2023 (7) TMI 1262 - AT - Income Tax

Penalty u/s 271I - Penalty for failure to furnish information or furnishing inaccurate information u/s 195 - non-furnishing of Form 15CA - HELD THAT - Apparently there was conflict between section 195 and rule 37BB regarding the compliance of Form 15CA, which was later on amended by the government by Notification No. G.S.R. 978(E) dated 16th December, 2015. Since, the remittances which were made, were against the import of goods and does not attract the provision of withholding tax and the requirement to furnish the details u/s 195(6) r.w. Rule 37BB is not mandatory. Therefore, CIT(A) correctly held that there is lack of clarification of words expressively in the provisions, and only during this assessment year and no express specification have been made for penalty for each default. The Income Tax Rules were amended w.e.f. from 16/12/215, in which the list of payments of specified nature mentioned in Rule 37BB, which do not require submission of Forms 15CA and 15CB, has been expanded from 28 to 33. The amendment though came into effect from 16th December 2015, but it is a settled law that if a statute is curative or merely declaratory of the previous law, retrospective operation is generally intended. CIT(A) held that the penalty provisions u/s 271-I of the Act will not be applicable in the case and therefore CIT(A) deleted the same. As gone through the above findings of ld CIT(A) and noted that there is no infirmity in the conclusion reached by ld CIT(A). That being so, we decline to interfere with the order of Id. CIT(A) in deleting the aforesaid additions. Decided in favour of assessee.

Summary

Issues Involved:
The judgment involves issues related to the penalty imposed under section 271-I of the Income Tax Act, 1961 for non-furnishing of Form 15CA/15CB in the assessment year 2016-17.

Detailed Summary:

1. Grounds of Appeal by Revenue:
The Revenue appealed against the order of the Commissioner of Income Tax (Appeals) regarding the penalty imposed under section 271-I of the Income Tax Act, 1961. The grounds of appeal raised by the Revenue questioned the deletion of the penalty and the applicability of the Notification of the C.B.D.T. No. G.S.R.978(E) dated 16.12.2015.

2. Assessment and Penalty Imposition:
The assessing officer observed that the assessee failed to provide Form 15CA for 70 transactions of foreign remittance made between 1.06.2015 to 31.03.2016. The penalty provision under section 271-I of the Act was applied, and a penalty of Rs. 70,00,000 was imposed. The assessee contested this penalty imposition.

3. Decision of CIT(A) and Arguments:
The Commissioner of Income Tax (Appeals) deleted the penalty, stating that the remittances made were against the import of goods and did not attract withholding tax provisions. The Revenue argued that the Notification No. G.S.R. 978(E) dated 16.12.2015 was not applicable to the period in question.

4. Arguments by Assessee and CIT(A) Decision:
The assessee defended the deletion of the penalty, emphasizing that there was a conflict between section 195 and rule 37BB regarding Form 15CA compliance. The CIT(A) held that the penalty provisions were not applicable due to the lack of clarity in the provisions and the subsequent amendments.

5. Final Decision and Conclusion:
After considering all submissions, the Tribunal upheld the CIT(A)'s decision to delete the penalty. It was noted that the remittances were against the import of goods and did not require Form 15CA/15CB submission. The amendments in Rule 37BB, effective from 16.12.2015, expanded the list of exempt payments. The Tribunal concluded that the penalty provisions were not applicable, and the Revenue's appeal was dismissed.