M/s Bio-Rad Laboratories (India) Pvt. Ltd., Gurgaon V. DCIT, New Delhi

ITA 1415/DEL/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 8710 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2011-2012
• Appeal Filed On: 07-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY I BARA
• Keywords: Transfer pricing; International transaction; Bonafide belief; Non compliance; Competent authority; Set aside
• Section: 273B; 92D; 201; 6; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH I-1 : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.1415/DEL./2017 (ASSESSMENT YEAR : 2011-12) M/S. BIO-RAD LABORATORIES (INDIA) VS. DCIT, PRIVATE LIMITED, CIRCLE 5 (1) & 6(1), 86-87, UDYOG VIHAR IV, NEW DELHI. GURGAON 122 015 (HARYANA). (PAN : AAACB3202A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.M. GUPTA, ADVOCATE REVENUE BY : SHRI SANJAY I. BARA, CIT DR DATE OF HEARING : 01.10.2019 DATE OF ORDER : 18.11.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER THE APPELLANT, M/S. BIO-RAD LABORATORIES (INDIA) P VT. LTD. (HEREINAFTER REFERRED TO AS THE TAXPAYER) BY FILI NG THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 14.12.2016 PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)- 19, NEW DELHI IN CONSONANCE WITH THE ORDERS PASSED BY THE L D. TPO/AO QUA THE ASSESSMENT YEAR 2011-12 ON THE GROUNDS INTER AL IA THAT :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY ORDER PASSED ITA NO.1415/DEL/2017 2 UNDER SECTION 271G OF THE ACT PASSED BY ADDITIONAL COMMISSIONER OF INCOME-TAX, TRANSFER PRICING OFFICE R- 1(1), NEW DELHI ('LD. TPO') IMPOSING A PENALTY AMOUNTING TO INR 17,347,910 ALLEGING THAT THE APPELLANT HAS FAILED T O COMPLY WITH PROVISIONS OF SECTION 92D(3) OF THE ACT. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DISREGARDING THE REASO NABLE CAUSE OF THE FAILURE BY THE APPELLANT TO COMPLY WITH PROV ISIONS OF SECTION 92D(3) OF THE ACT AND NOT APPRECIATING THE PROVISIONS OF SECTION 273B OF THE ACT. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT THE APPELLANT HAD DULY SUBMITTED THE DOCUMENTS OR INFORMATION AS REQUIRED BY SUB-SECTION (3) OF SECTION 92D OF THE ACT AS WELL A S APPELLANT HAD SUBMITTED NECESSARY BACK-UP DOCUMENTARY EVIDENCES I INFORMATION I EXPLANATIONS TO SUPPORT ARM'S LENGTH PRICING (ALP) OF THE INTERNATIONAL TRANSACTIONS PRIOR TO COMPLETI ON OF TRANSFER PRICING ASSESSMENT, THUS ALLEGED DEFAULT, IF ANY, I S MERELY TECHNICAL FOR WHICH NO PENALTY COULD BE LEVIED UNDE R SECTION 271G OF ACT ON FACTS OF THE CASE. