2021 (11) TMI 39 - AT - Income Tax

Levying penalty u/s 271F - failing to file SFT-014 for assessment year 2017-18 for which the last data was expired on 31st Jan, 2016 - HELD THAT - The amount of penalty was computed as per the provision of section 271FA. We do not find any merit in the plea of the assessee stating that it was unaware about the filing of impugned statement. Regarding the contention of the assessee that it had not received the notices reported in the penalty order, it is observed that the ld. DIT(I IC) has also not mentioned the date of serving the two notices dated 11-04-2017 1-6-2017 upon the assessee. We hold that penalty of ₹ 25,800/- (258 days x ₹ 100 per day) on the assessee will be justified. Accordingly, the appeal of the assessee is partly allowed. Appeal of the assessee is partly allowed.

Summary

Issues:
Penalty under section 271FA of the Income Tax Act, 1961 for failure to file SFT-014 for assessment year 2017-18.

Analysis:
The appeal before the Appellate Tribunal ITAT Ahmedabad pertained to the penalty imposed under section 271FA of the Income Tax Act, 1961. The penalty of ?73,000 was levied on the assessee for failing to file the SFT-014 for the assessment year 2017-18 within the stipulated timeline. The Director of Income Tax (I & CI) issued notices on 11th April, 2017, and 1st June, 2017, warning of the penalty if the SFT-014 was not filed. The penalty was calculated at ?500 per day starting from 21st June, 2017, resulting in the total penalty amount of ?73,000.

During the appellate proceedings, the assessee contended that they were unaware of the non-filing of the SFT return for the relevant financial year and only became aware of it upon receiving a notice from the Income Tax office. The return was filed electronically after receiving the notice. The assessee claimed that the premises were under renovation from January 2017, and hence, the notices from the Income Tax office were not received. The Departmental Representative supported the penalty imposed by the Director of Income Tax.

After considering the arguments from both sides and examining the facts, the Tribunal observed that the assessee, being a cooperative bank, was obligated to file the SFT return under section 285BA of the Act. The penalty was imposed for the delay in filing the return, and it was found that the assessee had indeed failed to comply with the statutory requirement. The Tribunal noted that the Director of Income Tax did not specify the dates of serving the notices to the assessee. Consequently, the Tribunal reduced the penalty amount to ?25,800 (258 days x ?100 per day) from the original penalty of ?73,000. The Tribunal partially allowed the appeal of the assessee, concluding the judgment on 25th October 2021.