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2023 (8) TMI 638 - AT - Income TaxPenalty u/s 271FAA - furnishing inaccurate statement of financial transaction or reportable account - HELD THAT - In this case, the Prescribed Authority has notified the discrepancies vide his letter to the Reporting Entity to rectify the defects and accordingly, the revised/rectified Form 61-B was filed on 13.04.2021, 13.04.2021 and 15.04.2021 for the CY 2017, 2018 and 2019 respectively, which appears to be well within the time allowed u/s 285BA(4) of the Act. Therefore, CIT(A) was not correct in confirming the order of the Prescribed Authority that the assessee has not rectified the defects within time. Provisions of sub-section (4) of section 285BA of the Act mandate that the defect should be rectified within a period of one month from the date of such intimation and in the present case, the Reporting Entity has rectified the defects within the time limit as provided u/s 285BA(4) - In view of the above, we set aside the order passed by the ld. CIT(A) and delete the penalty levied under section 271FAA - Appeals filed by the Reporting Entity are allowed.
Issues Involved:
1. Levy of penalty under section 271FAA of the Income Tax Act, 1961. 2. Compliance with section 285BA(4) of the Income Tax Act, 1961. 3. Accuracy and timeliness of filing Form 61-B. Summary: Issue 1: Levy of penalty under section 271FAA of the Income Tax Act, 1961 The Prescribed Authority levied a penalty of Rs. 50,000/- for each calendar year (2017, 2018, and 2019) under section 271FAA of the Act for filing inaccurate Statements of Reportable Accounts. The Reporting Entity failed to report 16 accounts in the statements filed for CY 2017, 2018, and 2019. The discrepancy was brought to the notice of the Reporting Entity, which subsequently rectified and furnished the details. However, the penalty was levied because the rectification was done only after the omission was pointed out by the Department. Issue 2: Compliance with section 285BA(4) of the Income Tax Act, 1961 The Reporting Entity argued that the defects were rectified and revised/rectified Form 61-B was filed within the time allowed under section 285BA(4) of the Act. The Tribunal found that the Reporting Entity rectified the defects within the period allowed by section 285BA(4), which mandates that the defect should be rectified within a period of one month from the date of intimation. The revised forms were filed on 13.04.2021, 13.04.2021, and 15.04.2021 for CY 2017, 2018, and 2019 respectively, within the allowed time. Issue 3: Accuracy and timeliness of filing Form 61-B The Reporting Entity contended that the inaccuracies were due to a software bug and that the revised/rectified Form 61-B did not contain inaccurate information. The Tribunal noted that the Reporting Entity had rectified the defects within the time limit provided under section 285BA(4) of the Act. Therefore, the Tribunal set aside the order of the ld. CIT(A) and deleted the penalty levied under section 271FAA of the Act for the assessment years 2018-19, 2019-20, and 2020-21. Conclusion: The Tribunal allowed the appeals filed by the Reporting Entity, setting aside the penalty orders under section 271FAA of the Act for the assessment years 2018-19, 2019-20, and 2020-21. The Reporting Entity had complied with the rectification requirements within the stipulated time under section 285BA(4) of the Act.
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