M/s Telsima Communication Private Limited , Bangalore V. Deputy Commissioner of Income Tax Circle-7(1)(1), Bangalore

ITA 2099/BANG/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4750 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 18-07-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 28-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VAIDEHI
• Keywords: Transfer pricing; International transaction
• Section: 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES C BENCH: BANGALORE BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA. NO. 2099 /BANG/2018 (ASSESSMENT YEAR : 201 2 - 13 ) M/S. TELSIMA COMMUNICATIONS PVT. LTD., 1 ST FLOOR, SALARPURIA TOUCHSTONE, MARATHHALLI, ORR, SARJAPUR, BANGALORE - 560 103 PAN: AABCT 9826D VS. DY. COMMISSIONER OF INCOME TAX , CIRCLE 7(1)(1), BANGALORE. (APPELLANT) (RESPONDENT) ASSESSEE BY: S MT. VAIDEHI, C.A REVENUE BY: SHRI M. RAJASEKHAR, ADDL.CIT (D.R) DATE OF HEARING : 1 8 .07 .2019 DATE OF PRONOUNCEMENT : 09 .08 .2019 O R D E R PER SHRI PAVAN KUMAR GADALE, JM : THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 7, BANGALORE PASSED UNDER SECTION 271G AND 250 OF THE INCOME TAX ACT, 1961. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 2 ITA NO. 2099/BANG/2018 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN MANUFACTURING OF TELECOMMUNICATION PRODUCTS AND PROVIDE SERVICES AND SOLUTIONS AND HAS HARDWARE AND SOFTWARE BUSINESS SEGMENT . IN THE ASSESSMENT PROCEEDINGS, REFERENCE WAS MADE TO THE TRANSFER PRICING OFFICER (TPO) BY THE ACIT, CIRCLE 12(4), BANGALORE AND WHEREAS TP STUDY WAS CONDUCTED BY THE TPO AND PASSED THE ORDER UNDER SECTION 92CA OF THE ACT ON 27.01.2016. FURTHER , THE TPO HAS ISSUED NOTICE DT.30.11.2015 TO SUBMIT T HE INTERNATIONAL 3 ITA NO. 2099/BANG/2018 TRANSACTIONS ENTERED BY THE ASSESSEE WITH ITS ASSOCIATED ENTERPRISES (AE). AFTER DUE CORRESPONDENCE WITH THE ASSESSEE , THE TPO HAS ISSUED SHOW CA USE NOTICE INITIATING PENALTY PROCEEDINGS FOR NON - FURNISHING OF INFORMATION ON HARDWARE AND SOFTWARE SEGMENTS. THE ASSESSEE FILED SUBMISSIONS IN THE PENALTY PROCEEDINGS BY LETTER DT.29.02.2016 EXPLAINING THAT THE PENALTY UNDER SECTION 271G OF THE ACT APPLY IF THE CONDITIONS PRESCRIBED UNDER SEC TION 92D(III) ARE NOT COMPLIED WHEREAS THE ASSESSEE HAS MAINTAINED ALL REQUIRED DOCUMENTS UNDER RULE 10D OF THE I.T. RULES AND WHEREAS THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE ASSESSEE'S SUBMISSIONS AND OBSERVED THAT THE ASSESSEE HAS NOT MAINTAINE D PROPER INFORMATION ON TRANSACTIONS AND LEVELED PENALTY 2% ON INTERNATIONAL TRANSACTIONS WHICH WORKED OUT TO RS.7,03,669 AND PASSED THE ORDER UNDER SECTION 271G OF THE ACT DT.28.07.2016. AGGRIEVED BY THE ORDER, THE ASSESSEE FILED AN APPEAL WITH THE CIT (APPEALS). WHEREAS THE CIT(APPEALS) HAS CONFIRMED THE ACTION OF THE ASSESSING OFFICER AND DISMISSED THE ASSESSEE'S APPEAL. AGGRIEVED BY THE CIT (APPEALS) ORDER, THE ASSESSEE HAS FILED AN APPEAL WITH TRIBUNAL. 4. AT THE TIME OF HEARING, THE LD. AR SUBMITTED THAT THE ASSESSEE HAS MAINTAINED DETAIL S UNDER THE PROVISIONS OF THE ACT IN TRANSFER PRICING STUDY AND FILED EXPLANATION S IN THE PENALTY PROCEEDINGS WHEREAS THE ASSESSING OFFICER HAS LEVIED A PENALTY AS SOME DETAILS REQUIRED TO BE MAINTAIN E D UNDER RULE 10D WHICH THE ASSESSEE HAS COMPLIED AND PRAYED FOR ALLOWING THE ASSESSEE'S APPEAL. CONTRA, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE CIT(APPEALS). 4 ITA NO. 2099/BANG/2018 5 . WE HEARD THE RIVAL CONTENTIONS AND PERUSED THE M ATERIAL ON RECORD. THE SOLE CONTENTION OF THE LEARNED AUTHORISED REPRESENTATIVE THAT THE CIT(APPEALS) ERRED IN CONFIRMING THE PENALTY AND HAS NOT CONSIDERED THE SUBMISSIONS OF THE ASSESSEE ON MERITS. WHEN A QUERY WAS RAISED BY THE BENCH, THE LEARNED AU THORISED REPRESENTATIVE REFERR ED TO THE GROUND OF APPEAL NO.1.4 RAISED BY THE ASSESSEE BEFORE THE CIT(APPEALS), W AS NOT ADJUDICATED AND EMPHASIZED THAT THE CIT (APPEALS) HAS ALSO NOT GIVEN ANY PROPER FINDINGS ON THE ISSUE OF MAINTENANCE OF SEGMENTAL INFORM ATION THOUGH THE ASSESSEE HAS FILED DETAILS. WE FIND STRENGTH IN THE SUBMISSIONS OF LD. AR AS THERE IS NO OBSERVATION / FINDING OF THE CIT (APPEALS) ON THE SUBMISSIONS. WE ARE OF THE OPINION THAT THE CIT (APPEALS) SHALL PASS SPEAKING ORDER AND ACCORDINGL Y WE RESTORE THE DISPUTED ISSUE TO THE FILE OF CIT(APPEALS) TO ADJUDICATE AFRESH AFTER PROVIDING ADEQUATE OPPORTUNITY OF HEARING AND THE ASSESSEE SHALL CO - OPERATE IN SUBMITTING THE DETAILS FOR EARLY DISPOSAL OF THE APPEAL AND THE GROUNDS OF APPEAL OF THE A SSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 9 T H AUG., 2019. S D / - S D / - (A.K. GARODIA) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 0 9 .08. 2019. *REDDY GP 5 ITA NO. 2099/BANG/2018 COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT (A) 4. PR. CIT 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE