2013 (6) TMI 865 - AT - Income Tax

Summary

Issues Involved:
1. Penalty u/s 271FA for non-filing of AIR within the prescribed time.
2. Applicability of penalty on a State Government entity.
3. Reasonable cause for non-filing of AIR.
4. Validity of advisory letter as notice u/s 285BA(5).
5. Impact of no loss to the department due to late filing.
6. Consideration of nominal entries in AIR filing.

Summary:

1. Penalty u/s 271FA for non-filing of AIR within the prescribed time:
The Tribunal upheld the penalty imposed u/s 271FA of the Income Tax Act, 1961, for non-filing the Annual Information Return (AIR) within the time prescribed u/r 114E(5) of the Income Tax Rules, 1962. The Tribunal emphasized that filing of AIR is mandatory under section 285BA(1) and there is no exception to this requirement.

2. Applicability of penalty on a State Government entity:
The assessee argued that as a part of the Revenue Department of the State of Punjab, the penalty should not be imposed on the State Government. However, the Tribunal did not accept this argument and upheld the penalty.

3. Reasonable cause for non-filing of AIR:
The assessee claimed a bona fide belief that the AIR for the whole district was to be filed by the Registrar of the Ferozepur District. The Tribunal rejected this argument, noting that there was no document placed before any of the authorities to support the claim that there was no case of registration in the said years.

4. Validity of advisory letter as notice u/s 285BA(5):
The assessee contended that the advisory letter issued on 20.11.2006 could not be considered as notice u/s 285BA(5) of the Income Tax Act, 1961. The Tribunal found that the advisory letter and subsequent notices were served on the assessee, and the argument that no notice was served was rejected.

5. Impact of no loss to the department due to late filing:
The assessee argued that no loss was caused to the department due to the late filing of the AIR, and hence, the penalty should be quashed. The Tribunal held that the mere violation of the filing requirement justifies the levy of penalty, as it is not automatic but discretionary.

6. Consideration of nominal entries in AIR filing:
The assessee pointed out that there were only nil entries in the relevant assessment years and cited a similar case where the penalty was dropped. The Tribunal noted that the nominal number of registrations exceeding Rs. 30 lacs still required the filing of AIR, and no relief could be given on this issue.

Conclusion:
The Tribunal dismissed all the appeals, confirming the penalties imposed for non-filing of AIR within the prescribed time. The decision emphasized the mandatory nature of AIR filing and rejected the arguments related to reasonable cause, advisory notice validity, and the impact of nominal entries.