ITAT Deleted Penalty as Delay in Filing Documents with TPO Was Due to Non-Availability of Authorized Representative

Case Details: Total Energies Marketing Services v. Dy. CIT - [2024] 165 taxmann.com 698 (Mumbai-Trib.)

Judiciary and Counsel Details

• Narender Kumar Choudhry, Judicial Member & Ratnesh Nandan Sahay, Accountant Member
• Ketan Ved, A.R. for the Appellant.
• Ms Dhivya Ruth J., Sr. DR. for the Respondent.

Facts of the Case

In the instant case, in response to the notice issued under 92D(3), the assessee submitted its reply and claimed that the assessee company was in the process of appointing their authorised representative and, therefore, the assessee needed time to submit the details. The assessee neither attended nor filed any details until the statutory time limit of 60 days was completed.

Consequently, penalty proceedings under section 271G were initiated under section 274A, read with section 271G for non-compliance to the notice under section 92D(3).

In response to the penalty proceeding notice, the assessee submitted part details such as form 3CEB, a copy of the return of income, a copy of the inter-company agreement, and the inter-company invoices.

The Assessing Officer, unsatisfied with the assessee’s submissions, ultimately levied a penalty under section 271G. CIT(A) confirmed the penalty, and the matter reached before the Mumbai Tribunal.

ITAT Held

The Tribunal held that the assessee was a foreign-based company and was in the process of appointing a new authorised representative. The assessee sought further time by filing its letter dated 04.01.2019, but the AO extended the time to 10.01.2019, admittedly a shorter period, which resulted in non-compliance.

However, subsequently, the assessee complied with the notices by filing relevant details specifically on 25-03-2019. Accordingly, the reasons submitted for non-compliance by the assessee prima facie appear to be bonafide and unintentional. Therefore, considering the reasons for the minuscule delay in filing the relevant documents as reasonable and negligent, the penalty was deleted.

List of Cases Referred to

• M/s. Excel Biolife Private Limited v. National Faceless Appeal Center ITA No.122/M/2024 (para 4)
• ACIT v. Eurostar Diamonds India (P.) Ltd. [2024] 158 taxmann.com 410/205 ITD 324 (Mumbai – Trib.) (para 4).