TaxTMI 
TaxTMI 
2017 (4) TMI 1186
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.... had entered into an international transaction receiving foreign inward remittance of Rs. 11,47,21,471/- from its Director as well as beneficial shareholder Shri Pawan Kumar Kaushik, an NRI, on account of share capital and share premium in the assessee company, it was required to file Audit Report in Form No. 3CEB in respect of the aforesaid international transactions. No adjustment/addition to the returned income was made. However, on account of the assessee's failure to file the Audit Report in Form 3CEB, the AO simultaneously initiated penalty proceedings by issue of notice under section 274 r.w.s. 271BA of the Act dated 28.02.2014. 2.2 The AO subsequently took up penalty proceedings initiated by issue of notice under section 274 r.w.s. 271BA of the Act dated 28.02.2014 and after considering the assessee's submissions, levied penalty of Rs. 1,00,000/- under section 271 BA of the Act vide order dated 27.08.2014. 2.3 Aggrieved by the order levying penalty of Rs. 1,00,000/- under section 271BA of the Act for A.Y. 2011-12, the assessee preferred an appeal before the CIT(A)-20, Mumbai, which was dismissed by the impugned order dated 10.02.2016 holding as under at paras 5.3 to 5....
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....ile a report from an Accountant setting forth the particulars of such International transactions. As per Section 271BA, in case of default of furnishing a report from an accountant as required by Section 92E, the Assessing Officer may impose penalty of a sum of Rs. 1,00,000/-. The reason given by the assessee that the provisions of section 92E were not applicable to the appellant company in the relevant year since appellant company had only allotted shares to an individual Non Resident Indian and had not carried out any other transaction is not found to be acceptable as the transactions of share investment are expressly covered in the ambit of section 92E. The failure to furnish the audit report as per the provisions of section 92E in the present case is totally attributable to the gross negligence of the assessee and there is no good and sufficient reason in not filing the audit report within the stipulated time. The assessee herein could not show any reasonable cause in not filing of the audit report in time. From this it can be inferred that the assessee has without any reasonable cause not filed the report u/s. 92E before the Assessing Officer on or before the completion of ass....
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.... any activity specified therein.. 2.d. erred in ignoring the fact that the transaction of allotment of shares is not covered in international transaction defined in explanation to section 92B." Since all the grounds raised pertain to the challenge put forth by the assessee against the impugned order, the same are being considered together for disposal of this appeal hereunder. 3.2.1 We have heard the rival contentions and perused and carefully considered the material on record, including the judicial pronouncements cited and placed reliance upon. The sections of the Act relevant to the matter before us are referred to hereunder. In the case of international transactions, as laid out in section 92B of the Act, it is mandatory for a person entering into international transaction/transactions to furnish a report from an accountant setting forth the particulars of such international transaction(s). Section 92E of the Act mandates that every person who has entered into an international transaction/transactions during a previous year shall obtain a report from an accountant and furnish such report on or before the specified date in the prescribed proforma duly signed and verifie....
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....ome. We have carefully perused the aforesaid judicial pronouncement and with great respect find that the decision therein would not come to the rescue of the assessee in the case on hand as it is factually different and does not deal with penalty under section 271BA of the Act. In the cited case Form 3CEB report was filed by the assessee and on reference by the AO the TPO made an adjustment to the ALP of issue of equity shares at a premium, which was held as untenable by the Hon'ble Court in that case. However, the facts in the case on hand are entirely different as the AO has not attempted to or made any adjustment to the ALP for issue of equity shares at a premium to its NRI Director. The issue raised by the authorities below before us is simply that since the assessee has not filed the Audit Report prepared by an accountant in the prescribed Form 3CEB within the period specified as was mandatorily warranted under section 92E of the Act, levy of penalty under section 271BA of the Act was attracted in its case. 3.2.4 From the factual and legal matrix of the details on record before us, as discussed above, we do not find any plausible reason put forth by the assessee to esta....