Sequence Design Vs JCIT (ITAT Pune)
ITAT Pune held that penalty under section 271AA of the Income Tax Act is not imposable in view of section 273B of the Act since there was a reasonable cause for not reporting the said transaction in Form No. 3CEB as it was not considered to be an international transaction. Accordingly, appeal allowed.
Facts- The main grievance of the assessee is that ld.CIT(A) erred in confirming the penalty of Rs.26,59,958/- levied by JCIT u/s.271AA of the Act for the alleged violation of requirement of section 92D(1) of the Act as the assessee failed to report the transaction in Form 3CEB in respect of reimbursement from (Associate Enterprise) amounting to Rs.4,07,42,345/-.
Conclusion- Held that we notice that firstly the assessee has maintained complete information and documents about the alleged transaction and the allegation on the assessee is that the said transaction is not reported in Form No.3CEB in its report prepared by the Auditor to be furnished under 92A of the Act relating to the international transaction. Now as per the discussion made above, we find that the alleged sum of Rs.4,07,42,345/- is basically in the nature of reimbursement of the amout received through debit notes for A.Y. 2009-10 to A.Y. 20 14-15. In the given circumstances, it is quite possible that the Auditor did not treat it as an international transaction and has not mentioned in Form No.3CEB report. Further, 273B of the Act is clearly applicable in the instant case because for the alleged failure there was a reasonable cause on the part of assessee for not reporting the said transaction as it was not considered to be an international transaction. Under these given facts and circumstances where the transaction is alleged to have not been reported by the assessee in Form No.3CEB, we find the AO erred in visiting the assessee with penalty u/s.271AA of the Act without considering the fact that assessee has already offered the income in the preceding years and has excluded the same from the income declared during the year and the said amount was calculated on the directions of the DRP for A.Y. 2009-10 to A.Y. 20 14-15 and therefore the said transaction is not in the nature of new international transaction which is required to be reported in Form No.3CEB. Therefore, no penalty is leviable u/s.271AA of the Act and even the assessee deserves immunity from the levy of such penalty in view of section 273B of the Act. Impugned order is reversed and the grounds of appeal raised by the assessee are allowed.
