Case Law Analysis
|Income Tax Appellate Tribunal
Section 271G IT Act | Penalty Not Leviable When ALP Is Accepted Without Adjustment and Substantial Compliance Demonstrated: ITAT Mumbai
The ITAT Mumbai has ruled that penalty under Section 271G cannot be imposed if the Arm’s Length Price is accepted without any adjustment and the assessee has demonstrated substantial compliance with transfer pricing documentation requirements under Rule 10D. This sets a critical precedent for multinational enterprises: mere technical lapses in documentation, without actual misreporting or evasion, do not justify penalty when the pricing itself is validated.