TaxTMI 
TaxTMI 
TaxTMI 
2019 (11) TMI 1136
X X X X Extracts X X X X
X X X X Extracts X X X X
....of Section 92D(3) of the Act. 2. That on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in disregarding the reasonable cause of the failure by the appellant to comply with provisions of Section 92D(3) of the Act and not appreciating the provisions of Section 273B of the Act. 3. That on the facts and circumstances of the case and in law, the Ld. CIT(A) ought to have appreciated that the appellant had duly submitted the documents or information as required by sub-section (3) of Section 92D of the Act as well as appellant had submitted necessary back-up documentary evidences I information I explanations to support arm's length pricing (ALP) of the international transactions prior to completion of Transfer Pricing assessment, thus alleged default, if any, is merely technical for which no penalty could be levied under section 271G of Act on facts of the case. 4. That on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in disregarding the limitation period provided under Section 275 of the Act for the orders under the section covered by Chapter XXI of the Act. 4.1. That on the facts and circumstances of the case and in law, th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....under section 92CA(2) and 92D(3) of the Act. However, the assessee has finally filed the requisite documents on 10.09.2014. 5. Ld. TPO / AO initiated the penalty proceedings. AO, after declining the contentions raised by the assessee, levied the penalty of Rs. 1,73,47,910/- i.e. equal to 2% of the international transactions under section 92D(3) of the Act on the ground that assessee has failed to substantiate the reasons for its noncompliance of the notice issued under section 92CA(2) & 92D(3) for over a period of one year. Ld. CIT (A) affirmed the penalty levied by the AO. 6. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeal. 7. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 8. Undisputedly. Ld. TPO passed the order under section 92A(3) making an adjustment of Rs. 5,60,22,884/-. It is also not in dispute that notice dated 16.09.2013 was issued by the TPO u/s 92CA (2)/92D(3) calling upon the assessee to file documents as required u/s 10D of the Income-T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assed by TPO is without jurisdiction." 13. For Reddy perusal, operative part of the aforesaid order passed by the Hon'ble Delhi High Court is extracted as under :- "4. Learned Senior Counsel for the assessee contended that the penalty event, as it emerges in the present case, could not be postponed or varied. Learned counsel relied upon the rulings of the Supreme Court in Brij Mohan vs. Commissioner of Income Tax, (1979) 120 ITR 1 SC and also Varkey Chacko vs. Commissioner of Income Tax, (1993) 203 ITR 885 (SC), to say that event of default or at the most the event of recording reasons constitutes the defining point of jurisdiction. In the present case, so called default, noticed by the AO, was acted upon on 25.03.2014. The mere circumstance that the AO did not choose to act upon, it did not mean that the cause for imposing penalty was postponed within the period when the power was expanded under amendment to Section 271G of the Act. 5. The revenue's contention in these proceedings -in defence of the penalty imposed is that the first notice was not proceeded with. The TPO deemed it appropriate to give a second chance and issued fresh notice to the assessee on 05.12.2014 - afte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Who, at this point of time, has the authority to impose the penalty is what is relevant. Whoever this authority may be, he is obliged to impose such penalty as was permissible under the law in that behalf on the date on which the offence of concealment of income was committed, that is to say, on the date of the offending return. The two aspects must firmly be borne in mind, namely, who may impose the penalty and in what measure." 8. In Varkey Chacko (supra), the Supreme Court considered the formulation of law in Brij Mohan(supra) and reiterated it. The assessee's contention was that the concealment exercise - being penal in nature, committed when the return was filed and cognizance taken by the authority, by virtue of the subsequent amendment, was not legal. It was in these circumstances that the Court held that the penalty for concealment of particulars of income for furnishing inaccurate particulars would be upon the assessing authority for satisfaction in that regard. 9. The reliance on Securities and Exchange Board of India (supra) (by Revenue) in the opinion of this Court is insubstantial. The amendment to the Securities and Exchange Board of India Act empowers the S....