ADDI. CIT, SPECIAL RANGE-1, NEW DELHI vs. AON SERVICES INDIA P.LTD, NEW DELHI

ITA 5988/DEL/2019Status: DisposedITAT Delhi05 October 2026AY 2008-0913 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the appeal filed by the Revenue is dismissed. The deletion of penalty by the CIT(A) was upheld. The Tribunal noted that the transfer pricing adjustment was primarily due to changes in filters and comparables applied by the TPO. It was observed that the application of filters and selection of comparables are highly debatable issues, and therefore, the assessee cannot be accused of furnishing inaccurate particulars of income or concealing income in respect of such additions. The Tribunal followed its own decision in the assessee's own case for AY 2006-07 and AY 2007-08, where it was held that penalty under Section 271(1)(c) cannot be levied merely due to a difference in opinion on debatable issues like TP adjustments. Furthermore, it was noted that the quantum appeal for the subject AY resulted in the deletion of TP adjustments for non-US transactions, and US transactions were settled under MAP. Consequently, the grounds of appeal raised by the Revenue were rejected as devoid of merit.

What were the facts?

The Revenue is in appeal against the order of the CIT(A) dated 30.04.2019, which deleted the penalty imposed by the Assessing Officer (AO) under Section 271(1)(c) of the Income Tax Act, 1961, for Assessment Year (AY) 2008-09. The AO had initiated penalty proceedings following an addition of Rs. 44,06,38,092/- made by adopting the Arm's Length Price (ALP) determined by the Transfer Pricing Officer (TPO). The assessee, Aon Services India Pvt. Ltd., had filed its return of income on 30.09.2008. The penalty order was passed by the AO on 28.04.2016. The assessee's appeal before the CIT(A) was allowed, leading to the present appeal by the Revenue.

What were the issues?

1. Whether the CIT(A) erred in deleting the entire penalty imposed under Section 271(1)(c) of the Act on account of furnishing inaccurate particulars of income with respect to Transfer Pricing (TP) adjustment? (Question of law) 2. Whether the CIT(A) erred in deleting the penalty under Section 271(1)(c) of the Act, ignoring that the Dispute Resolution Panel (DRP) confirmed the quantum addition and the Mutual Agreement Procedure (MAP) resolution did not provide full relief to the assessee regarding TP adjustment? Assessee's Contentions: - The levy of penalty under Section 271(1)(c) is unsustainable as the TP adjustment pertains to debatable issues, specifically the selection of comparables and application of filters, which are highly debatable. Reliance was placed on the Tribunal's own case for AY 2006-07 & AY 2007-08 (ITA No. 5986 & 5987/DEL/2022) and various judicial precedents including Verizon Communications India Private Limited Vs DCIT. - The assessee maintained TP documentation in good faith and with due diligence, making full and complete disclosure. - The TP adjustment with respect to non-US transactions would stand deleted pursuant to the quantum appeal, and US transactions were settled under MAP, rendering the penalty allegations unsustainable. Revenue's Contentions: - The CIT(A) erred in deleting the penalty, ignoring that the DRP confirmed the quantum addition and the MAP resolution did not provide relief to the extent of Rs. 12,90,71,056/- of TP adjustment.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 250(6),Section 144,Section 144B,Section 143(1),Section 143(2),Section 142(1),Section 92CA(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “I”, NEWDELHI

Before: SHRI M BALAGANESH & SHRI VIMAL KUMAR

For Appellant: Shri Harpreet Singh Ajmani, Adv &, Shri Shashvat Dhamija, Adv
Hearing: 09.07.2026Pronounced: 05.10.2026

PER VIMAL KUMAR, JM:

The appeal filed by the Revenue is against order dated 30.04.2019 of Ld. Commissioner of Income Tax (Appeals)- 44, New Delhi [hereinafter referred to as “the CIT(A)”] under section 250(6) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) arising out of penalty order dated 28.04.2016 of the Ld. Assessing Officer/DCIT,

2 Circle 2(2), New Delhi (hereinafter referred to as ‘the Ld. AO’) u/s 144

r.w.s. 144B of the Act for A.Y. 2008-09. 2. Brief facts of the case are that, the Assessee filed return of income

of Rs. 9,4

The order continues below.

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