TaxTMI 
TaxTMI 
TaxTMI 
2017 (4) TMI 1186
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....nder: - 2.1 The assessee company filed its return of income for A.Y. 2011-12 on 04.09.2011 declaring NIL income. The return was processed under section 143(1) of the Act and the case was subsequently taken up for scrutiny. The assessment was completed under section 143(3) of the Act vide order dated 28.02.2014. While competing the assessment, the Assessing Officer (AO) observed that since the assessee 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 i....
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.... duly signed and verified in the prescribed manner by accountant and setting forth such particulars as may be prescribed.'' 5.5 Admittedly in this case the assessee did not comply with the requirements of the above provisions of section 92E. The main contention of the assessee's counsel herein is that the assessee was under belief that with respect to the share application money transaction and share allotment entered into by the assessee, filing the audit report as prescribed by section 92E of the Act was not required. The reason which the assessee has given herein is 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 indi....
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.... 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 assessment u/s. 143(3) or processing the return u/s. 143(1....
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....cumstances of the case provisions of section 92E were applicable to your appellant in the relevant year since your appellant has only allotted shares to an individual non-resident Indian and had not carried out any other transaction. 2.b. erred in ignoring the judgment of Hon. Bombay High Court in the case of Vodafone India Services Private Limited. Vs. ACIT (2014) 368 ITR 0001 (Bom) where in it has been held that provisions of issuance of equity shares by resident company, since neither capital receipt received by resident company nor difference in issue price of equity shares vs fair market value of equity shares can be considered as income. 2.c. erred in ignoring the fact that "An individual, Non Resident Indian" is not covered in th....
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....required by section 92E of the Act, the AO may direct that such person shall pay, by way of penalty a sum of Rs. 1,00,000/-. 3.2.2 As per the facts on record, and the relevant sections of the Act (supra), by not filing the Audit Report in Form 3CEB, the assessee has failed to comply with the requirement of the provisions of section 92E of the Act. In the light of the requirements in the provisions of section 92B and 92E of the Act (supra), the assessee's contentions that it was not required to file Audit Report in Form 3CEB, since the provisions of section 92E of the Act were not applicable as it had only received payments from aboard for share capital and share premium from its NRI Director for allotment of shares and no other internation....
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....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 prepa....