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DISREGARDING THE LIMIT ATION PERIOD PROVIDED UNDER SECTION 275 OF THE ACT FOR THE ORDER S UNDER THE SECTION COVERED BY CHAPTER XXI OF THE ACT. 4.1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE HON'BLE CIT(A) (ON WITHOUT PREJUDICE BASIS ) ERRED IN ARBITRARILY CONCLUDING THAT THE ISSUANCE OF SHOW-CA USE FOR INITIATING THE PROCEEDINGS UNDER SECTION 271G OF TH E ACT DOES NOT IMPLY INITIATION OF PROCEEDINGS UNDER SUCH SECTION. 5. WITHOUT PREJUDICE TO GROUND NO.4 AND 4.1. AND IN ALTERNATE, THE HON'BLE CITCA) ERRED IN NOT QUASHING THE ORDER PASSED UNDER SECTION 271G OF THE ACT BY TPO AS WITH OUT JURISDICTION AND BAD IN LAW AS THE POWERS OF THE LD . TPO TO PASS ORDER UNDER SECTION 271G OF THE ACT WERE PROVIDED B Y THE FINANCE ACT 2014 WITH EFFECT FROM 01.10.2014 AND WO ULD NOT BE APPLICABLE FOR FAILURE TO COMPLY WITH PROVISIONS OF SECTION 92D(3) OF THE ACT BEFORE THE AMENDMENT IN FINANCE ACT 2014 . 3. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ASSESSEE IS ENGAGED INTO THE BUSINESS OF DISTRIBUTION OF DIAGNOSTIC AND LABORATORY EQUIPMENT PRODUCTS OF ITS ITA NO.1415/DEL/2017 3 GROUP COMPANY, HAVING ITS OFFICE LOCATED IN NEW DEL HI. DURING THE YEAR UNDER ASSESSMENT, ASSESSEE DEALT WITH CLINIC D IAGNOSTICS, LIFE SCIENCE RESEARCH, INFORMATICS SADDLER, PROCESS SEPA RATION, LIFE SCIENCE EDUCATION AND FOOD/ANIMAL ENVIRONMENT TESTI NG. DURING THE YEAR UNDER ASSESSMENT, ASSESSEE ENTERED INTO IN TERNATIONAL TRANSACTIONS AS RECORDED IN FORM 3CEB AS UNDER NATURE OF TRANSACTION VALUE (IN INR) NAME OF THE AE AVAILING OF MANAGEMENT SERVICES 56022884 BIO RAD LAB PACIFIC LTD. AVAILING OF IT SERVICES 44202716 BIO RAD LAB (USA) PURCHASE OF FINISHED REAGENTS INSTRUMENTATION AND FINE CHEMICALS 718122991 BIO RAD LAB BIO RAD LAB GMBH MUMCHEN BIO RAD LAB SINGAPORE PTE. LTD. BIO RAD FRANCE BIO RAD LAB DEESIDE LTD. UK DIAMED GMBH SWITZERLAND DIAMED INSTRUMENTS LOGISTICS SAS FRANCE NOBILORIL FRANCE PROVISION OF MARKET SUPPORT SERVICES 45160066 BIO RAD PACIFIC LTD. HONGKONG 4. ON THE REFERENCE MADE BY THE ASSESSING OFFICER ( AO) TO THE TRANSFER PRICING OFFICER (TPO) FOR DETERMINATION OF ARM'S LENGTH PRICE (ALP) ENTERED INTO BY THE ASSESSEE WITH ITS A SSOCIATED ENTERPRISES (AE) DURING THE YEAR ASSESSMENT, THE LD . TPO WHILE MAKING CUMULATIVE ADJUSTMENTS FOR INTRA-GROUP SERVI CES TO THE TUNE OF RS.5,60,22,884/- PROCEEDED TO INITIATE PENALTY P ROCEEDINGS UNDER ITA NO.1415/DEL/2017 4 SECTION 271G OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) ON THE GROUND THAT THE ASSESSEE HAS FAILED TO FILE THE REQUISITE DOCUMENTS BY 16.09.2013 IN COMPLIANCE TO THE NOTICE ISSUED UNDER SECTION 92CA(2) AND 92D(3) OF THE ACT. HOWEVER, TH E ASSESSEE HAS FINALLY FILED THE REQUISITE DOCUMENTS ON 10.09.2014 . 