Tribunal exempts penalties for non-uploading Form 3CEB due to unintentional failure.

The Tribunal allowed the appeal of the assessee, setting aside the penalties imposed for non-uploading of Form 3CEB electronically. The Tribunal found the failure to upload the form was unintentional and bonafide, as the assessee was unaware of the legal requirement, and no adjustments were proposed by the Transfer Pricing Officer. The Tribunal emphasized the discretionary nature of the penalty provision and exempted the penalties based on the reasonable cause shown by the assessee.

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Issues:
1. Correctness of order dated 04.05.2018 of CIT(A)-2 Ludhiana pertaining to 2014-15 assessment year.
2. Imposition of penalty for non-uploading/filing of Form 3CEB electronically.

Analysis:

Issue 1: Correctness of CIT(A) order
The appellant challenged the CIT(A) order on various grounds, including the alleged contravention of provisions of S. 250(6) of the Income Tax Act, 1961. The appellant contended that the CIT(A) erred in confirming the penalties imposed by the Ld. AO for non-uploading of Form 3CEB electronically. The appellant's representative argued that the failure to upload the form was unintentional, as it was the first year such a responsibility was imposed on the assessee. The representative cited several legal precedents to support the argument that the penalty order should be quashed due to the bonafide nature of the mistake. The Senior DR, however, supported the impugned order.

Issue 2: Imposition of penalty for non-uploading of Form 3CEB
The Tribunal noted that the assessee failed to upload Form No. 3CEB as required by Section 92E of the Income Tax Act, which mandates the filing of a report by an accountant for international transactions. The relevant penalty provision under Section 271BA allows for the imposition of a penalty of one hundred thousand rupees for failure to furnish the report. However, the Tribunal observed that the law makers used "may" instead of "shall" in the provision, indicating that the levy of penalty is discretionary, not automatic. The Tribunal further highlighted Section 273B, which exempts penalties if a reasonable cause is proven. In this case, the Tribunal found the assessee's explanation of ignorance regarding the legal requirement to be consistent and bonafide. The Tribunal also noted that no adjustments were proposed by the Transfer Pricing Officer based on the report. Consequently, the Tribunal held that the failure to upload the form was an unintentional bonafide mistake and quashed the penalty order.

In conclusion, the Tribunal allowed the appeal of the assessee, setting aside the penalties imposed for non-uploading of Form 3CEB electronically.

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