Myunghwa Automotive India Pvt. Limited, Kancheepuram V. ACIT, CHENNAI

ITA 263/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9175 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 10-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: RAGHUNATHAN N S
• Keywords: Transfer pricing; International transaction; Bonafide belief; Reasonable cause
• Section: 92E

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . . . , . , % BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.263/MDS/2016 ( / ASSESSMENT YEAR: 2009-10) M/S. MYUNGHWA AUTOMOTIVE INDIA PVT.LTD., 112, SINGADIVAKKAM VILLAGE, KANCHIPURAM DIST. VS THE ASSISTANT COMMISSIONER OF INCOME TAX , COMPANY CIRCLE-IV(3) CHENNAI-34. PAN:AAFCM2148H ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. RAGHUNATHAN N.S., ADVOCATE /RESPONDENT BY : MR. P.RADHAKRISHNAN, JCIT /DATE OF HEARING : 4 TH APRIL, 2016 /DATE OF PRONOUNCEMENT : 15 TH JUNE, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)- 8, CHENNAI DATED 23.11.2015 IN ITA NO.15/2012-13 PA SSED UNDER SECTION 271BA R.W.S. 250(6) OF THE ACT. 2. THOUGH THE ASSESSEE HAS RAISED SEVERAL GROUNDS I N ITS APPEAL, THE CRUX OF THE ISSUE IS THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE PENALTY LEVIED BY THE LEARNED ASSESS ING 2 ITA NO.263 /MDS/2016 OFFICER UNDER SECTION 271BA OF THE ACT FOR BELATED FILING OF FORM NO. 3CEB. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF MANUFACT URING AUTOMOBILE PARTS SUCH AS WATER PUMP ASSEMBLY AND OI L PUMP ASSEMBLY ETC. IT WAS OBSERVED BY THE LEARNED ASSES SING OFFICER THAT THE ASSESSEE COMPANY HAD FILED FORM NO .3CEB AS REQUIRED UNDER SECTION 92E OF THE ACT BELATEDLY. ON QUERY, THE ASSESSEE EXPLAINED BEFORE THE LEARNED ASSESSING OFFICER THAT IT HAD OBTAINED THE CERTIFICATE FROM THE CHART ERED ACCOUNTANT WITHIN THE PRESCRIBED DUE DATE OF FILING THE RETURN BUT WAS UNDER THE BONAFIDE BELIEF THAT THE ELECTRON IC FILING OF THE RELEVANT INFORMATION IN THE TAX RETURN IS SUFFI CIENT AND THE FORM NO.3CEB NEEDS TO BE SUBMITTED ONLY AT THE TIME OF ASSESSMENT WHEN DEMANDED. THE ASSESSEE HAD RELIED IN THE DECISION OF CIT VS. SCHELL INTERNATIONAL REPORT ED IN 278 ITR 630 (BOM), AZADHI BACHAU ANDOLAN VS. UOI REPORT ED IN 252 ITR 471, CIT VS. LAKSHMANASWAMY REPORTED IN 296 ITR 591(MAD) AND OPEN TECHNOLOGIES PVT.LTD. VS. DCIT ( 2010) TII 43 (DEL), WHEREIN THE HONBLE HIGH COURTS HAD D ELETED THE 3 ITA NO.263 /MDS/2016 PENALTY DUE TO IGNORANCE OF LEGAL PROVISIONS OF TH E ASSESSEE, REASONABLE CAUSE FOR NON-COMPLIANCE OF TDS PROVISIO NS, REASONABLE CAUSE FOR BELATED FILING OF TAX AUDIT RE PORT AND REASONABLE CAUSE FOR THE FAILURE TO FURNISH THE REP ORT FROM CHARTERED ACCOUNTANT AS REQUIRED UNDER SECTION 92E OF THE ACT RESPECTIVELY. HOWEVER, THE LEARNED ASSESSING O FFICER OPINED THAT IN THE CASE OF THE ASSESSEE THERE WAS N O REASONABLE CAUSE FOR THE DELAY IN FILING THE REQUIS ITE REPORT, AND IGNORANCE OF THE LAW AND PROCEDURES CANNOT BE T AKEN AS AN EXCUSE FOR NOT FILING OF THE FORM NO.3CEB WITHIN THE STIPULATED DUE DATE AS PER THE ACT. ACCORDINGLY, TH E LEARNED ASSESSING OFFICER LEVIED PENALTY OF `1,00,000/- IN VOKING THE PENAL PROVISIONS OF 271BA OF THE ACT. 4. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) CONFIRMED THE ORDER OF THE LEARNED ASSESS ING OFFICER BY OBSERVING AS UNDER:- I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT . IT IS PERTINENT HERE TO REFER TO THE DECISION OF DELHI BENCH 'E' OF THE HON'BLE ITAT IN THE CASE OF NECTAR LIFE SCIENCES LTD. U. