No penalty u/s 271(1)(c) as ALP recomputed by TPO was invalid as assesee followed prescribed method (TNMM) u/s 92C

Schaeffler India Ltd Vs ACIT (ITAT Ahmedabad) Conclusion: Penalty under section 271(1)(c) was not to be levied as Explanation 7 to section 271(1)(c), which specifically governs penalty in transfer pricing cases, was neither invoked during the initiation nor discussed while levying the penalty and  neither TPO nor CIT(A) ever held that the ALP was computed outside the statutory provisions, or that the study report lacked diligence or was not prepared in good faith. Held: The penalty under section 271(1)(c) was imposed in connection with a Transfer Pricing adjustment of Rs. 17.15 crore made in ...