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2. PCIT vs. Sahara India Life Insurance Ltd., ITA No. 475/2019 dated 02.08.2019 (Del HC)
3. CIT vs. Manjunath Cotton and Ginning Factory (2013) 359 ITR 565 (Karnataka)
4. PCIT vs. New Era Sova Mine, Tax Appeal No.
5. CIT vs Shri Samson Perinchery, ITA No.1154/2016 dated 05.01.2017 Inadvertent Mistake This has also been settled by the Hon'ble Supreme Court in the case of Price Waterhouse Copper Pvt. Ltd. Vs. CIT (2012) 348 ITR 306 (SC) that no penalty on account of a human error can be levied. The observations of the Hon'ble Supreme Court read as under:-
"19. The contents of the Tax Audit Report suggest that there is no question of the assessee concealing its income. There is also no question of the assessee furnishing any inaccurate particulars. It appears to us that all that has happened in the present case is that through a bona fide and inadvertent error, the assessee while submitting its return, failed to add the provision for gratuity to its total income. This can only be described as a human error which we are all prone to make. The calibre and expertise of the assessee has little or nothing to do with the inadvertent error. That the assessee should have been careful cannot be doubted, but the absence of due care, in a case such as the present does not mean that the assessed is guilty of either furnishing inaccurate particulars or attempting to conceal its income. "

Section 271AA is covered under Section 273B where it has been provided that in case the assessee is able to prove the reasonable cause for failure, penalty should not be levied. In the present case, from the face of the facts only, it becomes too clear that the mistake occurred only out of a simple human error. In the background of the fact that the Ld. TPO has not proposed any adjustment and no loss to Revenue is occurring because of such failure, it is quite evitable that it was just an innocent error which should not result in such heavy penalty.

8. Per Contra, the Ld. DR relied upon the orders of the authorities below.

9. Upon careful consideration, we find that the Transfer Pricing Officer has not found necessary to make any transfer pricing adjustment. Hence, undoubtedly, in substance, there was no defect in the transfer pricing conducted by the assessee. The only issue is erroneous mention in the transfer pricing report about the method though it did not result in any transfer pricing adjustment and was revenue neutral. This has been taken a reason enough to levy huge penalty u/s 271AA of the Act. The assessee plea that there was an inadvertent mistake has been rejected. In our consideration opinion, there is no reason as to why the plea of inadvertent mistake should be rejected on the touchstone of Hon'ble Supreme Court decision in Price Waterhouse Coopers Pvt.Ltd vs C.I.T 348 ITR 346, wherein, it was explained that there should not be any penalty on account of human error. Furthermore, without any loss of Revenue, it is strange that penalty has been levied. In this connection, the case laws referred by the Ld. Counsel for the assessee are germane and support the case of the assessee. In this view of the matter, the penalty levied cannot be sustained. Hence, in the background of aforesaid discussion and precedents we set-aside the orders of the authorities below and delete the penalty levied.