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 13(1), NEW DELHI WHEREIN IT WAS DECLARED AS UNDER: ! I 4 ITA NO.263 /MDS/2016 FROM THE LANGUAGE OF SECTION 92E IT IS CLEAR THAT THE ASSESSEE HAS TO OBTAIN REPORT IN RESPECT OF INTERNA TIONAL TRANSACTION FROM AN ACCOUNTANT AND THE SAME IS TO BE FILED BEFORE THE ASSESSING OFFICER BEFORE THE DUE DATE FOR FILING OF THE RETURN. UNDER RULE 10E THE REPORT FROM THE ACCOUNTANT REQUIRED TO BE FURNISHED: UNDER SECTION 92E BY EVERY PERSON WHO HAS ENTERED INTO INTERNATIONAL TRANSACTION DURING THE PREVIOUS YEAR SHALL BE IN FORM NO. 3CEB AND VERIFIED IN THE MANNER INDICATED THEREIN. FROM THE LANGUAGE OF SECTION 92E IT IS CLEAR THE REPORT IN FORM 3CEB IS TO BE FILED BY THE SPECIFIED DATE I.E., DUE DATE FOR FILING THE RETURN. NOWHERE IN SECTION 92E OR RULE L0E IT IS MENTIONED THAT SUCH REPORT SHOULD BE ANNEXED WITH R ETURN OF INCOME. RULE 12(2) OF THE INCOME-TAX RULES) 1962 SPECIFIES THAT THE RETURN OF INCOME AND RETURN OF FRINGE BENEFITS SHAL L NOT BE ACCOMPANIED BY A STATEMENT SHOWING THE COMPUTATION OF THE TAX PAYABLE ON THE BASIS OF THE RETURN, OR PROOF OF THE TAX, IF ANY, CLAIMED TO HAVE BEEN DEDUCTED OR COLLECTED AT SOURCE OR THE ADVANCE TAX OR TAX ON SELF ASSESSMENT, IF ANY, CLAIMED TO HAVE BEEN PAID OR ANY DOCUMENT OR COPY OF ANY ACCOUNT OR FORM OR REPORT OF AUDIT REQUIRED TO BE ATTACHED WITH THE RETURN OF INCOME OR THE RETURN OF FRINGE BENEFITS UNDER AN Y OF THE PROVISIONS OF THE ACT, SHALL NOT BE FILED. AS PER R ULE 12(2), THE RETURN OF INCOME/FRINGE BENEFITS SHALL NOT BE ACCOM PANIES BY REPORT OF AUDIT. THE REPORT IN FORM 3CEB FROM AN AC COUNTANT IS NOT A REPORT OF AUDIT. IT IS A REPORT IN RESPECT OF INTERNATIONAL TRANSACTION CERTIFYING THE CLAIM OF THE ASSESSEE. RETURN IN ELECTRONIC FORM IS TO BE ACCOMPANIED BY REPORT IN FORM 3CEB THEREFORE, ALE CONTENTION. OF THE ASSESSEE THAT RETURN OF INCOME IN ELECTRONIC FORM WAS NOT TO ACCOMPANY THE REPORT IN FORM 3 CE8 IS NOT CORRECT. THE ASSESSEE WAS REQUIRED TO FILE THE REPORT UNDER SECTION 92; READ WITH RULE 10E. BEFORE THE SPECIFIED DATE I.E., THE DUE DATE FOR FILING OF THE RETURN. SINCE THE ASSESSEE HAS NOT FILED A REPORT IN FORM 3 CEB BEFORE THE DUE DATE OF FILING OF THE RETURN, PENALT Y UNDER SECTION 271BA IS LEVIABLE . ACCORDINGLY, THE ASSESSING OFFICER HAS RIGHTLY IMPOSED PENALTY U/S.271BA AND T HE COMMISSIONER OF INCOME TAX (APPEALS) HAS CONFIRMED THE SAME. ACCORDINGLY, THERE WAS NO INFIRMITY IN TH E ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMING THE PENALTY U/S.261BA. RESPECTFULLY FOLLOWING THE VIEW TAKEN BY THE HONBL E ITAT IN THE CASE OF NECTAR LIFE SCIENCES LTD ., THE PENALTY U/S./271BA LEVIED BY THE ASSESSING OFFICER IS CONFIRMED HEREWI TH. THE APPELLANT FAILS ON THIS GROUND. 5 ITA NO.263 /MDS/2016 5. BEFORE US, THE LEARNED AUTHORIZED REPRESENTATIVE REITERATED THE ARGUMENTS MADE BEFORE THE REVENUE ON THE EARLIER OCCASION. HE FURTHER RELIED IN THE DECISIO N OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF M/S.OPEN TECHN OLOGIES INDIA PVT. LTD. VS. DCIT IN ITA NO.1688/DEL/2010 OR DER DATED 15.06.2010. THE LEARNED AUTHORIZED REPRESENTATIVE F URTHER SUBMITTED THAT THE REQUISITE FORM WAS NOT NOTIFIED BEFORE THE DATE OF FILING OF RETURN AND HENCE, THE ASSESSEE CO ULD NOT FILE THE RELEVANT FORM BEFORE THE REVENUE WITHIN THE DUE DATE OF FILING THE RETURN. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, VEHEMENTLY ARGUED IN SUPPORT OF THE ORDERS OF THE REVENUE. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE MATERIALS BEFORE US, WE FIND THAT THE LEARNED AUTHORIZED REPR ESENTATIVE HAS TAKEN AN ADDITIONAL GROUND BEFORE US STATING TH AT THE REQUISITE FORM WAS NOT NOTIFIED BEFORE THE DUE DATE OF FILING THE RETURN AND HENCE THE ASSESSEE COULD NOT FILE TH E RELEVANT 6 ITA NO.263 /MDS/2016 FORM BEFORE THE REVENUE. WE ARE OF THE CONSIDERED V IEW THAT THIS ASPECT HAS TO BE EXAMINED BY THE LEARNED ASSES SING OFFICER AND THEREAFTER DECIDE THE MATTER AS PER LAW & MERIT. THEREFORE, IN THE INTEREST OF JUSTICE, WE HEREBY RE MIT THE MATTER BACK TO THE FILE OF THE LEARNED ASSESSING OF FICER FOR FRESH CONSIDERATION AND THEREAFTER PASS APPROPRIATE ORDERS AS PER LAW & MERIT KEEPING IN VIEW OF THE DECISION OF THE VARIOUS JUDICIAL HIGHER AUTHORITIES. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE 15 TH JUNE, 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 15 TH JUNE, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /