2019 (6) TMI 1058 - AT - Income Tax

Penalty u/s 271FA - non filing of Annual Information Return - HELD THAT - As decided in SUB REGISTRAR JAORA VERSUS DIRECTOR OF INCOME TAX (I CI) , BHOPAL 2019 (5) TMI 1059 - ITAT INDORE Section 273B provides for not levying penalty in certain cases if the assessee proves that there was a reasonable cause for the failure. This section also refers to the penalty of Section 271FA of the Act. Reference was made to various correspondences with the Chief Secretary, Govt. of Madhya Pradesh, Department of Commercial Taxes and Chief Commissioner of Income Tax as well as Secretary, Finance Department of Revenue which talks about the technical problem due to which non integration of the departments portal with the Income Tax Departmental portal for PAN authentication was not achieved. This problem was solved at later stage and finally assessee filed Annual Information Report for financial year 2014-15 on 14.12.2017. Certainly there was a delay but there was reasonable cause for such delay. On examining the facts of the instant appeal in the light of the above decision we find that the issue is squarely covered by this decision and Ld. Departmental Representative failed to bring any contrary material. We therefore sustain the penalty of ₹ 9,700/- u/s 271FA of the Act and delete the remaining amount of penalty of Rs,3,41,800/- and partly allow the assessee s appeal - Appeal of the assessee is partly allowed.

Summary

Issues:
Levy of penalty under section 271FA for non-filing of Annual Information Return (AIR) for Assessment Year 2014-15.

Analysis:
1. Grounds of Appeal: The assessee challenged the penalty of ?3,51,500 imposed by the Ld. Director of Income Tax(I&CI) under section 271FA. The grounds included contentions that the penalty was unjustified, arbitrary, and lacked proper opportunity for hearings. The appellant reserved the right to modify the grounds of appeal.

2. Factual Background: The assessee, a local authority under the State Government of Madhya Pradesh, failed to submit Form 61B for the financial year 2014-15 by the extended due date of 10.9.2015, as required by Section 285BA of the Income Tax Act 1961. Despite notices and opportunities given, the assessee did not comply, leading to the penalty imposition.

3. Comparison with Precedent: The Ld. Counsel for the assessee cited a similar case before the Co-ordinate Bench to argue for applying the decision in the instant appeal. The Co-ordinate Bench had sustained a penalty of ?9,700 in a comparable case involving non-filing of AIR by a local authority, emphasizing the obligation to furnish the required information.

4. Decision and Rationale: After considering the arguments and records, the Tribunal found that the issue in the current appeal was akin to the precedent case. The penalty was reduced to ?9,700, aligning with the earlier decision. The Tribunal noted the absence of contrary evidence from the Ld. Departmental Representative and upheld the penalty based on the reasonable cause for the delay in filing the AIR.

5. Conclusion: The Tribunal partly allowed the assessee's appeal, sustaining the penalty at ?9,700 under section 271FA while deleting the remaining amount. The decision was pronounced in open court on 20.06.2019, concluding the matter related to the penalty for non-filing of the Annual Information Return for the specified assessment year.