DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE - 1 (2), PUNE vs. FRANCOIS COMPRESSORS INDIA PRIVATE LTD, PUNE

That when the matter travelled before the Ld.CIT(Appeals), the assessee vide its submissions had explained that he was prevented from not filing the requisite documents as required u/s.92D r.w.r. 10D because of various reasonable causes. The assessee in its submissions has explained those reasonable causes before the Ld. CIT(Appeals) which is on record. More specifically, the assessee had contended that even though they had not filed requisite documents before the Assessing Officer but nonetheless all those documents were filed before the Transfer Pricing Officer (TPO) and thereafter, the TPO in his order dated 29.01.2016 u/s. 92C(3) of the Act had accepted the value of international transactions with regard to Arm's Length Price (ALP) of the assessee and the said was not disturbed by the TPO. The assessee had further submitted that the basic purpose for furnishing the documents specified u/s.92D r.w.r. 10D is to justify the ALP with regard to international transactions entered into during the year under consideration by the assessee and when that has been determined and has not been disturbed by the TPO's order then non filing of such documents before the Assessing Officer is merely a technical hitch for which no prejudice is caused to the Revenue.

We have perused all the relevant documents placed before us and have gone through the submissions of the assessee as well as the assessment order and the order of the Ld.CIT(Appeals) along with relevant documents annexed before us in the paper book, more specifically the penalty notice issued u/s.274 r.w.s 271G in respect of section 92D(3) of the Act, decision of the Hon'ble Delhi High Court (supra.) and the explanation of reasonable causes by the assessee. We find that the finding of the Ld.CIT(Appeals) is in order. The TPO has accepted the ALP of the assessee in respect of the international transactions. The basic requirements of the provision for filing documents u/s.92D r.w.r. 10D of the Rules is with regard to enabling the Department for determination of the said ALP. In any case when the Assessing Officer has referred the matter to the TPO ultimately all the documents would had to be examined by the TPO and in this case he has done that. Therefore, non-filing of such documents before the Assessing Officer is a mere technical hitch which has not caused any prejudice to Revenue

Thereafter, when we peruse the notice for penalty proceedings, there also, there is no mention of any specific documents that are required to be filed by the assessee before the Assessing Officer. Taking the guidance of the Hon'ble Delhi High Court (supra.) without naming those documents there cannot be any imposition of penalty u/s.271G of the Act. In our opinion, the principles of natural justice demands in respect of the right of defense for the assessee whatever proceedings are to be done by any Quasi-Judicial Authority, the first step is the issuance of notice to the assessee and in that said notice all the relevant details should be there so that the assessee gets an opportunity to prepare his defense and unfortunately in this case, it was not done. For this reason also penalty u/s.271G of the Act is not imposable. That further section 273B of the Act provides for reasonable cause and if that is justified, penalty /s. 271G of the Act may not be imposed and when this opportunity is given to the assessee by the statutes itself and the assessee has explained the reasonable causes which was accepted by the Ld. CIT(Appeal) and after perusing such reasons, we are in conformity with the findings of the Ld.CIT(Appeals). The Ld. DR could not bring out any evidences or place on record any material suggesting no reasonable cause in respect of the assessee. In view thereof, we don't find any reason to interfere with the findings of the Ld. CIT(Appeal) and the same is upheld. The relief provided to the assessee is hereby sustained.

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

The Pr. CIT-1, Pune. धवभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, “ए” बेंच, 5. पुणे / DR, ITAT, “A” Bench, Pune. गार्ा फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // True Copy // धनजी सधचव / Private Secretary आयकर अपीलीय अधधकरण, पुणे / ITAT, Pune.