5. LD. TPO / AO INITIATED THE PENALTY PROCEEDINGS. AO, AFTER DECLINING THE CONTENTIONS RAISED BY THE ASSESSEE, L EVIED THE PENALTY OF RS.1,73,47,910/- I.E. EQUAL TO 2% OF THE INTERNA TIONAL TRANSACTIONS UNDER SECTION 92D(3) OF THE ACT ON THE GROUND THAT ASSESSEE HAS FAILED TO SUBSTANTIATE THE REASONS FOR ITS NON- COMPLIANCE OF THE NOTICE ISSUED UNDER SECTION 92CA( 2) & 92D(3) FOR OVER A PERIOD OF ONE YEAR. LD. CIT (A) AFFIRME D THE PENALTY LEVIED BY THE AO. 6. FEELING AGGRIEVED, THE ASSESSEE HAS COME UP BEFO RE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 7. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. UNDISPUTEDLY. LD. TPO PASSED THE ORDER UNDER SEC TION 92A(3) MAKING AN ADJUSTMENT OF RS.5,60,22,884/-. I T IS ALSO NOT IN DISPUTE THAT NOTICE DATED 16.09.2013 WAS ISSUED BY THE TPO U/S ITA NO.1415/DEL/2017 5 92CA (2)/92D(3) CALLING UPON THE ASSESSEE TO FILE D OCUMENTS AS REQUIRED U/S 10D OF THE INCOME-TAX RULES, 1963. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE HAS FILED REQUISITE DOCUM ENTS BEFORE THE LD. TPO ON 10.09.2014. IT IS ALSO NOT IN DISPUTE T HAT NOTICE U/S 271G OF THE ACT WAS ISSUED ON 23.03.2015 TO WHICH A SSESSEE HAS FILED SUBMISSIONS FOR NON-IMPOSITION OF THE PENALTY ON 15.04.2015 AND ULTIMATELY PENALTY ORDER HAS BEEN PASSED ON 27. 04.2015. IT IS ALSO NOT IN DISPUTE THAT THE PENALTY ORDER WAS PASS ED BY THE LD. TPO FOR ALLEGED DEFAULT COMMITTED PRIOR TO THE AMENDMEN T IN SECTION 271G OF THE ACT BY THE FINANCE (NO.2) ACT, 2014 WIT H EFFECT FROM OCTOBER 1, 2014. 9. IN THE BACKDROP OF THE AFORESAID UNDISPUTED FACT S & CIRCUMSTANCES OF THE CASE AND ORDERS PASSED BY THE LOWER REVENUE AUTHORITIES THE SOLE QUESTION ARISES FOR DETERMINAT ION IN THIS CASE IS:- AS TO WHETHER TPO WAS EMPOWERED TO LEVY A PENALTY UNDER SECTION 271G OF THE ACT FOR THE ALLEGED DEFAU LT OF NON-SUBMISSION OF DOCUMENTS WITHIN STIPULATED PERIO D AS REQUIRED UNDER SECTION 92D(3) PRIOR TO THE AMENDMENT IN SECTION 271G OF THE ACT BY FINANCE (NO.2) ACT, 2014 EFFECTIVE FROM OCTOBER 1, 2014. 10. LD. AR FOR THE ASSESSEE CHALLENGING THE IMPUGNE D ORDER PASSED BY THE LD. CIT (A) AFFIRMING THE PENALTY LEV IED BY THE AO ITA NO.1415/DEL/2017 6 U/S 271G CONTENDED THAT LD. TPO WAS NOT EMPOWERED T O LEVY THE PENALTY U/S 271G FOR THE ALLEGED DEFAULT OF NON-SUB MISSION OF THE DOCUMENTS AS REQUIRED UNDER SECTION 92D(3) PRIOR TO THE AMENDMENT IN SECTION 271G I.E. WITH EFFECT FROM OCT OBER 1, 2014 AND RELIED UPON THE ORDER PASSED BY THE HONBLE DEL HI HIGH COURT IN CASE OF ERICSSON INDIA PRIVATE LTD. VS. ADDL. CIT (2019) 41 1 ITR 333 (DELHI) . 