2019 (7) TMI 597 - AT - Income Tax

Penalty u/s 272A(2)(c) r.w.s. 274 - non furnishing the information called for u/s 133(6) - reasonable cause - penalty @ ₹ 100 per day of defaulting period - HELD THAT - As decided in M/S. KAKOOR SERVICE CO-OPERATIVE BANK LTD. 2018 (1) TMI 548 - ITAT COCHIN the assessee has not offered any valid reason for not furnishing the information called for u/s 133(6) of the Act. Many of the notices issued by the ITO (Intelligence) were never responded to by the assessee. In many instances the Assessing Officer has mentioned that when they had approached, the assessee Society, for seeking information u/s 133(6) of the Act there was total lack of co-operation on the part of the assessee society as well as threat (reference order imposing penalty u/s 272A(2)(c) in appeals 2018 (1) TMI 548 - ITAT COCHIN . Since there is no reasonable cause furnished by the assessee as mentioned u/s 273 of the I T Act for non furnishing of information sought by the ITO(intelligence) u/s 133(6) it is of the view that the order imposing penalty cannot be quashed. It is ordered accordingly. we hold that the CIT(A) is justified in upholding the order passed u/s 272A(2)(c) - Decided against assessee.

Issues Involved:
1. Jurisdiction of ITO (Intelligence) to issue notice under section 133(6) of the Income-tax Act.
2. Limitation period for passing the order under section 272A(2)(c) of the Income-tax Act.
3. Reasonable cause for non-furnishing information under section 133(6) and the validity of the penalty imposed under section 272A(2)(c).
4. Calculation of the penalty period.

Issue-wise Detailed Analysis:

1. Jurisdiction of ITO (Intelligence) to issue notice under section 133(6) of the Income-tax Act:
The assessee contended that the ITO (Intelligence) did not have the jurisdiction to issue notice under section 133(6) of the Income-tax Act. The Tribunal referred to the provisions of section 133(6), noting that the department has the power to call for information useful or relevant to any proceeding under the Act from any person, including a banking company or any officer thereof. The Tribunal emphasized the amendment introduced by the Finance Act, 1995, which allowed information to be called for even in the absence of a pending proceeding, provided prior approval from the Director or Commissioner was obtained. The Tribunal cited the Supreme Court's decision in Kathiroor Service Co-op Bank Ltd vs CIT (CIB) & others, which upheld the validity of such notices issued by ITO (CIB) after obtaining necessary approval. Thus, the Tribunal concluded that the ITO (Intelligence) had the jurisdiction to issue the notice under section 133(6).

2. Limitation period for passing the order under section 272A(2)(c) of the Income-tax Act:
The assessee argued that the penalty order was barred by limitation under section 275(1)(c) of the Act. The Tribunal clarified that section 275(1)(c) prescribes the time limit for imposing penalties, which is six months from the end of the month in which action for imposition of penalty is initiated. In this case, the penalty proceedings were initiated on 12.08.2014, and the penalty order was passed on 19.09.2014, well within the prescribed time limit. The Tribunal dismissed the assessee's contention, noting that the initiation of penalty proceedings is marked by the issuance of a notice under section 274, not by the notice under section 133(6).

3. Reasonable cause for non-furnishing information under section 133(6) and the validity of the penalty imposed under section 272A(2)(c):
The assessee failed to furnish the required information under section 133(6) and did not provide any valid reason for this non-compliance. The Tribunal observed that many notices issued by the ITO (Intelligence) were not responded to, and there was a lack of cooperation from the assessee. The Tribunal held that there was no reasonable cause under section 273B for the assessee's failure to provide the information, thereby upholding the penalty imposed under section 272A(2)(c).

4. Calculation of the penalty period:
The assessee contended that the penalty period calculation was incorrect, arguing that the penalty should be calculated from 01.06.2015 to 22.12.2015 instead of 30.09.2013 to 22.12.2015. The Tribunal did not address the correctness of the penalty period calculation in detail but advised the assessee to file a rectification petition before the concerned officer to rectify any mistake in the penalty calculation.

Conclusion:
The Tribunal upheld the CIT(A)'s order, validating the jurisdiction of ITO (Intelligence) to issue the notice under section 133(6), confirming that the penalty order was within the limitation period, and finding no reasonable cause for the assessee's non-compliance. The Tribunal dismissed the appeal and stay application filed by the assessee, affirming the penalty imposed under section 272A(2)(c) of the Income-tax Act.

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