The ADIT.,(Intl.Taxn.), Ahmedabad V. The Niko Resources Ltd., Baroda

ITA 561/AHD/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2186 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 09-05-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 18-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VISPI T PATEL
• Keywords: Transfer pricing; International transaction
• Section: 92

Judgement Text

ITA NO. 561/ AHD/2010 ASSESSMENT YEAR: 2005 - 06 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH, AHMEDABAD [CORAM : SHRI PRAMOD KUMAR A.M. AND SHRI KUL BHARAT J.M.] ITA NO. 561/ AHD/2010 ASSESSMENT YEAR: 2005 - 06 ASSISTANT DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION), AHMEDABAD . . A PPELLANT VS. NIKKO RESOURCES LIMITED .. RESPONDENT 4 TH FLOOR, LANDMARK, RACE COURSE ROAD, BARODA 390 007 [ PAN : AAACN7060L] APPEARANCES: T SHANKAR FOR THE APPELLANT VISPI T PATEL FOR THE RESPONDENT DATE OF HEARING : MAY 9 , 2013 DATE OF PRONOUNCEMENT : JUNE 28 , , 2013 O R D E R PER PRAMOD KUMAR : 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF LEARNED CIT(A)S ORDER DATED 19 TH NOVEMBER 2009, IN THE MATTER OF PENALTY UNDER SECTION 271 G OF THE INCOME T AX ACT, 1961, FOR THE ASSESSMENT YEAR 2005 - 06. 2. GRIEVANCE RAISED BY THE APPELLANT IS AS FOLLOWS: THE LEARNED CIT(A) GANDHINAGAR HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE TPO DID NOT ASK ANY SPECIFIC INFORMATION FROM THE ASSESSEE, AS REQUIRED UN DER SECTION 92 D(3) OF THE INCOME TAX ACT, 1961, AND IN DELETING THE PENALTY UNDER SECTION 271 G OF THE INCOME TAX ACT, 1961, OF RS 8,94,775 ON THAT BASIS. ITA NO. 561/ AHD/2010 ASSESSMENT YEAR: 2005 - 06 PAGE 2 OF 4 3. LEARNED REPRESENTATIVES FAIRLY AGREE THAT THERE IS NOTHING ON THE RECORD TO EVIDENCE THAT ANY S PECIFIC REQUISITION WAS MADE UNDER SECTION 92D(3) WHICH HAS NOT BEEN COMPLIED WITH, EVEN THOUGH LEARNED DEPARTMENTAL REPRESENTATIVE THAT SUCH A SPECIFIC REQUISITION NOT BEING COMPLIED WITH A CONDITION PRECEDENT FOR LEVYING PENALTY UNDER SECTION 271 G. THER E IS ALSO A CATEGORICAL FINDING BY THE CIT(A) TO THE EFFECT THAT CLEARLY, THE OPERATIVE PART OF THE FINDING OF THE TPO . IS THAT THE TRANSACTION IN QUESTION HAS NOT BEEN REPORTED IN FORM 3 CEB REPORT, AND, THEREFORE, THE PENALTY IS INITIATED UNDER SECTI ON 271 G BUT THE SCOPE OF SECTION 271 G IS DIFFERENT AND IT DOES NOT COVER THE NON REPORTING IN FORM 3 CEB . NO MATERIAL HAS BEEN BROUGHT ON RECORD TO QUESTION OR DEMOLISH THESE FINDINGS OF FACT. LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, CONTEND S THAT AS HELD BY A COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF CARGILL INDIA PRIVATE LIMITED VS DCIT ( 110 ITD 616 ), UNLESS THERE IS A SPECIFIC REQUISITION UNDER SECTION 92D(3), WHICH HAS REMAINED TO BE COMPLIED, PENALTY UNDER SECTION 271 G CANNOT BE INVOKED. 4. WE FIND THAT THE ISSUE IS NO LONGER RES INTEGRA . AS HELD BY A COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF CARGIL INDIA PVT LTD ( SUPRA ), THERE HAS TO BE A SPECIFIC REQUISITION UNDER SECTION 92 D(3), WITH DUE APPLICATION OF MIND, FOR FUR NISHING OF INFORMATION AND IT IS ONLY WHEN SUCH A REQUISITION IS NOT COMPLIED WITH THAT PENALTY UNDER SECTION 271 G CAN BE LEVIED. ADMITTEDLY, THERE IS NO SUCH SPECIFIC REQUISITION IN THIS CASE WHICH HAS NOT BEEN COMPLIED WITH. WE MAY, IN THIS REGARD, REFE R TO THE FOLLOWING OBSERVATIONS MADE BY THE COORDINATE BENCH IN CARGILLS CASE ( SUPRA ) : - ITA NO. 561/ AHD/2010 ASSESSMENT YEAR: 2005 - 06 PAGE 3 OF 4 THUS NOTICE U/S 92D(3) IS DIFFERENT FROM OTHER STATUTORY NOTICES. HERE THE ASSESSING OFFICER OR CIT (APPEALS) ARE EMPOWERED TO REQUIRE FROM THE TAXPAYER OR ANY PERS ON WHO HAS ENTERED INTO AN INTERNATIONAL TRANSACTION TO FURNISH ANY PRESCRIBED INFORMATION OR DOCUMENT. NOTICE U/S 92D(3) HAS TO BE CONFINED TO THE FURNISHING OF INFORMATION OR DOCUMENT AS MAY BE PRESCRIBED. IT IS UNAUTHORIZED TO REQUIRE THE NOTICEE TO F URNISH NON - PRESCRIBED INFORMATION. IF IN THE NOTICE NON - PRESCRIBED INFORMATION IS ALSO CALLED FOR, IT WOULD NOT BE TREATED AS NOTICE UNDER SECTION 92D(3) BUT UNDER SECTION 92CA(3) OR SOME OTHER PROVISION OF THE ACT IRRESPECTIVE OF THE TITLE OR LABEL GIVEN TO SUCH A NOTICE. RELEVANT INFORMATION CAN BE SOUGHT UNDER NOTICE U/S 92CA(3) ALSO. FURTHER, THERE IS NO RESTRICTION OF FURNISHING PRESCRIBED INFORMATION IN RESPONSE TO NOTICE U/S 92CA(2) OF THE ACT TO SUPPORT THE COMPUTATION OF ALP BY THE TAXPAYER. HOWEV ER, WE DO NOT SEE ANY AUTHORITY U/S 92D(3) WITH THE T.P.O. TO REQUIRE THE TAXPAYER TO FURNISH NON SPECIFIED INFORMATION OR SUCH INFORMATION OR DOCUMENT ALREADY FILED BY THE TAXPAYER OR USE OF THE PROVISION WITHOUT ASKING THE TAXPAYER TO SUPPORT FIRST ITS A LP OF INTERNATIONAL TRANSACTIONS. THE CASE OF ANY PERSON OTHER THAN THE TAXPAYER FOR NOTICE U/S 92D(3) STANDS ON A DIFFERENT FOOTING THAN OF THE TAXPAYER TO WHOM NOTICE U/S 92CA(2) HAS BEEN ISSUED. 28. FURTHER U/S 92D(3), IT WILL NOT BE POSSIBLE TO CALL FO R, ALL THE INFORMATION PRESCRIBED UNDER RULE 10D INCLUDING SUPPORTING INFORMATION AND DOCUMENTS MENTIONED IN SUB - RULE (3) IN A ROUTINE OR A CASUAL MANNER WITHOUT APPLICATION OF MIND AS TO WHAT SPECIFIC INFORMATION IS REQUIRED TO ACHIEVE THE PURPOSE OF THE REGULATIONS. INFORMATION WHICH HAS ALREADY BEEN FURNISHED BY THE TAXPAYER EITHER IN THE AUDIT REPORT OR IN RESPONSE TO NOTICE U/S 92CA(2) WOULD BE OF NO USE AND, THERE IS NO POINT IN REQUIRING THE SAME INFORMATION AGAIN OR REQUIRE UN - PRESCRIBED INFORMATION U/S 92D(3) AND CAST ADDITIONAL BURDEN ON THE TAXPAYER. IN ALL SUCH CASES, IT WOULD NO MORE REMAIN VALID NOTICE U/S 92D(3) / 271G OF THE ACT. APPLICATION OF MIND TO FIND AND CONSIDERATION OF MATERIAL ON RECORD AND TO SEE WHAT FURTHER INFORMATION ON SPECIFI C POINT IS REQUIRED, IS ESSENTIAL BEFORE ISSUING NOTICE U/S 92D(3) OF THE ACT TO THE TAXPAYER. 5. IN VIEW OF THE ABOVE PRECEDENT, AND BEARING IN MIND ADMITTED FACTS OF THIS CASE AS SET OUT ABOVE , WE SEE NO REASONS TO INTERFERE IN THE WELL ITA NO. 561/ AHD/2010 ASSESSMENT YEAR: 2005 - 06 PAGE 4 OF 4 REASONED FIND INGS OF THE LEARNED CIT(A) . ONCE NO SPECIFIC REQUISITION HAS BEEN ISSUED UNDER SECTION 92 D(3) FOR FURNISHING OF SPECIFIC PARTICULARS, THERE IS NO QUESTION OF ITS REMAINING UNCOMPLIED WITH , AND, ACCORDINGLY, THERE IS NO OCCASION FOR IMPOSITION OF PENALTY UNDER SECTION 271 G. 6. FOR THE REASONS SET OUT ABOVE, WE APPROVE THE CONCLUSIONS ARRIVED AT BY THE CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. 7. IN THE RESULT, THE APPEAL IS DISMISSED. PRONOUNC ED IN THE OPEN COURT TODAY ON 28 TH DAY OF JUNE, 2013 SD/XX SD/XX (KUL BHARAT ) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: 28 TH DAY OF JUNE 2013. COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER , AHMEDABAD 4 . DEPARTMENTAL REPRESENTATIVE, BENCH, AHMEDABAD 5 . GUARD FILE TRUE COPY BY ORDER ETC. ASSISTANT REGISTRAR