11. UNDISPUTEDLY, PRIOR TO 1 ST OCTOBER, 2014, ONLY AO WAS EMPOWERED TO LEVY THE PENALTY FOR COMMITTING DEFAUL T BY THE ASSESSEE UNDER SECTION 92D(3) OF THE ACT AND IT IS ONLY AFTER 01.10.2014 THAT LD. TPO GOT THE POWER TO LEVY THE P ENALTY. IN THE INSTANT CASE, LD. TPO INITIATED THE PENALTY PROCEED INGS U/S 271G AGAINST THE ASSESSEE FOR COMMITTING DEFAULT TO COMP LY WITH THE NOTICE DATED 16.09.2013. NOTICE FOR INITIATING THE PENALTY WAS ISSUED U/S 271G OF THE ACT FOR LEVYING THE PENALTY ON 23.03.2015. 12. HONBLE HIGH COURT OF DELHI IN CASE OF ERICSSON INDIA PVT. LTD. (SUPRA) DECIDED THE IDENTICAL ISSUE IN FAVOUR OF T HE ASSESSEE HOLDING THAT WHEN EVENT OF DEFAULT OCCURRED IN MARCH, 2014 I.E. WELL PRIOR TO THE DATE OF COMING INTO FORCE OF THE AMENDMENT I.E. W.E.F. 01.10.2014, THE IMPUGNED ORDER PASSED BY TPO IS WITHOUT JURISDICTION. ITA NO.1415/DEL/2017 7 13. FOR REDDY PERUSAL, OPERATIVE PART OF THE AFORES AID ORDER PASSED BY THE HONBLE DELHI HIGH COURT IS EXTRACTED AS UNDER :- 4. LEARNED SENIOR COUNSEL FOR THE ASSESSEE CONTEND ED THAT THE PENALTY EVENT, AS IT EMERGES IN THE PRESENT CAS E, COULD NOT BE POSTPONED OR VARIED. LEARNED COUNSEL RELIED UPON TH E RULINGS OF THE SUPREME COURT IN BRIJ MOHAN VS. COMMISSIONER OF INCOME TAX, (1979) 120 ITR 1 SC AND ALSO VARKEY CHACKO VS. COMMISSIONER OF INCOME TAX, (1993) 203 ITR 885 (SC) , TO SAY THAT EVENT OF DEFAULT OR AT THE MOST THE EVENT OF R ECORDING REASONS CONSTITUTES THE DEFINING POINT OF JURISDICTION. IN THE PRESENT CASE, SO CALLED DEFAULT, NOTICED BY THE AO, WAS ACTED UPO N ON 25.03.2014. THE MERE CIRCUMSTANCE THAT THE AO DID N OT CHOOSE TO ACT UPON, IT DID NOT MEAN THAT THE CAUSE FOR IMPOSI NG PENALTY WAS POSTPONED WITHIN THE PERIOD WHEN THE POWER WAS EXPA NDED UNDER AMENDMENT TO SECTION 271G OF THE ACT. 5. THE REVENUES CONTENTION IN THESE PROCEEDINGS - IN DEFENCE OF THE PENALTY IMPOSED IS THAT THE FIRST NO TICE WAS NOT PROCEEDED WITH. THE TPO DEEMED IT APPROPRIATE TO GI VE A SECOND CHANCE AND ISSUED FRESH NOTICE TO THE ASSESSEE ON 0 5.12.2014 AFTER THE AMENDMENT WAS BROUGHT INTO FORCE W.E.F 01.10.2014.WHEN HE ISSUED THE NOTICE, THE TPO POSSE SSED THE POWER. THE CONSEQUENT IMPOSITION OF PENALTY ON WAS WARRANTED AND WITHIN THE JURISDICTION. LEARNED COUNSEL FOR TH E REVENUE RELIES UPON SECURITIES AND EXCHANGE BOARD OF INDIA VS. CLASSIC CREDIT LTD., JT 2017 (9) SC 558, TO SAY THAT THE AM ENDMENT TO SECTION 271GMERELY CHANGED THE FORUM BUT DID NOT IN ANY WAY CONFER FRESH JURISDICTION ON A NEW AUTHORITY. 