ITO WARD - 16(4), New Delhi V. MAT Brakes India Private Limited, New Delhi

ITA 631/DEL/2020

AI Insights

The case involves an appeal by the Income Tax Officer (ITO) against MAT Brakes India Private Ltd. concerning a penalty under section 271(1)(c) of the Income-tax Act, 1961, related to a transfer pricing adjustment. Initially, a transfer pricing adjustment of Rs.2,23,31,862 was made, which was later reduced to Rs.1,38,07,041 following directions from the Dispute Resolution Panel (DRP). Consequently, the penalty was also adjusted from Rs.72,45,571 to Rs.44,79,693. The appeal was dismissed by the Income Tax Appellate Tribunal due to the adjusted penalty being below the CBDT's monetary threshold for filing appeals.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 115850 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 11-07-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 02-02-2020
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect
• Section: 271(1)(c); 143(3); 144C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : I : DELHI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No.631/Del/2020 Assessment Year: 2013-14 ITO, Ward-16(4), New Delhi. Vs MAT Brakes India Private Ltd., Suite No.311, Vardhman Diamond Plaza, DB Gupta Road, Paharganj, New Delhi. PAN AAGCM9838B (Appellant) (Respondent) Assessee by : Shri Deepak Kataria, AR Revenue by : Shri Manu Chaurasia, Sr. DR Date of Hearing : 12.07.2023 Date of Pronouncement : 26.07.2023 ORDER PER M. BALAGANESH, AM: This appeal in ITA No.631/Del/2020 for AY 2013-14 arises out of the order of the Commissioner of Income-tax (Appeal)-44, New Delhi, in Appeal No.208/2018- 19/CIT(A)-44 dated 29.11.2019 [hereinafter referred to as ‘ld. CIT(A)’, in short] against the order of assessment passed u/s 143(3) r.w.s. 144C of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 13.06.2017 by the ld. Income- tax Officer, Circle 16(2), New Delhi (hereinafter referred to as ‘ld. AO’). ITA No.631/Del/2020 2 2. At the outset, we find that this appeal of the Revenue requires to be dismissed on the ground of low tax effect. We find that this appeal is against the penalty levied u/s 271(1)(c) of the Act. We find that the ld. AO, in the original assessment completed, made transfer pricing adjustment of Rs.2,23,31,862/-. Pursuant to the directions issued by the ld. Dispute Resolution Panel (DRP), this transfer pricing adjustment was brought down to Rs.1,38,07,041/-. In fact, the revision order has already been passed by the ld. AO on 27.04.2018. While this is so, the ld. AO was not justified in levying penalty u/s 271(1)(c) of the Act on the addition of Rs.2,23,31,862/-. In respect of the transfer pricing adjustment of Rs.2,23,31,862/-, the ld. AO had levied penalty u/s 271(1)(c) of the Act in the sum of Rs.72,45,571/-. Once the transfer pricing adjustment gets reduced to Rs.1,38,07,041/-, the corresponding penalty would work out to Rs.44,79,693/- which would eventually be less than the monetary limit prescribed by the CBDT for preferring appeal before this Tribunal by the Revenue, vide Circular No.17/2019 dated 8th August, 2019. Hence, we deem it fit to dismiss the appeal of the Revenue as not maintainable on the ground of low tax effect. 3. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 26.07.2023. Sd/- Sd/- (SAKTIJIT DEY) (M. BALAGANESH) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 26 th July, 2023. ITA No.631/Del/2020 3 dk Copy forwarded to 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi