DCIT, CHENNAI vs. INDIAN ADDITIVES LIMITED, CHENNAI

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ITA 649/CHNY/2017Status: DisposedITAT Chennai06 June 2017AY 2005-063 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that since the Transfer Pricing Officer made no adjustment to the assessee's international transactions, no penalty under Section 271AA could be levied. The deletion of the penalty by the CIT(Appeals) was confirmed.

What were the facts?

The Revenue appealed against the deletion of penalty levied under Section 271AA of the Income Tax Act. The penalty was imposed for not maintaining transfer pricing documentation as required under Section 10B.

What were the issues?

Whether penalty under Section 271AA is leviable when no adjustment is made by the TPO in transfer pricing proceedings, despite non-maintenance of documentation.

Which sections of the Income-tax Act were involved?

Section 271AA,Section 10B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI A. MOHAN ALANKAMONY

Hearing: 11.05.2017Pronounced: 06.06.2017

आयकर अपीलीय अिधकरण, ‘ए’ �यायपीठ, चे�ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI �ी एन.आर.एस. गणेशन, �याियक सद�य एवं �ी ए. मोहन अलंकामणी, लेखा सद�य के सम� BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. : 649/Mds/2017 िनधा�रण वष� / Assessment Year :2005-06 The Deputy Commissioner of Income M/s. Indian Additives Express Tax, v. High Way, Corporate Circle 2(2), Manali, Chennai – 600 068. Chennai – 34 PAN: AAACI1445G (अपीलाथ�/Appellant) (��यथ�/Respondent) अपीलाथ� क� ओर से/Appellant by : Ms. Yamuna, JCIT ��यथ� क� ओर से/Respondent by : Shri N. Viswanathan, CA सुनवाई क� तारीख/Date of Hearing : 11.05.2017 घोषणा क� तारीख/Date of Pronouncement : 06.06.2017 आदेश /O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER:

This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals)-6, Chennai dated 19.01.2017 deleting the penalty levied by the Assessing Officer U/s. 271AA of the Income Tax Act, 1961 (in short ‘the Act’).

2.

Ms. Jamuna, the Ld. Departmental Representative submitted that the assessee has not maintained the transfer pricing documentation as required U/s. 10B of the Act. Therefore, the Ld.AO levied penalty U/s.271AA of the Act. Since, the assessee failed to maintain documentation as required U/s.10B, the Ld.CIT(Appeals) is not justified in deleting the penalty levied by the Ld.AO.

3.

On the contrary, Shri M. Viswanathan, the Ld. representative for the assessee submitted that the assessee engaged in the business of manufacture of lubricating oil. The Transfer Pricing Officer (TPO) has not made any adjustment after going through the material evidence filed by the assessee. Since no adjustment was made in the transfer pricing matter, the Ld.CIT(Appeals) by placing reliance on the order of this Tribunal in the assessee’s own case for the assessment year 2006-07 deleted the penalty levied U/s.271AA of the Act.

4.

We have considered the rival submissions on either side and perused the material available on record. It is not in dispute that the TPO has not made any adjustment in the transfer pricing proceedings. This Tribunal in the assessee’s own case for the assessment year 2006-07 found that since no adjustment was made with regard to international transactions, there cannot be any levy of penalty U/s.271AA of the Act. Since the Ld.CIT(Appeals) has placed reliance on the order of this Tribunal, this Tribunal do not find any reason to interfere with the order of the lower authority. Accordingly the same is confirmed.

5.

In the result, the appeal of the Revenue stands dismissed.

Order pronounced on 6th June, 2017 at Chennai.

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