6. IN BRIJ MOHAN (SUPRA), THE SUPREME COURT ARTICUL ATED THE CORRECT POSITION IN THE CASE OF ASSESSMENTS AND THE LAW APPLICABLE WITH RESPECT TO JURISDICTION AND OTHER SUBSTANTIVE PROPOSITION ON ONE HAND AND THE CORRECT POSITION IN RESPECT OF PEN ALTY ON THE OTHER HAND BY HOLDING AS FOLLOWS: ......IN OUR OPINION, THE ASSESSMENT OF THE TOTAL INCOME AND, THE COMPUTATION OF TAX LIABILITY IS A PROCEEDI NG WHICH, FOR THAT PURPOSE, IS GOVERNED BY ENTIRELY DI FFERENT CONSIDERATIONS FROM A PROCEEDING FOR PENALTY IMPOSE D FOR CONCEALMENT OF INCOME. AND THIS IS SO NOTWITHSTANDI NG THAT THE INCOME CONCEALED IS THE INCOME ASSESSED TO TAX. IN THE CASE OF THE ASSESSMENT OF INCOME AND THE DETERMINATION OF THE CONSEQUENT TAX LIABILITY, THE RELEVANT LAW IS THE LAW WHICH RULES DURING THE ASSESSMENT YE AR IN RESPECT OF WHICH THE TOTAL INCOME IS ASSESSED AND T HE TAX LIABILITY DETERMINED. THE RATE OF TAX IS DETERMINED BY THE RELEVANT FINANCE ACT. IN THE CASE OF A PENALTY, HOW EVER, ITA NO.1415/DEL/2017 8 WE MUST REMEMBER THAT A PENALTY IS IMPOSED ON ACCOU NT OF THE COMMISSION OF A WRONGFUL ACT, AND PLAINLY IT IS THE LAW OPERATING ON THE DATE ON WHICH THE WRONGFUL ACT IS COMMITTED WHICH DETERMINES THE PENALTY. WHERE PENAL TY IS IMPOSED FOR CONCEALMENT OF PARTICULARS OF INCOME, I T IS THE LAW RULING ON THE DATE WHEN THE ACT OF CONCEALMENT TAKES PLACE WHICH IS RELEVANT. IT IS WHOLLY IMMATERIAL TH AT THE INCOME CONCEALED WAS TO BE ASSESSED IN RELATION TO AN ASSESSMENT YEAR IN THE PAST........ 7. IN VARKEY CHACKO(SUPRA), THE SUPREME COURT STATE D AS FOLLOWS: A PENALTY FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME CAN BE IMPOSED ONLY WHEN THE ASSESSING AUTHORITY IS SATISF IED THAT THERE HAS BEEN SUCH CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS. A PENALTY PROCEEDING, THERE FORE, CAN BE INITIATED ONLY AFTER IN ASSESSMENT ORDER HAS BEEN MADE WHICH FINDS SUCH CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS. WHO, AT THIS POINT OF TIME, HAS THE AUTHORITY TO IMPOSE THE PENALTY IS WHAT IS RELEVANT . WHOEVER THIS AUTHORITY MAY BE, HE IS OBLIGED TO IMP OSE SUCH PENALTY AS WAS PERMISSIBLE UNDER THE LAW IN TH AT BEHALF ON THE DATE ON WHICH THE OFFENCE OF CONCEALM ENT OF INCOME WAS COMMITTED, THAT IS TO SAY, ON THE DATE O F THE OFFENDING RETURN. THE TWO ASPECTS MUST FIRMLY BE BO RNE IN MIND, NAMELY, WHO MAY IMPOSE THE PENALTY AND IN WHA T MEASURE. 