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TMI Blog2013 (10) TMI 1512X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. CIT (A) is not justified in concurring with the action of the A.O. in upholding the penalty levied u/s 271FA of the Income Tax Act, 1961 without passing a speaking order and without appreciating the facts of the present case which is against the established principles of law, so that so the orders of ld. CIT (A) are illegal, arbitrary and bad in law. 2. That the Ld. CIT (A) is not justified in concurring with the A.O. and thereby confirming the levy of penalty without considering the fact that it is a case of Government Undertaking and there being no mala fide intentions or intentional mistake or delay but for reasonable cause and there being only Technical Breach and also there being no Revenue Loss to the Department and thus the orders of CIT (A) are bad in law and requires due consideration by this Hon'ble Bench. 3. That without prejudice to above the appellant disputes the very findings of the A.O. and its confirmation by the ld. CIT (A) without appreciating the facts and circumstances, evidences on record which is also against the principles of Natural Justice. 4. That without prejudice to above the appellant disputes the quantum of penalty so levied as highl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in time. In reply the assessee claimed that the officials of the Sub-Registrar Department had no knowledge of the provisions of section 285BA of the Act, which had required the Sub Registrar/s to submit AIRs in form No. 61A in respect of the transaction registered/recorded for purchase and sale of immovable property valued at ₹ 30 lacs or more during any financial year beginning on or after 1.4.2004. The plea of the assessee was that though ignorance of law was no excuse in legal proceedings but such major changes were not brought to the knowledge. Further claim of the assessee was that it did not have any PAN or a TAN till 01.10.2010 on which date the application was made with NSDL for the allotment of TAN. 6. The DIT (CIB) after considering the explanation of the assessee observed that the same was not acceptable in view of the following : (i) One main contention raised by the Filer is that it was not aware about the I.T, provisions with regard to filing of AIRs with NSDL. This contention of the Filer is not acceptable as the provisions regarding filing of AIR were/are applicable since financial year 2004-05. Moreover, ignorance of law is not an excuse for not compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in time is of no help to the appellant since furnishing of AIR by due date is a mandatory requirement of law. The appellant i.e. the Sub Registrar, Jagadhri, Yamuna Nagar has been filing AIRs late for the last three years i.e. right from Financial Year 2006-07 to 2008-09. The appellant did not bother to respond to any advisory letters which were issued from the office of the DIT(CIB) on 29.11.2006, 13.09.2006, 22.09.2009. These facts make the appellant a habitual defaulter without any concern/respect for the law of the land. Mens rea and mala fide in late filing of AIR for levy of penalty are thus; established beyond doubt. In these circumstances suitable penalty as per law is leviable on the appellant. Therefore the penalty levied under section 271FA @ 100/-per day for default for delay in filing AIR information by the DIT(CIB) is confirmed. 9. Shri S.K. Mukhi, ld. counsel for the assessee pointed out that penalty under section 271FA of the Act was levied relating to assessment years 2006-07 to 2009-10. The contention of the ld. counsel for the assessee was that the assessee had filed the AIR information manually as it had no TAN and later on, the said returns of income w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT (CIB). 13. In relation to the financial year 2007-08, penalty under section 271FA of the Act has been levied for a delay of 813 days since the requisite details were filed in the prescribed form through duly appointed agency on 22.11.2010. The assessee, however, claims that the requisite information was filed in the form of CD before the office of the DIT (CIB) on 02.07.2009 in response to notice dated 22.06.2009 as per the copy of the notice enclosed at page 9 of the Paper Book. As per the assessee, there was delay of only 304 days and not 819 days as held by the DIT(CIB). 14. Further, in respect of financial year 2008-09, penalty had been levied for a delay of 448 days as the information was filed through the appointed agency on 22.11.2010. The assessee claims to have filed the information in CD before the office of DIT(CIB) on 02.07.2009 in response to notice dated 22.06.2009 placed at page 9 of the Paper Book. The information having been filed before 31.08.2009, the claim of the assessee was that there was no delay in filing the information. 