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5. Thereafter the TPO, after rejecting the contentions of the assessee and after analyzing the provisions of section 92D, rule10D, rule 10C , finally imposed a penalty @ 2% of value of international transaction at Rs.7,76,68,773/- under section 271G of the Act by observing as under:

"17. From the discussion above, it is evident that the TPO has called for specific details within the meaning of section 92D{3) of Income Tax Act, 1961 by issuing notices dated 11/11/2014. 06/05/2015 and 11/11/2015 and the details called for were not filed within 30 days. There does not exist any reasonable cause for no furnishing the details called for even after more than 11 months after issue of first notice dtd. November 2014.

6. In the appellate proceedings, the Ld. CIT(A), after taking into account the submissions and contentions of the Ld. A.R. of M/s. Edelweiss Financial Services Ltd.

the assessee, deleted the penalty as imposed by DCIT(TP) u/s 271G of the Act by observing and holding as under

"I have perused the penalty order u/s 92CA(3) and u/s 271G of the Act passed by the TPO, written submission and paper book filed by the Appellant. There is no dispute with the fact as emerging from TPO's order and details and submission filed by the Appellant. The first contention of the Appellant is that period of sixty days have to be counted from the receipt of notice issued u/s 92D(3) of the Act. The AO has considered this issue in paragraph 6 and 17 of the penalty order passed u/s 271G of the Act wherein the AO has stated that the Appellant has not submitted the details for the period of notice dated 11.11.2014 u/s 92CA(3) of the Act. Thus, the question for consideration before me is as to sixty days is to be computed from which notice either 92CA(3) or 92D(3) of the Act?. In order to decide the above issue, the provision of transfer pricing assessment has been referred. The transfer pricing assessment as explained in the Act states that once the case is referred to the TPO; he will serve a notice u/s 92CA(2) of the Act to the assessee to call for basic and general details pertaining to the international transaction entered into by him with its AEs. If, on perusal of the information or documents filed by the assessee in response to notice issued u/s 92CA(2) of the Act, the TPO is satisfied that the transaction entered into by the assessee is at arm's length price then it is end to the matter. However, if the TPO is not satisfied with the details submitted by the assessee, then he needs to issue notice u/s 92D(3) of the Act asking for the specific details to be filed by the assessee. If contention of the AO is to be accepted that the details have to be filed within the sixty days from the issue of notice u/s 92CA(2) of the Act, then there is no use of section 92D(3) of the Act in the transfer pricing assessment. The legislature in their own wisdom has drafted the law in such a way that first collect the basis or general information of the transaction by serving notice u/s 92CA(2) of the Act and subsequently if further details are required then the TPO is required to issue another notice u/s 92D(3) of the Act asking the specific details from the assessee. My above view if fully supported by the following decisions referred in detail in written submission of the Appellant:

are in accordance with the provisions of the Act. However, the assessee has not co-operated and thus failed to furnish these information within the statutory time limit as provided in section 92D(3) as maintained by the assessee under rule 10D(i) and 10D(iii). Thus, the failure on the part of the assessee has resulted into putting the TPO in great jeopardy in properly and correctly evaluating the international transactions. The Ld. D.R. finally submitted that under these circumstances, the TPO has rightly imposed the penalty equal to 2% of the value of the international transactions which worked out to Rs.7,76,68,773/-. The Ld. D.R. submitted that the Ld. CIT(A) has completely mis-appreciated the facts of the case and deleted the addition by taking the period of default from the notice issued under section 92D(3) instead of 92CA(ii) of the Act and therefore the Ld. D.R. prayed that the Ld. CIT(A) has completely misconstrued the facts of the case and deleted the addition by taking the period from the notice issued under section 92D3 instead of 92CA(ii) of the Act and therefore the Ld. D.R. prayed that the order of the Ld. CIT(A) may be set aside and that of the AO may be restored.

M/s. Edelweiss Financial Services Ltd.

(1) 11.11.2014 under section 92CA(ii) of the Act (2) 06.05.2015 under section 92CA(ii) of the Act (3) 06.11.2015 under section 92D3 of the Act.

The ld TPO imposed the penalty u/s 271G of the Act by taking 60 days from the date of the first notices issued under section 92CA(ii) . The Ld. CIT(A) has calculated the 60 days from the date of notice issued under section 92D of the Act. The Ld. CIT(A) also noted that if the 60 days are reckoned from the date of issue of notice under section 92CA of the Act then the provision of section 92D(iii) would become redundant and otious. The Ld. CIT(A) has relied on a series of decisions as has been reproduced hereinabove in the reproduction of operative part of Ld. CIT(A)'s order considering the provision of the section 92CA(iii), 92D(iii). We are in agreement with the Ld. CIT(A) that period of 60 days are to be reckoned from the date of issue of notice under section 92D(iii) of the Act.