CPS CASH PROCESSING SOLUTION PRIVATE LIMITED,GURGAON vs. CIT(A), DELHI - 44, DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’, NEW DELHI BEFORE SH. SATBEER SINGH GODARA, JUDICIAL MEMBER AND SH. NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No.3557/Del/2026 (Assessment Year : 2009-10) CPS Cash Processing Vs. CIT, Appeal Solutions Pvt. Ltd. Delhi - 44 1404, 14th Floor, tower B, South City-1, Gurgaon-01 Haryana PAN No. AAACD 6217 H (APPELLANT) (RESPONDENT) Assessee by Shri Mukul Gupta, C.A. and Ms. Shikha Verma, Adv. Revenue by Shri Balkishan Gopal, Sr. D.R. Date of hearing: 13.08.2026 Date of Pronouncement: 13.08.2026 ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER : This captioned appeal has been filed by the assessee against the order of the learned Commissioner of Income Tax (Appeals), Delhi-44 [‘CIT(A)’ in short] dated 27.03.2023 arising from the penalty order dated 03.03.2022 passed by NFAC, Delhi under section 271(1)(c) of Income Tax Act, 1961 [hereinafter referred as ‘the Act’] for the Assessment Year 2009-10.

ITA No. 3557/DEL/2026 [A.Y 2009-10] CPS Processing Solutions Pvt. Ltd. vs. CIT(A) 2. At the outset, the appeal is delayed by 1035 days. The assessee explained that there was change in management which led to the delay. Considering the explanation, we find that there is reasonable and sufficient cause in delay and following the decision of the hon’ble Supreme Court in the case of Collector, Land Acquisition v Mst Katiji & Othrs (1987) 2 SCC 107, we condone the delay.

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ITA No. 3557/DEL/2026 [A.Y 2009-10] CPS Processing Solutions Pvt. Ltd. vs. CIT(A) 6. On the facts and circumstances of the case, the Learned CIT(A) has erred both in law and on facts in confirming the penalty despite the admitted position that pursuant to the order passed by the Hon’ble Income Tax Appellate Tribunal and the consequential order passed under Section 254 of the Income Tax Act, the final assessed position of the Appellant resulted in a loss and no tax liability arose, and therefore the essential condition precedent for levy of penalty under Section 271(1)(c), namely existence of tax sought to be evaded, was absent. 7. On the facts and circumstances of the case, the Learned CIT(A) has erred both in law and on facts in failing to appreciate that penalty proceedings under Section 271(1)(c) of the Income Tax Act are consequential in nature and cannot survive in the absence of any taxable income or tax liability, and accordingly the impugned penalty order is without jurisdiction and liable to be quashed. 8. On the facts and circumstances of the case, the Learned CIT(A) has erred both in law and on facts in failing to appreciate that the transfer pricing adjustment sustained partly in the quantum proceedings arose solely on account of difference of opinion regarding determination of Arm’s Length Price and did not involve any concealment of income or furnishing of inaccurate particulars thereof within the meaning of Section 271(1)(c) of the Income Tax Act. 9. On the facts and circumstances of the case, the Learned CIT(A) has erred both in law and on facts in confirming the penalty without establishing or demonstrating any concealment of income or furnishing of inaccurate particulars by the Appellant, and in absence thereof, the penalty levied is wholly without jurisdiction and liable to be deleted. 10. On the facts and circumstances of the case, the Learned CIT(A) has erred both in law and on facts in failing to appreciate that the additions and adjustments forming the basis of penalty were substantially deleted or modified by the Hon’ble Income Tax Appellate Tribunal, and accordingly the very foundation for levy of penalty stood materially altered and weakened, rendering the penalty unsustainable in law. 11. On the facts and circumstances of the case, the Learned CIT(A) has erred both in law and on facts in confirming the impugned penalty which has been levied mechanically without proper application of mind and without satisfying the statutory conditions prescribed under Section 271(1)(c) of the Income Tax Act. 12. On the facts and circumstances of the case, the Learned CIT(A) has erred both in law and on facts in confirming the impugned penalty Page 3 of 7

ITA No. 3557/DEL/2026 [A.Y 2009-10] CPS Processing Solutions Pvt. Ltd. vs. CIT(A) order which is contrary to the settled legal position that penalty cannot be levied merely on account of disallowances, adjustments, or differences in interpretation, particularly where full and true disclosure has been made by the Appellant. 13. On the facts and circumstances of the case, the impugned penalty order as confirmed by the Learned CIT(A) is illegal, unjustified, excessive, contrary to law, violative of the principles of natural justice, and liable to be quashed. 14. The Appellant craves leave to add, amend or alter any of the grounds of appeal at or before the time of hearing.

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ITA No. 3557/DEL/2026 [A.Y 2009-10] CPS Processing Solutions Pvt. Ltd. vs. CIT(A) damage. Accordingly, the finally assessed loss was determined at Rs.72,89,360/- against the declared loss in the ITR for A.Y 2009-10 of Rs.2,10,44,510/-. Thus, the addition of Rs.1,37,55,150/- being TP adjustments retained by the ITAT was finally sustained. 6. The AO took up the penalty proceedings and finding the assessee explanation devoid of merit, imposed minimum penalty of Rs. 46,75,375/- u/s 271(1)(c) of the Act. Upon appeal, the ld. CIT(A) dismissed the assessee’s appeal. Aggrieved the assessee is before us. 7. At the outset, learned Counsel of the assessee stated that the ld. ITAT has allowed the 70% of quantum appeal in assessee’s favour and the TP adjustment is only on account of difference in opinion. 8. Per contra, ld. DR relied on the order of the AO/CIT(A). 9. We have heard the rival submissions and perused the material available on record. We find it is an uncontroverted fact that the assessee has disclosed all material particulars relating to income and international transactions. In such factual matrix, we are of the view that the TP adjustment made by the AO and partly sustained by the ITAT, are on account of technical and interpretational differences in transfer pricing methodology and does not involve concealment of income or furnishing of inaccurate particulars. We are of the considered view therefore, that the levying of penalty u/s 271(1)(c),

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ITA No. 3557/DEL/2026 [A.Y 2009-10] CPS Processing Solutions Pvt. Ltd. vs. CIT(A) only on account of addition made and partly sustained, is not justified. The Ld AO has to establish that there is concealment of income or the assessee has furnished inaccurate particulars. We, therefore, following the decision of CIT v. Reliance Petroproducts (P.) Ltd. [2010] 322 ITR 158/189 Taxman 322 (SC) , hold that no penalty under section 271(1)(c) of the Act is leviable on the assessee. Appeal is allowed. 10. In the result, appeal filed by the assessee in ITA No. 3557/DEL/2026 is allowed. Order pronounced in the open court on 13.08.2026

Sd/- Sd/- (SATBEER SINGH GODARA) (NAVEEN CHANDRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Date:- 20.08.2026 Priti Yadav, Sr. Ps* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI

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