ITO WARD - 16(4), NEW DELHI vs. MAT BRAKES INDIA PRIVATE LIMITED, NEW DELHI

This appeal in for AY 2013-14 arises out of the order of the Commissioner of Income-tax (Appeal)-44, New Delhi, in Appeal No.208/2018- 19/CIT(A)-44 dated 29.11.2019 [hereinafter referred to as ‘ld. CIT(A)’, in short] against the order of assessment passed u/s 143(3) r.w.s. 144C of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 13.06.2017 by the ld. Income- tax Officer, Circle 16(2), New Delhi (hereinafter referred to as ‘ld. AO’).

At the outset, we find that this appeal of the Revenue requires to be dismissed on the ground of low tax effect. We find that this appeal is against the penalty levied u/s 271(1)(c) of the Act. We find that the ld. AO, in the original assessment completed, made transfer pricing adjustment of Rs.2,23,31,862/-. Pursuant to the directions issued by the ld. Dispute Resolution Panel (DRP), this transfer pricing adjustment was brought down to Rs.1,38,07,041/-. In fact, the revision order has already been passed by the ld. AO on 27.04.2018. While this is so, the ld. AO was not justified in levying penalty u/s 271(1)(c) of the Act on the addition of Rs.2,23,31,862/-. In respect of the transfer pricing adjustment of Rs.2,23,31,862/-, the ld. AO had levied penalty u/s 271(1)(c) of the Act in the sum of Rs.72,45,571/-. Once the transfer pricing adjustment gets reduced to Rs.1,38,07,041/-, the corresponding penalty would work out to Rs.44,79,693/- which would eventually be less than the monetary limit prescribed by the CBDT for preferring appeal before this Tribunal by the Revenue, vide Circular No.17/2019 dated 8th August, 2019. Hence, we deem it fit to dismiss the appeal of the Revenue as not maintainable on the ground of low tax effect.