M/S. ITT CORPORATION INDIA PVT. LTD.,BARODA vs. THE DY.CIT, CIRCLE-1(2), BARODA

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ITA 1914/AHD/2014Status: DisposedITAT Ahmedabad04 March 2019AY 2009-102 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the TPO did not have the statutory power to impose a penalty under section 271G prior to the amendment made by the Finance (No.2) Act, 2014. Therefore, the penalty order was void ab initio.

What were the facts?

The assessee challenged a penalty order under section 271G for AY 2009-10. The penalty was imposed by the Transfer Pricing Officer (TPO) on June 25, 2012.

What were the issues?

Whether a Transfer Pricing Officer had the authority to impose a penalty under Section 271G prior to the amendment in Finance (No.2) Act, 2014.

Which sections of the Income-tax Act were involved?

Section 271G

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD ‘D’ BENCH, AHMEDABAD

Pronounced: 04.03.2019

Per Pramod Kumar, Vice President:

1.

By way of this appeal, the assessee appellant has challenged correctness of the order dated 21.03.2014 passed by the learned CIT(A), Baroda in the matter of assessment under section 271G of the Income-tax Act, 1961, for the assessment year 2009-10.

2.

When this appeal was called out for hearing, our attention was drawn to the application for admission of following ground of appeal:

“That the order of the Ld. CIT(A)-I, Baroda in confirming the order of the Ld. TPO-II, Ahmedabad in the levy of penalty u/s. 271G amounting to Rs.93,67,851/- is liable to be quashed as void ab initio as being passed without any authority in law.”

3.

Having heard the rival contentions and having perused the material on record, and having regard to the fact this additional ground of appeal only raises a question

IT(TP)A No.1914 /Ahd/2014 Assessment Year: 2009-10 Page 2 of 2

of law arising out of undisputed facts on record, we deem it appropriate to admit the above additional ground of appeal. Ordered, accordingly.

4.

To adjudicate on this appeal, it is enough to take note of the fact that the impugned penalty under section 271G was imposed by the Transfer Pricing Officer, vide his order dated 25.06.2012, whereas until the amendment was made to section 271G, vide Finance (No.2) Act 2014, only the Assessing Officer or the CIT(A) had the statutory powers to impose such penalty. When the above legal position was pointed out to the learned Departmental Representative, he did not have much to say but he placed his reliance on the stand of the authorities below.

5.

As learned counsel for the assessee rightly points out, the powers to impose penalty under section 271G, till 01.10.2014, did not vest in the Transfer Pricing Officer. The impugned penalty order was passed on 25.06.2012, and was, therefore, for this short reason alone, unsustainable in law. The legal position is clear and unambiguous. In view of the above discussions, we vacate the orders of the authorities below and delete the impugned penalty of Rs.93,67,851/-. The assessee gets the relief accordingly.

6.

As the appeal is allowed on the above technical ground, we see no need to deal with other issues raised in the appeal. These issues are as on now purely academic.

7.

In the result, the appeal is allowed. Pronounced in the open Court today on the 4th day of March, 2019. Sd/- Sd/-

Justice P P Bhatt Pramod Kumar (President) (Vice President) Ahmedabad, dated the 4th day of March, 2019 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) DR (6) Guard File

By order True Copy Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad

1.

Date of taking dictation: …04.03.2018……………. 2. Date of typing & draft order placed before the Dictating Member: ……04.03.2018…………. 3. Date on which the approved draft comes to the Sr. P.S./P.S.: ......... 04.03.2018....................... 4. Dt. on which the fair order is placed before the Dictating Member for Pronouncement: ....... 04.03.2018............... 5. Date on which the file goes to the Bench Clerk: …04.03.2018……………….. 6. Date on which the file goes to the Head Clerk: ..…………………... 7. The dt. on which the file goes to the Astt. Registrar for signature on the order: ......................... 8. Date of despatch of the Order: ........................

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