Income Tax Appellate Tribunal - Hyderabad
M/S. Remy Electicals India Ltd.,, ... vs Department Of Income Tax on 4 July, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD " A " BENCH, HYDERABAD
BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER
AND SHRI SAKTIJIT DAY, JUDICIAL MEMBER
ITA No. 872/HYD/2011
Assessment Year : 2007-08
DCIT, Cir-3(1), ... Appellant
Hyderabad.
Vs.
M/s Remy Electricals India Ltd.,
S.P. Road, Secunderabad ...Respondent
Appellant by : Smt. Nivedita Biswas
Respondent by : Sri P.Murali Mohana Rao
Date of hearing : 04-07-2012
Date of Pronouncement : 20/07/2012
ORDER
PER SAKTIJIT DEY, J.M.:
This appeal filed by the Revenue is directed against the order dated 15-2-2011 of CIT (A)-IV, Hyderabad passed in ITA No.592/Addl.DIT(TP)/CIT(A)-IV/09-10 and it pertains to the assessment year 2007-08.
2. The Revenue has challenged the order passed by the CIT (A) deleting penalty imposed u/s 271G. Briefly, the facts are, the assessee is engaged in the business of manufacture of Auto Electricals. During the relevant financial year, the assessee had international transactions with its associated enterprises abroad amounting to Rs.18.89 crores. The AO referred the assessee's case to the Transfer Pricing Officer for finding out Arms Length 2 ITA No. 872/Hyd/2011 M/s. Remy Electricals India Ltd.
Price. The TPO issued a notice u/s 92CA(2) on 31-12-2009 requiring the assessee to file information with supporting evidence in respect of international transactions in accordance with the provisions contained in Rule 10D read with section 92D of the Act. The TPO also asked for other documents like copies of the annual report of all the companies selected as comparables under the method adopted. The assessee was asked to appear before the TPO on 15-1-2010. The assessee did not furnish any such information on the specified date. Therefore, the TPO issued a reminder on 20-1-2010 requiring the assessee to furnish the required information on or before 29-1-2010. In the said letter, the TPO also intimated the assessee that failure on its part to furnish information will attract penalty u/s 271G of the Act. Since there was no response from the assessee even on 29-1-2010, the TPO passed an order u/s 271G on 22-2-2010 imposing penalty of Rs.36,10,400/-. The assessee challenged the penalty order by filing an appeal before the CIT (A). In the appellate proceedings before the CIT (A), the assessee raised an additional ground challenging the order passed u/s 271G by the TPO to be invalid and void initio on the ground that section 271G does not vest any power with the TPO to impose penalty. The CIT (A) after considering the contentions raised by the assessee held that section 271G only authorises the AO or CIT (A) to impose penalty. Referring to the definition of TPO as provided in Explanation to section92 CA, the CIT (A) held that the TPO cannot be treated as AO.
3. We have heard rival contentions and perused the material on record. Section 271G provides for imposition of penalty for failure to furnish information or documents under s. 92B of the Act. The language in section 271G specifically provides that the 3 ITA No. 872/Hyd/2011 M/s. Remy Electricals India Ltd.
penalty order has to be passed by the AO or the CIT (A). We find force in the contention of the learned AR for the assessee that the TPO cannot be termed as AO for the purpose of section 271G. We find no infirmity in the reasoning of the CIT (A) in this regard. Even on merit also, the CIT (A) after elaborately discussing on the fact, has come to a categorical finding that penalty u/s 271G is not automatic. If the assessee shows a reasonable cause, then no penalty can be imposed. The CIT (A) after considering the explanation submitted by the assessee found that there is reasonable cause in not submitting the documents within the specified time. From the order of the CIT (A), it is clear that the assessee has been able to explain the cause for not submitting the required documents within the specified time before the TPO. On the aforesaid view of the matter, we do not find any infirmity in the order of the CIT (A) in deleting the penalty. We therefore uphold the same and reject the grounds raised by the Revenue.
4. In the result, appeal filed by the Revenue is dismissed.
Order pronounced in the court on 20-7-2012.
Sd/- sd/- (CHANDRA POOJARI) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated 20 th July, 2012 Jmr* 4 ITA No. 872/Hyd/2011 M/s. Remy Electricals India Ltd. Copy to:-
1) DCIT, Cir-3(1), 7 th Floor, B-Block, IT Towers, Hyderabad.
2) M/s Remy Electricals India Limited, 207, Ashoka Bhoopal Chambers, S.P.Road, Secunderabad.
3) The CIT (A)-IV, Hyderabad
4) The CIT concerned, Hyderabad
5) The Departmental Representative, I.T.A.T., Hyderabad.