2010 (6) TMI 804 - AT - Income Tax

Summary

Issues involved: The judgment involves the confirmation of penalty u/s 271BA of the Income Tax Act by the Ld. Commissioner of Income Tax (Appeals) for the assessment year 2006-07.

Details of the judgment:

1. Issue of Penalty u/s 271BA:
The Assessing Officer noted the non-filing of the Chartered Accountant's Report in Form No. 3CEB relating to International transactions along with the return of income by the due date. The penalty proceedings were initiated, despite the assessee's contentions that the report was obtained in time but could not be filed due to online filing without attachments. The Ld. Commissioner of Income Tax (Appeals) upheld the penalty, citing the decision in the case of C.I.T. vs. Escorts Finance. However, the Tribunal found that the assessee had a reasonable cause for the delay in filing the report, as it was obtained before the due date and provided to the Assessing Officer before the assessment was completed. Relying on the Apex Court decision in Hindustan Steel vs. State of Orissa, the Tribunal held that penalty should not be imposed for a technical breach when there is a genuine belief of non-liability. Consequently, the Tribunal set aside the penalty of &8377; 1,00,000 imposed u/s 271BA.

2. Legal Provisions Considered:
The Tribunal referred to sections 92E and 271BA of the Income Tax Act, which mandate obtaining and filing an Audit Report for international transactions. Section 273B provides for no penalty if there is a reasonable cause for non-compliance with the provisions. The Tribunal emphasized that in this case, the assessee had a valid reason for not filing the report along with the return, as it was obtained before the due date and provided to the Assessing Officer in due course.

3. Precedent and Conclusion:
In light of the legal provisions and the precedent set by the Apex Court, the Tribunal concluded that the penalty was not justified in this case. The Tribunal allowed the appeal filed by the assessee and deleted the penalty of &8377; 1,00,000. The order was pronounced in the open court on 15/06/2010 upon the conclusion of the hearing.