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TMI Blog2019 (2) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... transactions in the relevant financial year. We are unable accept the contention of the Ld.DR not to accept fresh argument of the assessee with regard to non requirement of filing the AIR in the absence of reportable transaction and the same is rejected. We hold that in the absence of any specified transaction required to be reported u/s 285BA of the Act, the assessee is not obliged to file the AIR and levy of penalty u/s 271FA is unjustified. Accordingly, we set aside the orders of the lower authorities and cancel the penalties imposed u/s 271FA - Decided in favour of assessee. Penalty required to be imposed for the period of delay - delay in filing the original return as well as the delay in furnishing the supplementary return correcting the defects, but not for the intervening period - Held that:- In the instant case, DIT have given only 4 days time to rectify the mistakes and the assessee has filed the AIR within 30 days from the date of receiving the notice for the A.Y. 2013- 14 to 2015-16 and the reason explained by the assessee was delay in service of notice and insufficient time given by the DIT and pressure of work due to annual closing of the accounts. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Return (AIR) u/s 285BA of the Income Tax Act (hereinafter called as Act ). For the Financial Years (F.Ys) 2010-11, 2011-12, 2012-13, 2013-14, 2014- 15 and 2015-16 (relevant to the A.Ys 2011-12 to 2016-17) the AIR has to be filed by 31st August of the succeeding financial year. For example, AIR for the F.Y 2010-11 required to be filed on or before 31st August 2011. In the instant case, the assessee did not file the AIR for the F.Y. 2010-11 to 2015-16 relevant to the A.Ys 2011-12 to 2016-17 before the due date. Therefore, the Director of Income Tax (Intelligence Criminal Investigation) [DIT (I CI)] (in short DIT ), Hyderabad had issued notice u/s 274 r.w.s. 271FA of the Act and called for explanation from the assessee as to why penalty should not be levied for the assessee s failure to file AIR before the due date. The assessee filed explanation, but not being convinced with the explanation offered by the assessee, the DIT imposed penalty u/s 271FA for the F.Y. 2010-11 to 2015-16 as under : F.Y. A.Y. Penalty (Rs.) 2010-11 2011-12 2,08,000 2011-12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of the Ld.CIT(A). 7. We have heard both the parties and perused the material placed on record. As per section 271FA, a person who is responsible for registering, or maintaining books of account or other document containing a record of any specified financial transaction, under any law for the time being in force, shall 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 1st day of April, 2004 and information relating to which is relevant and required for the purposes of this Act, to the prescribed income-tax authority or such other authority or agency as may be prescribed. The return has to be filed by a person who has recorded the transaction and person who fails to furnish such return within time period prescribed u/s 285BA(2) of the Act, shall be liable to pay penalty u/s 271FA of the Act for a sum of ₹ 100/- for everyday during the period which the failure continues. Combined reading of section 271FA and section 285BA shows that a person is obliged to furnish the AIR, only, when there is existence of reportable transaction or specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces u/s 274 r.w.s. 271FA of the Act vide notice dated 04.04.2017 and called for the explanation of the assessee. As per the notice, the assessee has to furnish the explanation before 10.04.2017 and there was no response from the assessee. Hence the Ld.DIT levied penalty u/s 271FA for the entire period from 1st September of the subsequent financial year to till the date of filing the supplementary return rectifying the defects pointed out by the DIT vide notice issued u/s 285BA(4) of the Act. 9. Aggrieved by the order of the DIT, the assessee went on appeal before the CIT(A) and the Ld.CIT(A) dismissed the appeals of the assessee stating that there was no reasonable cause for filing the return belatedly. The Ld.CIT(A) relied on the decision in the case of Joint Sub Registrar, Sangat and Sub-Registrar, Bhiwani (supra). 10. During the appeal hearing, the Ld.AR argued that the DIT has issued the notice u/s 285BA(4) for rectifying the defect on 24.03.2017 granting time period of 4 days for rectifying the defects and to file the revised/supplementary return on or before 28.03.2017. The said notice was served on the assessee on 27.03.2017, thus the time available to the assessee to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of section 285BA of the Act casting the obligation on the assessee to furnish the annual statement of specified transactions with an intention to take necessary action against the nonassessees of the tax returns or tax evaders. Non furnishing of the returns and non-reporting of the specified transaction before the due date specified in the Act defeats the purpose of making the provisions in the Act causing delay in taking action against the tax offenders. In the instant case, the assessee could not explain the valid reason for not furnishing the returns and AIRs before the due date. Therefore it is fit case for imposing penalty u/s 271FA for furnishing the returns beyond the specified date. This view is upheld by the decisions relied upon by the Ld.CIT(A) in the case of Sub Registrar (Tehsildar), Jagadhari (42 taxmann.com 444) and the decision of Hon ble High Court of Punjab and Haryana in the case of Sub-Registrar, Bhiwani (88 taxmann.com 582). Therefore, we uphold the order of the Ld.CIT(A) and confirm the penalty imposed for the period of delay in filing the AIR (i.e. from the due date to the date of filing the defective AIR). However, in this case the question is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fying the mistake subsequently, however, not before the due date mentioned in the notice issued u/s 285BA(4) of the Act. The Ld.DIT has issued notice u/s 271FA and not being convinced with the explanation offered by the assessee levied the penalty from the date of default in furnishing the original return to till the date of filing the supplementary return rectifying the defects. There are two aspects to be considered in this case. Firstly, the failure of furnishing the original return and secondly, the period of default in furnishing the defective return rectifying the defects. Therefore, we are of the considered opinion that the penalty required to be imposed for the period of delay i.e delay in filing the original return as well as the delay in furnishing the supplementary return correcting the defects, but not for the intervening period. In the instant case, the Ld.DIT have given only 4 days time to rectify the mistakes and the assessee has filed the AIR within 30 days from the date of receiving the notice for the A.Y. 2013- 14 to 2015-16 and the reason explained by the assessee was delay in service of notice and insufficient time given by the DIT and pressure of work due to an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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