Jai Jawan Coal Carriers (P) Ltd., Delhi V. DCIT Circle-13(1), New Delhi

ITA 8810/DEL/2019

AI Insights

The case involves M/s. Jai Jawan Coal Carriers (P) Ltd., which appealed against a penalty imposed by the Assessing Officer under Section 271AA for not maintaining and reporting information on specified domestic transactions as required under Section 92D. The transactions in question amounted to Rs.5,95,59,636 and were with persons specified under Section 40A(2)(b), falling under the purview of Section 92BA and consequently the Transfer Pricing (TP) regulations applicable to domestic transactions. The Assessing Officer alleged non-compliance with the statutory requirements of maintaining and keeping information and documents for these transactions. The CIT(A) upheld the penalty, leading to the appeal before the Tribunal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121577 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-01-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 19-12-2022
• Assessment Year: 2013-2014
• Appeal Filed On: 12-11-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 273B; 92D; 92E

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C” DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A No.8810/DEL/2019 Assessment Year 2013-14 M/s. Jai Jawan Coal Carriers (P) Ltd., G-201, Preet Vihar, New Delhi. v. DCIT, Circle-13(1), New Delhi. TAN/PAN: AAACJ0202A (Appellant) (Respondent) Appellant by: Shri Basant Kumar, Adv. Shri Prabhat Kumar, CA Respondent by: Shri Anuj Garg, Sr.DR Date of hearing: 20 12 2022 Date of pronouncement: 27 01 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: The captioned appeal has been filed by the Assessee seeking to challenge the penalty i mposed a mo unting to Rs.11,91,190/- by the Assessing Officer under Section 271AA of the Act vide order dated 31.05.2017 and sustained by the CIT( A)- V, Ne w Delhi vide order dated 13.09.2019 for the Assess ment Year 2013-14. 2. Briefl y stated, t he assessee-co mpany in the relevant assessment yea r 2013-14 was engaged in the business of transportation / wagon loading of iron ore from mini ng area to railwa y sides. In the relevant assess ment ye ar, the assessee I.T.A No.8810/Del/2019 2 entered into certain transactions worth Rs.5,95,59,636/- with person specified under Section 40A(2)(b) which is stated to be covered under the purview of Section 92BA of the Inco me Tax Act and consequently is covered by TP regulations applicable to domestic transactions. The Assessing Officer while fr a ming the assessment alleged that the assessee has not complied with the statutory require ment of maintenance and keeping of infor mation and docu ments for entering into specified domestic transactions and reporting thereof. It was alleged tha t assessee has not filed form 3CEB by the Specified date in this regard and it is not ascertainable as to whether the assessee had maintained such information and documents as required by Section 92D of the Act and whether the conte mporaneous documents existed as on the specified date referred to in clause (iv) of Section 92D. The Assessing Officer consequently invoked the provisions of Section 271AA for failure to maintain the relevant records and i mposed a penalty of Rs.11,91,190/- being 2% of the value of specified domestic transaction value of Rs.5,95,59,536/- vide penalty order dated 31.05.2017 passed under Section 271AA of the Act. 3. Aggrieved by the imposition of penalty, the assessee preferred appeal before the CI T(A) without any avail. The CIT( A) vide order dated 13.09.2019 upheld the action of the Assessing Officer and sustained the penalty. 4. Further aggrieved, the assessee preferred appeal before the Tribunal. 5. We have considered the rival submissions. The i mposition I.T.A No.8810/Del/2019 3 of penalty b y invoking Section 271AA in respect of Specified Do mestic Tr ansactions is in issue. The penalty has been imposed on the ground that Audit Report under Section 92E in for m 3CEB was not fi led before the specified date. The assessee contends that; (i) the Specified Do mestic Tr ansactions were inserted within the a mbit of Section 271AA b y Finance Act, 2012 w.e .f. 01.04.2013 and thus applicable to Assessment Year 2013-14 onwards and hence Assessment Year 2013-14 is the first yea r req uiring maintenance of records stipulated under Section 92D of the Act. (ii) the requisite infor mation were duly provided to the Assessing Officer and no TP adjustments we re eventually suggested in the TPO order passed under Section 92CA(3) of the Act dated 17.10.2016 and hence no mala fide can be attributable to the assessee. (iii) the imposition of penalty under Section 271AA is discretionary in nature and thus penalty is not automaticall y lia ble to be impos ed particularly where reasonable cause exists in ter ms of Section 273B of the Act. 6. We find justifiable merit in the plea of the assessee. We note that the Assess ment Yea r 2013-14 was the first year where the provisions of Section 92D came into force. C oupled with this, the TPO has accepted the Arm’s Length Price declared by the assessee without any adjust ment and thus non submission of I.T.A No.8810/Del/2019 4 TP study report / or delinquency in maintenance of records if any within ti me is to be construed as merel y a breach of technical nature. Notwithstanding, the requisite information was made available at the ti me of assess ment and therefore, substantial compliance of Section 92D has been carried out without any grave prejudice to revenue. It is further noticed that no specific allegation is found as to what documents and infor mation has not been maintained, which ought to have been maintained. In the totality, we find that imposition of penalty is not justified in the circu mstances exi sting in the case. 7. In the result, the a ppeal of the assessee is allowed. Order pronounced in the open Court on 27/01/2023. S Sd/- Sd/- [KUL BHARAT] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /01/2023 Prabhat Copy forwarded to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR Assistant Registrar