MESDAN INDIA P. LTD, MUMBAI V. ASST CIT 10(1), MUMBAI

ITA 306/MUM/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9072 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 13-12-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 12-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMARDR
• Keywords: Transfer pricing; International transaction; Reasonable cause
• Section: 273B; 92E

Judgement Text

, INCOME-TAX APPELLATE TRIBUNAL -BBENCH MUMBAI , , BEFORE S/SH.RAJENDRA,ACCOUNTANT MEMBER AND AMARJIT SINGH,JUDICIAL MEMBER ./I.T.A./306/MUM/2012, / ASSESSMENT YEAR: 2008-09 ./I.T.A./307/MUM/2012, / ASSESSMENT YEAR: 2009-10 MESDAN INDIA PVT. LTD. ENGINEER & MEHTA, CHARTERED ACCOUNTANTS, 501/504, MIDAS CHAMBERS NEAR FUN REPUBLIC MULTIPLEX OFF ANDHERI LINK ROAD, ANDHERI (W) MUMBAI-400 053. PAN:AACCM 0842 R VS. ACIT-10(1) AAYAKAR BHAVAN, M.K. ROAD CHURCHGATE, MUMBAI-400 020. ( /APPELLANT ) ( / RESPONDENT) / REVENUE BY: SHRI SUMAN KUMAR-DR /ASSESSEE BY: NONE / DATE OF HEARING: 13/12/2016 / DATE OF PRONOUNCEMENT: 06/01/2017 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) , / PER RAJENDRA A.M. - CHALLENGING THE ORDERS DT. 22.09.11 OF CIT(A)-21, M UMBAI THE ASSESSEE HAS FILED APPEALS FOR THE ABOVE MENTIONED TWO AY.S. AS THE ISSUE INVOLVED IN THE APPEALS IS IDENTICAL, LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT, SO WE ARE ADJUDI CATING BOTH THE APPEALS BY A SINGLE COMMON ORDER. 306/M/2012 A.Y.2008-09 : 2. THE ASSESSEE FILED ITS RETURN OF INCOME ON 19.09. 2008, DECLARING TOTAL INCOME AT RS.2.69 CRORES. SUBSEQUENTLY, ON 18.09.2009 IT FILED TRANSF ER PRICING REPORT IN FORM NO.3CEB WHEREIN INTERNATIONAL TRANSACTION (IT) OF RS.3.35 CRORES WERE REPORTED. THE ASSESSING OFFICER (A.O.) HELD THAT THE ASSESSEE WAS REQUIRED TO FURNISH THE REPORT IN FORM NO.3CEB ON OR BEFORE THE DUE DATE U/S.139(1) OF THE ACT AS PER THE PROVISION S OF SECTION 92E,THAT IT HAD FAILED TO COMPLY WITH THE TERMS OF THE SAID SECTION. HE INITIATED PE NALTY PROCEEDINGS U/S. 271BA OF THE ACT. 3. VIDE ITS LETTER DT.18.11.2009 THE ASSESSEE MADE IT S SUBMISSIONS AND REFERRED TO THE CIRCULAR NO.6/2008, DATED 18.07.2008 ISSUED BY THE CBDT AND STATED THAT THERE WAS NO INTENTION ON PART OF THE ASSESSEE AS NOT TO DELIBERATELY FILE T HE REPORT ALONGWITH THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION, THAT THE REPORT WAS F ILED ON 26.09.2009. 306 & 307/M/12-MESDAN INDIA 2 AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE, THE AO HELD THAT THE EXPLANATION FILED BY IT FOR DELAY/DEFAULT IN FURNISHING THE REPORT WAS UNTE NABLE, THAT THE RETURN WAS E-FILED ON 19.09.2008, THAT THE AUDIT REPORT IN FORM NO.3CEB W AS SUBMITTED ON 18.09.2009, THAT IT HAD TRIED TO RECTIFY THE FAILURE TO COMPLY WITH THE PRO VISIONS OF SECTION 92E OF THE ACT AT A LATER DATE, THAT IT HAD COMMITTED A DEFAULT UNDER SECTION 271BA. FINALLY HE LEVIED A PENALTY OF RS.1 LAKHS, VIDE ITS ORDER DATED 28.05.2010. 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE IS IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA). BEFORE HIM, IT WAS ARGUED THAT THE CBDT BY ITS CIRCULAR DT.18.07.2008 (SUPRA), HAD CLARIFIED THAT NO DOCUMENTS WERE TO BE ATTACHED WITH THE RETURN OF INCOME , THAT THE OFFICERS RECEIVING THE RETURN OF INCOME WERE IN STRUCTED TO DETACH ALL DOCUMENTS ENCLOSED WITH THE RETURN OF INCOME AND TO HAND IT OVER TO TH E ASSESSEE, THAT THE CBDT HAD CLARIFIED IN ITS CIRCULAR AND HAD ADVISED THE ASSESSEES TO RETA IN WITH THEMSELVES ALL THE ANNEXURES RELATING TO COMPUTATION OF INCOME, TDS CERTIFICATES , AUDIT REPORTS AND ANY OTHER DOCUMENT WHICH THEY WOULD HAVE OTHERWISE LIKED TO FILE IN SU PPORT OF THEIR CLAIMS, THAT THE BOARD HAD ALLOWED THE ASSESSEE TO FILE THE ORIGINAL DOCUMENT S AND CERTIFICATES TO THE AO AS AND WHEN CALLED FOR BY THE EMPLOYEES,THAT THERE WAS NO INTEN TION ON PART OF THE ASSESSEE TO FILE THE REPORT BELATEDLY, THAT NON SUBMISSION OF REPORT ALO NGWITH THE RETURN WAS ONLY A TECHNICAL DEFAULT, THAT THE IMPOSITION OF PENALTY WAS NOT IN THE FORM OF COLLECTION OF REVENUE, THAT AS PER THE PROVISIONS OF SECTION 273B, IF THE ASSESSEE PR OVES THAT THERE WAS REASONABLE CAUSE FOR FAILURE IN FILING THE REPORT,PENALTY U/S. 271BA SHO ULD NOT BE LEVIED, THAT THERE WAS REASONABLE CAUSE FOR FAILURE ON PART OF THE ASSESSEE, THAT A B ONA FIDE BREACH SHOULD NOT LEAD TO IMPOSITION OF PENALTY, THAT THE AO HAD NOT ASKED FOR THE REPOR T BY ISSUING NOTICE/QUESTIONNAIRE. AFTER CONSIDERING THE PENALTY ORDER AND THE SUBMISS ION OF THE ASSESSEE THE FAA HELD THAT THE ASSESSEE DID NOT FILE THE REPORT AS REQUIRED BY THE PROVISIONS OF THE ACT, THAT IT HAD OBTAINED THE REPORT ON 18.09.2008, THAT IT FILED THE REPORT IN SEPTEMBER 2009, THAT THE OFFICIALS OF THE DEPARTMENT WERE NOT PROHIBITED BY THE CBDT TO ACCEP T OTHER DOCUMENTS ENCLOSED WITH SUBMISSIONS/INDEPENDENT FORWARDING LETTERS. THE ASS ESSEE COULD HAVE FORWARDED THE REPORT WITH A LETTER OR COULD HAVE SENT BY POST, THAT THER E WAS NO REASONABLE CAUSE FOR FILING OF REPORT, AO WAS JUSTIFIED IN LEVYING PENALTY U/S. 271BA OF T HE ACT. 5. NONE APPEARED BEFORE US AS STATED EARLIER. THE DR SUPPORTED THE ORDER OF THE FAA AND CONTENDED THAT REPORT WAS FILED AFTER ONE YEAR. 306 & 307/M/12-MESDAN INDIA 3 WE HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. W E FIND THAT THE ASSESSEE HAD OBTAINED THE REPORT BEFORE FILING THE RETURN OF INCOME,THAT AS P ER THE CIRCULAR OF THE BOARD IT WAS NOT ALLOWED TO ATTACH ANY DOCUMENTS WHILE FILING THE RE TURNS , THAT IT FILED THE REPORT WITHOUT ANY DIRECTION OF THE AO TO FILE THE SAME, THAT THE OFFI CIALS OF THE DEPARTMENT DID NOT ACCEPT THE REPORT AS PER THE INSTRUCTIONS OF THE CBDT, THAT IT HAD E-FILED THE RETURN AND THERE WAS NO PROVISION TO SUBMIT ANY DOCUMENT.PROVISIONS OF SECT ION 273B STIPULATE THAT IF REASONABLE CAUSE IS SHOWN BY THE ASSESSEE PENALTY U/S. 271BA SHOULD NOT BE LEVIED. IN OUR OPINION, THE REASONS SUBMITTED BY THE ASSESSEE WILL FALL UNDER T HE CATEGORY OF SUFFICIENT/REASONABLE CAUSE FOR LATE FILING OF THE REPORT.IMPOSITION OF PENALTY IS NOT AUTOMATIC.THE OFFICERS OF THE DEPARTMENT HAVE TO CONSIDER THE EXPLANATION FILED B Y THE ASSESSEE AND HAVE TO DECIDE THE ISSUE ON MERITS.CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE,WE ARE OF THE OPINION THAT MATTER IS COVERED BY THE PROVISIONS OF SECTION 273B OF THE ACT.THEREFORE, REVERSING THE ORDER OF THE FAA, WE DECIDE THE EFFEC TIVE GROUND OF APPEAL IN FAVOUR OF THE ASSESSEE. ITA/307/MUM/12-AY 09-10: FACTS OF THE CASE FOR THE YEAR UNDER CONSIDERATION ARE IDENTICAL TO THE FACTS OF THE EARLIER AY . THEREFORE, FOLLOWING THE SAME, WE ALLOW THE APPEAL FILED BY THE ASSESSEE. AS A RESULT, APPEALS FILED BY THE ASSESSEE FOR THE AY.S 2008-09 TO 2009-10 STAND ALLOWED. . . 2008-09 2009-10 . ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH JANUARY, 2017. 6 , 2017 SD/- SD/- ( / AMARJIT SINGH ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 06.01.2017. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR B BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.