Deputy Commissioner of Income-tax, V. Futura Bioplants Pvt. Ltd., Pune

ITA 2188/PUN/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0604 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 20-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: IS DIRECTED AGAINS T PASSED
• Keywords: Transfer pricing; International transaction; Reasonable cause
• Section: 273B; 92E

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER . / ITA NO.2188/PUN/16 / ASSESSMENT YEARS : 2012-13 DCIT, CIRCLE-1(2), PUNE VS. FUTURA BIOPLANTS PVT. LTD., IST FLOOR, KUMAR CAPITAL, EAST STREET, CAMP, PUNE 411 001 PAN : AABCF2544E (APPELLANT) (RESPONDENT) / ORDER PER R.S.SYAL, VP : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 03-06-2016 DELETING THE PENALTY IMPOSED BY THE ASSESSING OFFICER U/S. 271G OF THE INCOM E-TAX ACT, 1961 (HEREINAFTER ALSO CALLED AS THE ACT) IN RELATION TO THE ASSESSMENT YEAR 2012-13. APPELLANT BY SHRI SUDHENDU DAS RESPONDENT BY SHRI RAJENDRA AGIWAL DATE OF HEARING 29-11-2018 DATE OF PRONOUNCEMENT 30-11-2018 ITA NO.2188/PUN/2016 FUTURA BIOPLANTS PRIVATE LIMITED 2 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESS EE IS ENGAGED IN THE BUSINESS OF AGRICULTURAL ACTIVITIES OF PRODUCTION, PROPAGATION, CULTIVATION, MULTIPLICATION, SELECTION, HARDENING, EXPORT OF VARIETIES OF PLANTS AND FLOWERS. DURING THE COURS E OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (AO) OBSER VED THAT THE ASSESSEE ENTERED INTO INTERNATIONAL TRANSACTIONS, VIZ. IMPORT AND EXPORT WITH ITS ASSOCIATED ENTERPRISE BUT DID NOT FURNISH THE AUDIT REPORT IN FORM NO. 3CEB. NO EXPLANATION WAS TENDERED ON BEING CALLED UPON TO EXPLAIN AS TO WHY SUC H REPORT WAS NOT FURNISHED. THE AO INITIATED PENALTY PROCEEDINGS U/S. 271BA AS AGAINST SECTION 271G. IN THE IMPUGNED PENALTY ORDER PASSED U/S. 271G, THE AO HELD THAT SINCE THE ASSESSEE DID NOT FURNISH REPORT IN FORM NO. 3CEB, THE PENALTY WAS LEVIABLE. HE, THEREFORE, IMPOSED PENALTY O F RS.20,66,860/-, WHICH CAME TO BE DELETED IN THE FIRST APPE AL. 3. WE HAVE HEARD BOTH THE SIDES AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD. IT IS SEEN FROM THE ASSESSM ENT ORDER DATED 23-02-2015 THAT THE AO HAS INITIATED PENALTY ON PAGE 11 OF HIS ORDER ON ACCOUNT OF FAILURE ON THE PART OF THE ASSESSEE TO GET 3CEB REPORT FROM AN AUDITOR AND THEREBY ITA NO.2188/PUN/2016 FUTURA BIOPLANTS PRIVATE LIMITED 3 FAILING TO REPORT INTERNATIONAL TRANSACTIONS ENTERED INTO BY IT WITH THE AES, WHICH, IN HIS OPINION ATTRACT INVOCATION OF PENALTY PROCEEDINGS U/S. 271BA AS WELL AS U/S. 271G. TH US, IT IS EVIDENT FROM THE ASSESSMENT ORDER THAT THE PENALTY PROCEEDINGS WERE INITIATED U/S. 271BA AS WELL AS SECTION 271G ON A SINGLE DEFAULT OF NOT FURNISHING THE AUDIT REPORT IN FORM NO. 3CEB. EVEN IN THE PENALTY ORDER U/S.271G, THE AO HAS REFERRED TO THE FAILURE ON THE PART OF THE ASSESSEE TO FU RNISH THE AUDIT REPORT IN FORM NO. 3CEB. THE LD. CIT(A) NOTICED IN THE IMPUGNED ORDER THAT PENALTY U/S. 271BA WAS DELETED BY HIM BY FINDING A REASONABLE CAUSE IN TERMS OF SECTION 273B . IT IS MANIFEST FROM THE STATUTORY PROVISIONS THAT PENALTY U/S. 271BA IS ATTRACTED FOR FAILURE TO FURNISH REPORT U/S. 92E. SECTION 92E PROVIDES THAT REPORT FROM AN ACCOUNTANT SHOULD BE FURNISHED BY THE PERSON ENTERING INTO INTERNATIONAL TRANSACTIONS. IT IS THE REPORT IN FORM NO. 3CEB WHICH IS REQUIRED IN TERMS OF SECTION 92E, THE FAILURE OF WHICH, GIVES A CAUSE FOR IMPOSING PENALTY U/S. 271BA. ON THE CONTRARY, SECTION 271G TALKS OF PENALTY FOR FAILURE TO FURNISH INFORMATION OR DOCUMENTS U/S. 92D. SECTION 92D, IN TURN, REQUIRES EVERY PERSON ENTERING INTO INTERNATIONAL TRANSACTION TO ITA NO.2188/PUN/2016 FUTURA BIOPLANTS PRIVATE LIMITED 4 KEEP AND MAINTAIN SUCH INFORMATION OR DOCUMENTS AS MAY BE PRESCRIBED. RULE 10D SETS OUT THE LIST OF INFORMATION AND DOCUMENTS WHICH ARE REQUIRED TO BE KEPT AND MAINTAINED. THUS, IT IS PALPABLE THAT FAILURE TO FURNISH REPORT IN FORM NO. 3CEB IS A DEFAULT COVERED U/S.92E FOR WHICH THE PENALTY IS CALLED FOR U/S. 271BA AND NOT U/S. 271G. 4. ADVERTING TO THE FACTS OF THE INSTANT CASE, WE FIND TH AT THE AO IMPOSED PENALTY U/S. 271G ON THE FAILURE OF THE ASSESS EE TO FURNISH THE AUDIT REPORT IN FORM NO. 3CEB, WHICH ACTION IS VOID AB-INITIO . 5. EVEN OTHERWISE, IT IS FOUND THAT THE LD. CIT(A) DELETE D THE PENALTY IMPOSED U/S 271BA BY FINDING A REASONABLE CAUSE F OR THE FAILURE. NOTHING HAS BEEN BROUGHT TO OUR NOTICE TO DEMONSTRATE THAT SUCH ORDER PASSED BY THE LD. CIT(A) HAS BEEN REVERSED OR MODIFIED BY THE TRIBUNAL. A `REASONABLE CAUSE FOR THE DELETION OF PENALTY U/S 271BA HOLDS GOOD FOR THE DELETION OF PENALTY U/S 271G AS WELL. WE, THEREFORE, UPHOLD THE IMPUGNED ORDER IN DELETING THE PENALTY, ALBEIT, ON A DIFFERE NT REASONING. ITA NO.2188/PUN/2016 FUTURA BIOPLANTS PRIVATE LIMITED 5 6. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER, 2018. SD/- SD/- (VIKAS AWASTHY) (R.S.SYAL) JUDICIAL MEMBER VICE PRESID ENT PUNE; DATED : 30 TH NOVEMBER , 2018 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT (APPEALS),-13, PUNE 4. 5. THE PR. CIT-1, PUNE , , / DR B, ITAT, PUNE; 6. / GUARD FILE. // TRUE COPY // / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE ITA NO.2188/PUN/2016 FUTURA BIOPLANTS PRIVATE LIMITED 6 DATE 1. DRAFT DICTATED ON 29-11-18 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 29-11-18 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 7. FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. *