directed against the order ld. CIT(A)-17, Mumbai dated 27.06.2018, confirming the penalty orders passed under section 271AA and 271BA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;ITAT') for the subject assessment year is pending for adjudication. 4. (a) On the facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in upholding the impugned penalty under section 271M of the Act without appreciating that whether Kaybee Exim Pte. Ltd., Singapore ('KEPTL') and the Appellant are AEs is a debatable issue and where the Appellant follows one of the bonafide view relying on CBOT Circular and Memorandum explaining the provisions of the Finance Act 2002, the Appellant has a reasonable cause under section 273B of the Act for non maintenance of documentation as per section 920 of the Act. (b) On the facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in not app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the penalty order dated 23.03.2016 passed by the Ld. Assessing Officer ('AD') under section 271BA of the Income-tax Act, 1961 ('Act') is a valid order even when - a. The show cause notice dated 12.03.2013 issued by Ld. AO under section 274 of the Act does not specify reasons for invoking penalty proceedings under section 271 BA in the present case of Appellant and thus does not meet the mandatory jurisdictional requirement of the law 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in upholding the impugned penalty of ₹ 1,00,000/- under section 271 BA of the Act. 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) grossly erred in upholding the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc. from sources within India to Kaybee Exim Pte Limited Singapore (KEPL). Initially assessment for the year under consideration was completed under section 143(3) on 25.11.2009. Subsequently, the case was reopened under section 148, vide notice dated 30.03.2012. The assessment was completed under section 147/143(3) on 12.03.2013. The assessing officer while passing reassessment order held that the assessee is associate enterprises (AE) of KEPL and made addition/ adjustment on account of Arms Lengths Price of (ALP) of ₹ 39,66,063/- in respect of the service charge received from KEPL. The assessing officer also initiated penalty under section 271AA and 271BA. The assessing officer and levied penalty under section 271AA of ₹ 79, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oes not survive, therefore the penalty order under section 271 AA and 271BA are liable to be deleted. The ld. AR for the assessee further submits that similar penalty order for assessment year 2006-07 on similar facts were deleted by Tribunal vide order dated 28.02.2020. 5. On the other and the learned DR for the revenue after going through the order of Tribunal in quantum assessment wherein the coordinate bench of the Tribunal held that assessee is not associated enterprises of KEPL Singapore. The learned DR submits that he strongly relied upon the order of lower authorities. 6. We have considered the rival submission of the parties and have gone through the orders of lower authorities. We have also gone through the order of coordina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h is as follows: The learned CIT(A) erred, in facts and in law, in upholding that Kaybee Exim Pte Ltd Singapore (KPEPTL) is an associated enterprise (AE) of the appellant within the meanings of Section 92A 3. -------- 4. --------- 5. ------- 18. Learned representatives fairly agree that the case of the Assessing Officer hinges only on application of Section 92A(1) and it does not meet any of the specific conditions set out in Section 92A(2). Once we hold that Section 92A(1) cannot be applied on standalone basis, and has to be essentially considered in conjunction of Section 92A(2) only when it satisfies at least one of the conditions set out therein, it is clear that the relationship between the assessee company and its KE- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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