Commissioner Ofincome Tax-I vs M/S Bumi Hiway (I) P. Ltd
2014 Latest Caselaw 4124 Del

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*      IN THE HIGH COURT OF DELHI AT NEW DELHI
                                      Date of Decision: September 03, 2014
+      ITA 440/2014
       COMMISSIONER OFINCOME TAX-I          ..... Appellant
                    Through: Mr.Kamal Sawhney, Sr.Standing
                             Counsel

                         versus

    M/S BUMI HIWAY (I) P. LTD                  ..... Respondent

Through: Ms.Shashi M.Kapila, Advocate with Mr.R.R.Maurya and Mr.Pravesh Sharma, Advocate CORAM:

HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE V. KAMESWAR RAO

SANJIV KHANNA, J (ORAL)

1. This appeal by revenue, impugns order dated 09.01.2014 passed by

Income Tax Appellate Tribunal („Tribunal‟ in short) upholding the order

passed by Commissioner of Income Tax (Appeals) deleting penalty of

Rs.14,84,099/- imposed under Section 271G of the Income Tax Act, 1961

(„Act‟ in short).

2. Tribunal in the impugned order has specifically records and notices

that the Transfer Pricing Officer in his order dated 17.10.2008 had accepted

and recorded that required documents were submitted. After discussion with

the representative of the respondent assessee no adverse conclusion was

drawn. No addition was made to the Arm‟s Length Price on international

transactions entered into by the respondent assessee during the period in

question.

3. Thus, it is not the case of the revenue that the relevant documents as

mandated under Section 92D read with Rule 10D were not furnished to the

Transfer Pricing Officer. The question raised is whether there was any delay

in submission of the said documents. The Assessing Officer vide order dated

29.03.2011 imposed penalty under Section 271G recording that return of

income for the assessment year 2005-06 was filed on 31.10.2005 declaring

income of Rs.33.99 Crores turnover included international transactions

amounting to Rs.74.20 Crores. Penalty order records that the Transfer

Pricing Officer by order under Section 92CA(3) had recommended that

since the respondent assessee had failed to furnish information and

documents under Section 92D, the Assessing Officer "shall" impose penalty

under Section 271G of the Act.

4. The assessee had filed a reply stating that documents prescribed under

Rule 10D were filed and placed on record before the Transfer Pricing

Officer and penalty should not be imposed and in fact should not have been

initiated.

5. The Assessing Officer rejected the said contention observing as

under:-

"The submission of the assessee has been considered and found to be unacceptable no doubt the documents are filed by the assessee but the same were filed beyond the time allowed under section 92D(3) of the Act. Moreover, the assessee not filed any documentary evidence to show that the documents are filed by the assessee within the time allowed under section 92D(3) of the l.T.Act. Further the TPO officer vide note No.2 directed the A.O. as under:-

"The assessee has failed to submit documentation prescribed under rule 10D within the time allowed under section 92D(3) of the Act. The AO may initiate penalty u/s 271 G of the Act. "

Therefore, it is clear that it is a deliberate default of the assessee. Therefore, I am convinced that the assessee had committed default for imposition of penalty u/s, 271 G of the Act. Hence, penalty u/s. 271G of the Act, 1961 leviable in this case is Rs.1484099/- (2% of 74204992/-). Therefore, penalty of Rs.1484099 is hereby imposed.

This penalty order is being passed with the prior approval of the Addl. CIT, Range-3, New Delhi vide letter No. Addl. CITIR- 3/Approval-Penalty/2010-1113244 dated 29.3.2011I. Issue necessary forms."

6. What is clearly discernable from the penalty order is that reference

was not made to any particular or specific date by which assessee was

required to submit the documents; or whether the same were furnished

within 30 days or within the extended period of 30 days thereafter. Penalty

under Section 271G cannot be imposed in this manner. A specific finding

should be recorded on the date by which the assessee was required to furnish

documents and whether documents were furnished, if not which documents

were not furnished and whether any extension of time was granted by the

Transfer Pricing Officer and if the required documents were then actually

filed. The penalty order is bereft and devoid of the said details and,

therefore, shows lack of application of mind. Transfer Pricing Officer had

indicated that the Assessing Officer might initiate proceedings under Section

271G but he also did not refer to date of notice, date of furnishing of

information/documents etc. There was no mandate or affirmative direction

that penalty shall be imposed by the Assessing Officer, as has been observed

in the first part at the penalty order.

7. Commissioner of Income Tax (Appeals) deleted the penalty after

noticing the factual matrix that the Transfer Pricing Officer vide notice dated

12.03.2003 asked the assessee to furnish copy of balance sheet, profit and

loss account and other supporting documents. These were furnished on

20.06.2007.

8. Copy of the notice dated 23.03.2011 issued by the Assessing Officer

has not been filed on record by the Revenue along with the present grounds

of appeal. We do not know what was requisitioned and asked for by the said

notice and which/what documents and details were supplied. We also do not

know whether any extension of time was prayed for or granted by the

Transfer Pricing Officer and whether any hearing was fixed by the Transfer

Pricing Officer pursuant to notice dated 12.03.2007. It appears that the

Transfer Pricing Officer had asked for specific details and documents vide

letter dated 12.06.2008 and these details were fully complied with on

25.06.2008 and 23.07.2008. Compliance of the letter dated 12.06.2008 was

made within period of 30 days on 25.06.2008 and then subsequently on

23.07.2008. The date 23.07.2008 is within 60 days of issue of notice/letter

dated 12.06.2008. We do not know the documents filed on 25.06.2008 and

which documents or details were subsequently filed on 23.07.2008. There is

no discussion on the said aspect in the order passed by the Assessing

Officer, imposing penalty. In these circumstances, we do not find any merit

in the present appeal and the same is dismissed.

6. No costs.

SANJIV KHANNA, J

V. KAMESWAR RAO, J SEPTEMBER 03, 2014/km