Transfer pricing documentation penalty deleted where delayed compliance was inadvertent and supported by reasonable cause.

Penalty for delayed furnishing of transfer pricing documentation was treated as unsustainable where the assessee later produced the remaining material, the delay was marginal, and the non-compliance was found to be inadvertent rather than deliberate. The surrounding circumstances, including change of authorised representative and subsequent compliance, supported a finding of reasonable cause. On those facts, the penalty under section 271G was deleted.

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Issues: Whether penalty levied for failure to furnish transfer pricing documentation within the prescribed time under the transfer pricing provisions was sustainable.

Analysis: The notice required production of documents for determination of arm's length price, and the assessee did not furnish the complete material within the initial period. However, the assessee subsequently filed part details and later the remaining material. The delay was considered marginal, and the surrounding circumstances, including the change of authorised representative and the later compliance, indicated that the default was neither deliberate nor mala fide. In these facts, the non-compliance was treated as inadvertent and supported by reasonable cause.

Conclusion: The penalty under section 271G of the Income-tax Act, 1961 was deleted and the assessee succeeded.

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