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M/s. NTT Data Global Delivery Services Limited Vs. .ACIT

2. Brief facts qua the issue are that Assessee Company is engaged in the business of providing IT and ITes services primarily to its group companies. Since assessee had reported international transaction in 'Form 3 CEB' the AO has referred the matter to the TPO to examine the arm's length price of international transaction. Further in such a reference, Ld. TPO vide order dated 17.12.2012 has accepted the arm's length price of international transactions undertaken by the assessee with its AE and no adjustment u/s 92CA was proposed. However, the TPO has recommended for initiation of levy of penalty u/s 271G on the ground that assessee has failed to furnish the documents required by him within the stipulated time given in the notice issued by him for filing of documentation under Rule 10D on 12.7.2011 to be furnished u/s 92D (1) by 12.08.2011. However as noted by the ld. TPO the assessee neither filed any documentation nor was any extension of time sought. The assessee filed the required documents but there was a delay of 33 days in filing the same and accordingly, AO has been levied of Rs. 12,71,40,065/- which is a sum equal to two percent of the total value of the international transactions which was Rs. 636.70 crores.

3. The assessee's case before TPO was that the company was earlier assessed to tax at Delhi based on the registered office situated in Delhi, however the later on principal place for business was shifted to Bangalore pursuant to the merger of Keane International (India) Ltd. and Keane Worldzen India Pvt. Ltd with Keane India Limited, now known as NTT DATA Global Delivery Services Limited. Since the head office and all the tax personnel were based in Bangalore, therefore, Assessee Company had filed an application with the Chief Commissioner of Income Tax New Delhi on 3rd May 2011 with a copy to CCIT Bangalore to transfer its jurisdiction of tax assessment from M/s. NTT Data Global Delivery Services Limited Vs. .ACIT Delhi to Bangalore as per the provisions of section 127. The assessee company kept on following this matter with the office of CCIT for its request for shifting of tax assessments from Delhi to Bangalore on various dates. When the notice from the TPO was received on 12th July, 2011, the assessee filed the letter before the TPO that such an application is pending before the CCIT for transfer of file from Delhi to Bangalore and therefore, it was requested that matter should be kept in abeyance until the files are transferred. However, the ld. TPO refused to accept the said letter. It was further stated that the Delhi office of the assessee company remained closed from 12th August, 2011 to 15th August, 2011 on account of Independence Day preparations, during which period date of compliance as per notice fell. Thus, compliance could not be made on the given date. Otherwise also the company was under bonafide belief that files will be shifted to Bangalore as application was filed by the assessee company way back in May, 2011 with periodical follow up at the office of CCIT. Lastly, it was contented that otherwise also the assessee has fully cooperated before the TPO by furnishing all the relevant documents and information that were required to determine the arm's length price as was called from time to time. Therefore, no penalty should be levied in view of the provisions of section 273B. The assessee's explanation in this regard before the A.O. has been dealt with and incorporated in the impugned penalty order from pages 3 to 7.

3. However, the Ld. A.O. held that since there was delay of 33 days for making compliance and giving an application for transfer of place before CCIT cannot be a reasonable cause and matter could not have been kept in abeyance by the TPO, because until and unless order is passed on under section 127, case could not be transferred and TPO/ AO had to proceed with the matter and mere filing of application M/s. NTT Data Global Delivery Services Limited Vs. .ACIT before CCIT does not tantamount to an order u/s 127, hence penalty has to be levied in accordance with law.

5. We have heard the both parties at length and also the relevant findings given in the impugned order as well as the material referred to before us. The detailed chronology of events leading to imposition of penalty u/s 271G has been filed by the Ld. Counsel which was for the sake of ready reference is reproduced herein below :-

Date Particulars

1. 03.05.2011 Application dated 3rd May 2011 (filed on 6th May 2011) addressed to CCIT, New Delhi with a copy to CCIT, Bangalore requesting transfer of tax jurisdiction of the company to Bangalore and explaining in detail the reasons for such request. Follow up letter was filed with CIT, M/s. NTT Data Global Delivery Services Limited Vs. .ACIT New Delhi dated 16 January 2012 (Filed on 23 January 2012) regarding request for transfer of jurisdiction. Further kind reference is invited to table on internal page 11 of Ld. CIT(A) order which gives more detailed list of follow up actions. For completion of details it may be pointed out that as on date of Ld. CIT(A)'s order process to transfer still remained pending and was completed only on 28.1.2015 by issuance of order u/s 127 (copy of this order is handed over at hearing of appeal only for completion of facts as it was not available before lower authorities and could not be part of paper book).