TMI Blog2018 (11) TMI 1943X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the above deliberation on this issue, without going into the merits of the penalty, we are of the opinion that the penalty order is liable to be quashed on this legal issue. Thus, the grounds raised by the Revenue are dismissed. - SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM For the Appellant : Shri Sanjeev Ghei For the Respondent : Shri R.D. Onkar ORDER PER D. KARUNAKARA RAO, AM: There are two appeals by the Revenue under consideration involving Assessment Years 2007-08 and 2008-09. They are filed against the common order dated 14-07-2016 passed by the CIT(A)-13, Pune. Revenue raised similar grounds in both these appeals, therefore, the said appeals are being disposed off in this composite order. We shall first take up the appeal for the A.Y. 2007-08 as the standard one for the sake of facts. ITA No.2447/PUN/2016 A.Y. 2007-08 2. Grounds raised by the Revenue are extracted as under : 1. The order of the Commissioner of Income-tax (Appeals) is contrary to law and to the facts and circumstances of the case. 2. Whether on the facts and under the circumstances of the case, the CIT(A)- 13, Pune was justified in de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ially provided Explanation -7 to section 271 that shifts the onus on the assessee to prove to the satisfaction of the Assessing Officer that the price charged or paid on international transaction in accordance with provisions contained in section 92C and in the manner prescribed under that section, in good faith and with due diligence. However, the CIT(A) erred in shifting of onus on the assessing officer to establish the absence of 'due diligence' and lack of 'good faith' on part of the assessee. 8. Whether the CIT(A)-13, Pune grossly erred in not appreciating the provisions of Explanation -7 to section 271, which unlike the cases of penalty levied on account of other additions, the Explanation- 7 provides deeming provisions in respect of addition or disallowance made u/s 92C(4) which are deemed to represent the concealed income or furnished inaccurate particulars. 9. For these and such other reasons as may be urged at the time of hearing, the order of the Commissioner of Income-tax (Appeals) may be vacated and that of the Assessing Officer be restored. 10. The appellant craves leave to add, amend, alter or delete any of the above grounds of appeal during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not survived. It is prayed that deletion of penalty be confirmed. 6. We heard both the sides and perused the orders of the Revenue and the order of Tribunal dated 31-01-2017 deleting the quantum addition on the technical issue of jurisdiction. We find it relevant to extract the finding given by the Tribunal below (Para 20 21 of the order of the Tribunal) : 20. As referred to by us in the paras hereinabove the factual aspects of the present case before us are identical to the facts before the Tribunal in Maximize Learning (P.) Ltd. vs. ACIT (supra) and hence the ratio laid down by the Co-ordinate Bench of the Tribunal squarely applicable to the facts of the case. Further, we also apply the principle laid down by the Hon'ble High Court of Delhi in CIT Vs. XL India Business Services (P) Ltd. (supra). In view thereof, we hold that when no assessment proceedings were pending in relation to the relevant assessment year, the Assessing Officer was precluded from making a reference to the TPO under section 92CA(1) of the Act for the purposes of computing the arm's length price in relation to the international transaction. Consequently, order passed by the TPO under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and legally sustainable satisfaction in the assessment order while initiating the penalty proceedings. Highlighting the legal requirement of making a specific reference to the specific limb of clause (c) of section 271(1) of the Act and relying on various binding judgments in the case CIT Vs. Shri Samson Perinchery (2017) 392 ITR 4 (Bom.) as well as the judgment of Hon ble Karnataka High Court in the case of CIT Vs. Manjunatha Cotton and Ginning Factory 359 ITR 565, Ld. Counsel demonstrated that the penalty levied by the AO is unsustainable in law. In this regard, he brought our attention to the assessment order as well as the penalty order highlighting the above legal deficiencies. Thus, Ld. Counsel prayed for confirming the order of CIT(A) deleting the penalty levied by the AO. 10. Per Contra, Ld. DR for the Revenue relied on the order of AO dutifully. 11. We heard both the parties on the said legal issue raised by the Ld. Counsel for the assessee and perused the orders of the Revenue. We proceed to adjudicate the issue relating to recording of proper satisfaction by the AO. In this connection, we perused the assessment order dated 28-02-2012 and find the satisfaction reco ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