15. In respect of the delay in each of the year, the ld. AR for the assessee pointed out that there were frequent transfers in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the first advisory letter was issued by the Department to the assessee on 29.11.2006 and the CIT(Appeals) at page 5 has given a finding that the first advisory was issued on 29.11.2006. The assessee having failed to comply with the provisions of the Act is eligible for levy of penalty under section 271FA of the Act. It was further pointed out by the ld. DR for the revenue that under section 285BA of the Act read with Rule 114E of the IT Rules, the assessee was to furnish the requisite information in form No. 61A. As per the ld. DR for the revenue, law had specified certain acts to be done in specified manner. Opposing the contention of the ld. AR for the assessee that TAN was not available and hence, the delay, it was pointed out that such plea cannot be accepted. Reliance was placed on Biharilal Jaiswal v. CIT [1996] 217 ITR 746/84 Taxman 236 (SC) and Maddi Venkataraman Co. (P.) Ltd. v. CIT [1998] 229 ITR 534/96 Taxman 643 (SC) for the proposition that one arm of law cannot be used to subvert the provisions of law. The ld. DR stressed that the application for issue of TAN had to be made by the assessee but that in-turn does not mean that no compliance would be made to the oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trar, Jagadhari, Distt. Yamuna Nagar may be adopted for adjudicating the issue. Our attention was drawn to the chart furnished at page 2 of Paper Book No. 2 under which it was claimed that the manually returns were filed before filing the returns through the appointed agency. The ld. DR for the revenue in response pointed out that the first advisory letter was issued on 29.11.2006 and the CIT(Appeals) has also given a finding in this regard at page 5 of the appellate order, but the assessee failed to comply with the said advisory letter and had further delayed in furnishing the requisite information. Reliance was placed on the ratio laid down by Amritsar Bench of the Tribunal in the case of Sub Registrar v. DIT (CIB) [ITA Nos. 261 to 265(Asr)/2013 A.Y. 2005-06 to 2009-10 and Sub Registrar v. DIT (CIB), ITA Nos. 266 to 270/Asr)/2013 A.Y. 2005-06 to 2009-10, order dated 27.06.2013] which in turn had followed the ratio laid down in ITA Nos. 137 to 140/Asr/2013 order dated 30.05.2013 by the ld. DR for the revenue. 21. The ld. AR for the assessee in ITA Nos. 89 to 92/Chd/2012 pointed out that under the provisions of section 285BA(i) of the Act, it is prescribed that the information m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax (Central Information Branch) or the authority/agency prescribed under the Act i.e. NSDL. The Annual Information Return referred to in sub-section (1) to section 285BA of the Act, as per sub-section (2) is to be furnished on or before 31st August immediately following the financial year in which the transaction was registered or recorded, in Form No.61A, as prescribed under Rule 114E of the Income Tax Rules. Sub-section (3) defines specified financial transaction, which may be prescribed under the Act. The Board has given authority to prescribe different values for different transactions in respect of different persons, having regard to the nature of said transaction. Under Sub-section (4) where the prescribed income tax authority considers the Annual Information Return furnished under sub-section (1) to be defective, then such defects are to be intimated to the prescribed person and an opportunity is to be allowed for rectifying the same within the specified/ extended period. In case said defects are not removed within the prescribed or extended period then such returns would be treated as an invalid return and the provisions of the Act would apply as if the person had fail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocuments containing a record of any specified financial transaction, under any law for the time being in force, to furnish an annual information return, in respect of such specified financial transaction which is registered or recorded by him during any financial year beginning on or after the April 1, 2004, and information relating to which is relevant and required for the purposes of the Act to the prescribed income-tax authority or such other authority or agency as may be prescribed. Such annual information report is required to be furnished within the prescribed time after the end of the financial year. Sub-section (5) of section 285BA of the Act lays down that where a person who is required to furnish an annual information return under sub-section (1) has not furnished the same within the prescribed time, the prescribed income-tax authority may serve upon such person a notice requiring him to furnish such return within a period not exceeding sixty days from the date of service of such notice and he shall furnish the annual information return within the time specified in the notice. 