Indian Kanoon - Search engine for Indian Law

3. Levying penalty without establishing that the assessee failed to furnish information/documentation as required under Section 92D of the Act read with Rule 10D and without demonstrating any wilful default or contumacious conduct. Therefore, the impugned penalty order and CIT(A) order ought to be quashed.

The grounds of appeal are independent of, and without prejudice to one another:

The Appellant craves leave to add, amend, alter, or withdraw any ground of appeal stated here-in-above, either before or at the time of hearing of this appeal."

6. Aggrieved with the order of Ld. CIT(A), the assessee is in appeal before the Tribunal. The Learned Authorised Representative ("Ld. AR") submitted that the only ground of appeal of the assessee is against the levy of penalty under section 271G of the Act. It was contended that the assessee had furnished all relevant documentation as required under section 92D of the Act r.w. Rule 10D of the Income Tax Rules, 1962 ("the Rules") and in response to the notices issued by the Ld. TPO. The Ld. AR submitted that no specific deficiency or failure was pointed out by the Ld. TPO with respect to the documentation submitted. The Ld. AR invited our attention to pages 32 to 41 of the Ld. CIT(A)'s order, where detailed submissions made by the assessee have been reproduced, including the responses to the Ld. TPO's questionnaire and documentary compliance. It was submitted that without pointing out any specific non-compliance, the penalty was mechanically levied by Ld. AO/TPO.

7. In the alternative, the Ld. AR submitted that the quantum issue in respect of the transfer pricing adjustment for the year under consideration had already been remanded to the file of the Ld. AO/TPO by the coordinate Bench of the Tribunal in assessee's own case vide ITA No.65/Ind/2022 dated 19.01.2024. Accordingly, it was contended that the penalty proceedings under section 271G should also be remanded, as the penalty is intrinsically linked to the quantum outcome.

8. Per contra, the Learned Departmental Representative ("Ld. DR") relied on the order of the Ld. AO and Ld. CIT(A) and submitted that both authorities had categorically recorded that the assessee failed to produce the requisite documentation under section 92D of the Act read with Rule 10D of the Rules. Attention was drawn to page no.63 of the Ld. CIT(A)'s order and para no. 5 of the penalty order of Ld. AO, where such failure is specifically noted. The Ld. DR submitted that in absence of satisfactory explanation or evidence from the assessee, there was no error in levying penalty under section 271G of the Act and no further relief was warranted. However, with regard to the alternate argument of the assessee regarding remanding the issue to the file of Ld. AO /TPO, the Ld. DR did not make any objection.