8. IN VARKEY CHACKO (SUPRA), THE SUPREME COURT CONS IDERED THE FORMULATION OF LAW IN BRIJ MOHAN(SUPRA) AND REI TERATED IT. THE ASSESSEES CONTENTION WAS THAT THE CONCEALMENT EXERCISE BEING PENAL IN NATURE, COMMITTED WHEN THE RETURN WA S FILED AND COGNIZANCE TAKEN BY THE AUTHORITY, BY VIRTUE OF THE SUBSEQUENT AMENDMENT, WAS NOT LEGAL. IT WAS IN THESE CIRCUMSTA NCES THAT THE COURT HELD THAT THE PENALTY FOR CONCEALMENT OF PART ICULARS OF INCOME FOR FURNISHING INACCURATE PARTICULARS WOULD BE UPON THE ASSESSING AUTHORITY FOR SATISFACTION IN THAT REGARD . 9. THE RELIANCE ON SECURITIES AND EXCHANGE BOARD OF INDIA (SUPRA) (BY REVENUE) IN THE OPINION OF THIS COURT I S INSUBSTANTIAL. THE AMENDMENT TO THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT EMPOWERS THE SESSIONS COURT TO ENTERTAIN, TAKE COGNIZANCE AND TRY OFFENCES UNDER THAT ENACTMENT; EITHER OF TH OSE OFFENCES WERE TRIABLE BY THE MAGISTRATE. THE SUPREME COURT R EPELLED THE SUBMISSIONS MADE ON BEHALF OF THE ACCUSED/OPPOSITE PARTY OF PREJUDICE. THE ARGUMENTS MADE ON THEIR BEHALF WAS T HAT THE MAGISTRATES WERE EMPOWERED TO TRY SUMMARILY OFFENCE S, THAT WAS THE SUBJECT MATTER OF THE COMPLAINT AND OTHER PROCE EDINGS BEFORE ITA NO.1415/DEL/2017 9 THEM AND THAT THIS HAD LED TO THE APPROVAL OF VALUA BLE RIGHTS UNDER SECTION 260 OF THE CODE OF CRIMINAL PROCEDURE (CR.P.C). THE SUPREME COURT REPELLED THIS ARGUMENT, STATING T HAT THERE WAS NO RIGHT TO PARTICULAR PROCEDURE AND THAT EVEN OTHERWISE UNDER SECTION 260/262 CR.P.C, A MAGISTRATE HAD DISC RETION TO IGNORE THE SUMMARY PROCEEDINGS AND CONTINUE TO TRY THE OFFENCE IN A REGULAR MANNER. IN THE OPINION OF THIS COURT, THAT JUDGMENT DOES NOT HELP THE REVENUES ANSWER ON THE CHARGE OF LACK OF JURISDICTION AND THE LAW AS ENUNCIATED IN BRIJ MOHA N AND VARKEY CHACKO(SUPRA) I.E. THAT THE EVENT OF DEFAULT DEFINE S THE JURISDICTION OF THE CONCERNED AUTHORITY, WHO MAY PR OCEED TO INITIATE THE PENALTY PROCEEDINGS. IN THE PRESENT CA SE, SINCE EVENT OF DEFAULT OCCURRED IN MARCH, 2014 I.E. WELL PRIOR TO THE DATE OF COMING INTO FORCE THE AMENDMENT (I.E. 01.10.2014), THE IMPUGNED ORDER WAS WHOLLY WITHOUT JURISDICTION. 14. FOLLOWING THE RATIO LAID DOWN BY HONBLE DELHI HIGH COURT IN THE CASE OF ERICSSON INDIA PVT. LTD. (SUPRA), WHEN WE APPRECIATE THE FACTS OF THE INSTANT CASE IN WHICH NOTICE UNDER SECTION 92CA(2) & 92D(3) WAS ISSUED BY THE TPO ON SEPTEMBER 16, 201 3 AND DUE TO ITS NON COMPLIANCE, ISSUED NOTICE TO THE ASSESSE E ON OCTOBER 28, 2013, TO SHOW CAUSE AS TO WHY THE PENALTY PROCEEDIN GS U/S 271G SHOULD NOT BE INITIATED, IT IS A APPARENTLY CLEAR T HAT, THE EVENT OF DEFAULT TOOK PLACE IN THE INSTANT CASE ON OCTOBER 2 8, 2013 I.E. WELL BEFORE THE AMENDMENT OF SECTION 271G, WHICH CAME IN TO FORCE W.E.F. OCTOBER 1, 2014. 