2018 (3) TMI 1173 - AT - Income Tax

Penalty u/s.271FA - delay filing on AIR - Held that - Appellant is a Govt. servant and AR stated that they have assigned job to submit AIR to some outsources agency and sometime staff of the outsources agency become careless. In these case, appellant is a newly incumbent with the office and was not aware of the income tax provisions. Moreover, department authority did not inform in above said responsibilities of during the same. Moreover, income tax was paid on time therefore, no loss to the revenue. In our considered opinion, appellant was having reasonable cause for delay filing on AIR and in our opinion benefit of section 273B should be given to the appellant. Therefore, we delete the penalty in all above said three appeals. - Decided in favour of assessee

Summary

Issues:
Appeals against penalty u/s.271FA for AY 2015-16 - Whether penalty justified due to delay in furnishing annual information return.

Analysis:
In three appeals, the appellant challenged penalties imposed under section 271FA for Assessment Year 2015-16 by the Director of Income Tax (I&CI), Ahmedabad. The main contention was the imposition of penalties for delays in filing annual information returns. The department argued that penalties were justified, while the appellant claimed there was a reasonable cause for the delays.

ITAT's Decision:
The ITAT decided to consolidate all three appeals due to the commonality of issues. The appellant, a government servant, had outsourced the task of submitting annual information returns and cited the newly recruited staff's lack of awareness of tax provisions as a reason for the delays. The appellant argued that timely tax payments were made, and there was no revenue loss.

Reasoning for Deletion of Penalties:
The ITAT, considering the circumstances, found that the appellant had a reasonable cause for the delay in filing the annual information returns. The tribunal invoked section 273B, which provides relief in cases of genuine reasons for delays. Consequently, the penalties imposed by the Director of Income Tax were deemed unjustified and were deleted in all three appeals.

Conclusion:
Ultimately, the ITAT allowed all three appeals, ruling in favor of the appellant and deleting the penalties imposed under section 271FA for the Assessment Year 2015-16. The decision was based on the appellant's reasonable cause for the delays in filing the annual information returns, as per the provisions of section 273B.