Penalty Under Section 271G Cannot Be Imposed Without Prior Notice Under Section 92D(3) For Transfer Pricing Documentation

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....The ITAT dismissed Revenue's appeal, holding that penalty under s.271G for failure to furnish transfer pricing documentation cannot be levied against the German resident taxpayer. The Tribunal relied on the Procter & Gamble Home Products precedent, which established that s.271G penalties require specific defects to be identified in the documents submitted under s.92D. Since no notice under s.92D(3) was issued requiring the taxpayer to furnish information regarding its international transactions-a prerequisite for initiating s.271G penalty proceedings-the ITAT concluded that the penalty was improperly imposed and upheld the taxpayer's position.....