High Court’s Admission of PE Dispute Shows Issue Debatable – ITAT Cancels Penalty

Redington Distribution Pte. Ltd. Vs ACIT (ITAT Chennai) Assessee, a Singapore-based subsidiary of Redington (India) Ltd., filed appeals against penalty levied u/s 270A(2) for alleged under-reporting of income attributable to its alleged PE in India. A survey u/s 133A at Redington (India) Ltd. in Dec 2017 revealed a “Dollar Business” team handling USD transactions for Indian customers. AO concluded that Assessee had both fixed place & dependent agent PE in India. Substantial profits (nearly 90%) were attributed to such PE across AYs 2017-18 to 2020-21, resulting in large additions. Thes...