15. WE ARE OF THE CONSIDERED VIEW THAT ON OCTOBER 2 8, 2013, WHEN PENALTY PROCEEDINGS INITIATED U/S 271G ONLY AO WAS EMPOWERED TO LEVY THE PENALTY AND NOT THE TPO AS HA S BEEN DONE IN THE PRESENT CASE. IN OTHER WORDS, PENALTY UNDER SECTION 271G IS ITA NO.1415/DEL/2017 10 LEVIABLE FOR OMISSION OR COMMISSION OF THE WRONGFUL ACT IN ACCORDANCE WITH THE LAW APPLICABLE ON THE DATE OF S UCH COMMISSION OR OMISSION. SO, WE ARE OF THE CONSIDERED VIEW THA T ON THE DATE OF NON-COMPLIANCE OF THE NOTICE AS REQUIRED UNDER SECT ION 92D (3) I.E. OCTOBER 23, 2013, ONLY AO WAS HAVING THE POWER TO L EVY THE PENALTY U/S 271G AND NOT THE TPO. SO, THE PENALTY LEVIED BY THE TPO VIDE ORDER DATED 27.04.2015 AND CONFIRMED BY TH E LD. CIT (A) BY PASSING THE IMPUGNED ORDER IS NOT SUSTAINABLE IN THE EYES OF LAW. 16. EVEN ON MERITS, THE PENALTY LEVIED BY THE LD. T PO AND SUSTAINED BY THE LD. CIT (A), IS NOT SUSTAINABLE BE CAUSE UNDISPUTEDLY ASSESSEE HAS SUBMITTED DOCUMENTS ON TH E BASIS OF WHICH LD. TPO HAS PROPOSED THE ADJUSTMENT AND NO PR EJUDICE WHATSOEVER IS CAUSED TO THE REVENUE. HONBLE APEX COURT IN THE CASE OF HINDUSTAN STEEL LTD. VS. STATE OF ORISSA 83 ITR 26 (SC) HELD THAT, WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FRO M A BONAFIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN TH E MANNER PRESCRIBED THE STATUE, THE COMPETENT AUTHORITY MAY NOT IMPOSE THE PENALTY. 17. SO, WE ARE OF THE CONSIDERED YOU THAT THOUGH TH ERE IS A DELAY ON THE PART OF THE ASSESSEE TO FILE THE REQUISITE D OCUMENTS BUT ULTIMATELY DOCUMENTS HAVE BEEN FILED AND ASSESSMENT HAS BEEN FRAMED AND MOREOVER NO MALAFIDE ON THE PART OF THE ASSESSEE NOT TO ITA NO.1415/DEL/2017 11 COMPLY WITH THE PROVISIONS CONTAINED UNDER SECTION 92D (3) HAS COME ON RECORD AND AS SUCH, PENALTY LEVIED IN THIS CASE IS NOT SUSTAINABLE ON MERITS ALSO. 16. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE AR E OF THE CONSIDERED VIEW THAT PENALTY LEVIED BY THE TPO AND CONFIRMED BY THE LD. CIT (A) IS NOT SUSTAINABLE ON ACCOUNT OF JU RISDICTIONAL ERROR, HENCE PENALTY ORDER IS QUASHED AND THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 18 TH DAY OF NOVEMBER, 2019. SD/- SD/- (R.K. PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 18 TH DAY OF NOVEMBER , 2019 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-19, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.