28. The Hon'ble Court further held that where the petitioner had made out a reasonable c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specified person was made aware through the notice of its obligation under section 285BA of the Act or had become aware on its own notion. However, the situation would change after having received the notice for filing the AIRs. The specified person was well aware of the legal position and its obligations. 30. In the facts of the present case and as referred to by us in paras hereinabove, the case of the specified persons before us is that the provisions of section 285BA of the Act being newly introduced were not in their knowledge and because of the same there was default in compliance to the said provisions. We find merit in the said plea that in view of the newly introduced provisions of section 285BA of the Act and because of lack of knowledge of the said provisions, there was default in furnishing the prescribed information before the income tax authorities. Thus, we are of the view that no penalty under section 271FA of the Act is leviable for the period upto the date of first notice by which the specified persons became aware of its obligations or through any other mode, as there was reasonable cause for not filing the said information in time. However, the said plea of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AIR within time, could not be said to be mere technical or venial breach. 36. The next plea raised by the assessee was that there was no tax involvement and it would not make any difference if the return was not submitted in time does not stand as similar plea was raised before the Hon'ble Gujarat High Court in Patan Nagrik Sahakari Bank Ltd's. case (supra) and the Hon'ble Court observed as under: As regards the contention that in any case, the Revenue had no use for the annual information returns of the financial year 2006-07, when there is a statutory obligation on the assessee to furnish annual information return, it is bound by it. How and in what manner the income-tax authorities make use of the said information is not the look out of the petitioner. The petitioner is bound to comply with the statutory requirements as prescribed, failing which it has to face the consequences of such failure. Besides, as rightly contended on behalf of the Revenue, on account of not providing information in time, the Revenue was not in a position to take remedial action. 37. We further find that the Amritsar Bench of Tribunal in Sub Registrar v. DIT (CIB) [ITA Nos. 137 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, it is clarified that the AIR is to be filed with the authorized agency on behalf of the DIT (CIB), who in turn would upload it on the software. In cases where the person had filed AIR with the prescribed authority but had not uploaded the same through the NSDL, then the same would be a technical default and the person could be held to have a reasonable cause in not furnishing the information through NSDL and no penalty under section 271FA of the Act is leviable for the period of default between the date of furnishing the information manually and the date of furnishing the information through the authorized agency i.e. NSDL. However, the onus is upon the assessee to establish its case of having furnished complete information manually to the prescribed authority, which in-turn was furnished to the authorized agency on a later date. The case of reasonable cause on this account and the benefit of non-levy of penalty under section 271BA of the Act on this issue is being accepted in the present years which are the initial years when the provisions of section 285BA of the Act were introduced and there was non-awareness about the said provisions of the Act. However, the said plea would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agency, then default between date of furnishing manual information and uploading on system, being technical is to be ignored, which has been ignored by DIT (CIB) in majority of cases. The onus is upon the assessee to furnish the complete information of manually furnishing the complete information, which in turn was uploaded. 3. No penalty under section 271FA of the Act to be imposed for the overlapping period of default. For e.g. If the assessee had defaulted in furnishing AIRs for four financial years i.e. financial years 2004-05 to 2007-08 and the first notice was received on 01.01.2006, then in all the years, no penalty is leviable for default upto 01.01.2006 and is leviable for the default thereafter. 42. However, in cases where the Annual Information Reports have been filed by the specified persons beyond the abovesaid period of limitation, the specified person would be held to be in default, making it eligible to levy of penalty under section 271FA of the Act. The DIT (CIB) is directed to recompute the said levy of penalty under section 271FA of the Act in line with our directions. However, reasonable opportunity of hearing should be afforded in this regard and the spec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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