TaxTMI 
TaxTMI 
TaxTMI 
2025 (2) TMI 1514
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....p on 19.11.2019 in the course of which the premise of the assessee company M/s. Best Oasis Ltd. was also covered. Thereafter, proceeding u/s. 153A of the Act was initiated in the case of the assessee for A.Ys. 2012-13 to 2019-20. The assessee had filed its return of income for A.Y. 2012-13 on 23.07.2021 declaring Nil income. The assessee is a non-resident company and wholly owned subsidiary of Priya Blue Industries Pvt. Ltd. (PBIPL). In the course of search at Mumbai Office of PBIPL, it was found that the said office was also functioning as the key office of Best Oasis Ltd. (Hong Kong) and a number of important functions of assessee company were being carried out from Mumbai office premises. The activities of the assessee company being carried out in India from the office of PBIPL constituted a business connection in India and the income of the assessee was deemed to accrue or arise out of such business connection and was liable to be taxed in India. It further transpired that the assessee company had entered into various international transactions with its associated/related enterprise (AEs) which included sale, securing guarantee and getting managerial/office services from its AE....
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....nd penalties for all the years were deleted. 7. Now, the Revenue is in appeal before us against the order of the Ld. CIT(A). The only ground taken by the Revenue in this appeal is as under: 1. "In the facts and on the circumstances of the case and in law, the ld.CIT(A) has erred in deleting the penalty u/s. 271AA of Rs. 5,36,25,808/ - levied for non-maintaining documents as specified in section 92D r.w.r. 10D, without discussing the case on merits". 8. The ground raised by the Revenue in all eight years are identical except the amount of penalty involved in the different assessment years. 9. Shri Abhay Thakur, Ld. CIT.DR and Shri B. P. Srivastava, Ld. Sr. DR have argued the matter on behalf of the Revenue for different years. They have strongly supported the penalty order passed by the AO in all the years involved. It was submitted that neither the assessee had filed its original return nor the international transaction carried out by it, was ever reported in accordance with the provision of Section 92D(4) of the Act. It was submitted that the assessee did not maintain the requisite documents in respect of international transactions as stipulated u/s. 92D r.w.r. 1....
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.... ITO v. PPN Power Generating Co. P. Ltd. (2012) 18 taxmann.com 127 (Chennai); • ACIT v. Global One India P. Ltd. (2012) 19 taxmann.com 249 (Delhi Trib.); • CIT v. M/s. Leroy Somer & Controls (India) Pvt. Ltd. (2013) 360 ITR 532 (Delhi); • Tapi JWil JV v. Income-tax Officer (2024) 158 taxmann.com 433 (Delhi Trib.); • Apace Realty v. Income-tax Officer (2022) 140 taxmann.com 257 (Mum); • DCIT v. Francois Compressors India P. Ltd. (2021) 129 taxmann.com 260 (Pune); 12. Shri Tushar Hemani, Ld. Sr. Counsel, assailed the penalty order on the ground that no case was made out by the AO for levy of penalty under section 271AA of the Act. He submitted that the Ld. CIT(A) had correctly appreciated the facts of the case and rightly deleted the penalty u/s. 271AA of the Act as imposed by the AO. He, therefore, requested that the order of the Ld. CIT(A) does not require any interference and all the appeals of the Revenue are liable to be dismissed. 13. We have carefully considered the rival submissions. It is found from the assessment order that the AO has not pointed out any specific default on the part of the assessee in m....
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.... any other financial estimates prepared by the assessee for the business as a whole and for each division or product separately, which may have a bearing on the international transactions or the specified domestic transactions entered into by the assessee; (g) a record of uncontrolled transactions taken into account for analysing their comparability with the international transactions or the specified domestic transactions entered into, including a record of the nature, terms and conditions relating to any uncontrolled transaction with third parties which may be of relevance to the pricing of the international transactions or specified domestic transactions, as the case may be; (h) a record of the analysis performed to evaluate comparability of uncontrolled transactions with the relevant international transaction or specified domestic transaction; (i) a description of the methods considered for determining the arm's length price in relation to each international transaction or specified domestic transaction or class of transaction, the method selected as the most appropriate method along with explanations as to why such method was so selected, and how....
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....rtaken at ALP. A copy of the notices issued by TPO and the reply of the assessee before the TPO has also been brought on record in the paper-book filed. It is found there from that the assessee had made detailed submission in respect of all the queries as raised by the TPO, who had given the following finding in his order u/s.92CA(3) of the Act dated 28.01.2022: "2. A notice u/s. 92CA(2) of the IT Act along with a questionnaire was issued to the assessee on 30.09.2021 by this office requiring the assessee to furnish all the necessary details and documents in support of the arm's length price. Further, notice u/s. 92CA (2) r.w.s. 129 of the IT Act was also issued to the assessee on 01/11 /2021 requesting to file the required details. Further, reminders were also issued to the assessee for furnishing the required details. In response to the notices issued, assessee furnished the details called for through ITBA portal as well as the designation email of this office." 17. It is, thus, found that all the details and documents as required by the TPO were furnished by the assessee and no default was pointed out by the TPO in his report. Further, the TPO had also found the ....
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.... the assessee, were not to be maintained by the assessee. 19. On identical facts, the coordinate Bench of Delhi Tribunal had held in the case of Convergys Customer Management Group Inc (supra) that where the AO did not specify the documents / information required to be kept and maintained u/s. 92D, the penalty under section 271AA was rightly cancelled. 20. Hon'ble Delhi High Court in CIT vs Leroy Somer & Controls India (P) Ltd (supra) had held that before levying penalty u/s. 271AA of the Act, the Revenue must first mention the documents or information which was required to be maintained, but not maintained or not furnished by the assessee and then proceed with penalty proceedings by observing as follows: 14. Sub-rule (4) further states that the documents specified in subrules (1) and (2), as far as possible, be contemporaneous and should be latest by the specified date referred to in Section 92F(iv), i.e., due date in Explanation 2 below Section 139(1). Thus, indicating the documentation/information may be floating, transient and changeable. Constant assimilation may be required. Besides, data information can also vary. The tribunal has rightly concluded that wi....
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....t of international transactions made by the assessee. On the other hand, the TPO had given a clean chit to the assessee in his report by stating that the assessee had furnished the details as called for. Thus, we do not find any infirmity in the order of the ld. CIT(A) deleting the penalty levied u/s. 271AA of the Act. Therefore, the ground as raised by the Revenue is devoid of merit and is liable to be rejected. 23. In the result, the appeal of the Revenue is dismissed. ITA No.634 to 640/Ahd/2024 24. The facts involved in ITA No.634 to 640/Ahd/2024 for assessment years 2013-14 to 2019-20 are identical to ITA No. 633/Ahd/2024. Therefore, the decision of ITA No. 633/Ahd/2024 is applicable mutatis mutandis to all the appeals of the Revenue in ITA No.634 to 640/Ahd/2024. Accordingly, the appeals of the Revenue in in ITA No.634 to 640/Ahd/2024 are dismissed. 25. In the final result, all the appeals of the Revenue are dismissed. ============= Document 1 A Y. Date of penalty order passed u/s 271AA of the Act Amount of penalty (In Rs.) Nature of addition 2012-13 22/09/2022 (Date of service as per form no. 35 is 10.01.2023) 5,36.25,808/- A sum of 2% of the total value o....