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TMI Blog2025 (1) TMI 1394X X X X Extracts X X X X X X X X Extracts X X X X ..... directed against the order of National Faceless Appeal Centre, Delhi/Commissioner of Income tax (Appeals) [for short to as "NFAC/Ld.CIT(A)] dated 28.02.2024 for assessment year (AY) 2016-17, in confirming penalty levied by Assessing Officer under section 271-I of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') 28.06.2016. The assessee has raised the following grounds of appeal:- "1. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of Assessing Office in levying the penalty of Rs. 17,00,000/- u/s 271-I of the I.T. Act, 1961. 2. It is therefore prayed that above penalty levied by the Assessing Office and confirmed by learned CIT(A) may please be deleted. 3. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal." 2. Brief facts of the case are that assessee is engaged in the business of manufacturing of diamond by cutting and polishing of rough diamond and sale thereof. The assessee filed its return of income for assessment year 2016-17 on 19.09.2016 declaring income at Rs. 17,84,880/-. The case was selected for scrutin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision of this Act by inserting Rule 37BB. The requirement was specified for furnishing Form No.15CA even if remittances in respect of any sum which is not chargeable under the provision of the Act. For such purpose, Part-D was also inserted in Form No.15CA. However, while bringing the amendment, requirement of filing Form No.15CA in respect of remittances towards import was specifically excluded while serial No.8 of specified list in Rule 37BB. The relevant part of Rule was extracted in the reply. The reply of assessee was not accepted by Assessing Officer by taking view that filing of Form Nos. 15CA/15CB is mandatory in case the assessee made any foreign remittances as per section 195(6) of the Act. The assessee failed to furnish such information before Assessing Officer in Form No.15CA. The Assessing Officer considered 17 foreign remittances for which the assessee was required to furnish Form15CA/ 15CB and levied penalty @ Rs. 1,00,000/- for each of the default aggregating Rs. 17,00,000/- vide penalty order dated 28.06.2019. 3. Aggrieved by the penalty imposed under section 271-I of the Act, assessee filed appeal before Ld.CIT(A). Before Ld.CIT(A) assessee made similar submissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or not chargeable under the provision of the said amendment information relating to payment of such sum, in the manner as may be prescribed for making such compliance corresponding amendment was made in Rule 37BB for making compliance in Form No.15CA/15CB/15CC. The Ld. Sr-DR for the Revenue submits that assessee failed to make such compliance in respect of 17 foreign remittances and thus committed default attracting penalty under section 271-I of the Act. 6. We have considered the rival submissions of both the parties and have gone through order of lower authorities carefully. We have also deliberated the case law relied upon by Ld. AR of the assessee. We find that assessee in its present appeal has raised similar ground of appeal as has been raised in case of M/s Vinay Diamond in ITA No.103/SRT/2020 (supra), wherein by considering the Notification No.G.S.R.978(E) dated 16.12.2015 issued by Central Board of Direct Taxes held that there are certain payment of specified nature mentioned in Rule 37BB which do not require submission of Form No. 15CA/15CB and one of such payment includes advance payment against import. The relevant finding of Tribunal is extracted below: 7. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tlement of invoice 3. Imports diplomatic missions 4. Intermediary trade 5. Imports below Rs. 5,00,000/- (For use by ECD officers)" 8. Therefore, assessee submitted before ld CIT(A) that 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. So, there is lack of clarification of words expressively in the provisions only during this assessment year and no express specification have been made for penalty for each default. So, penalty under section 271-I should not be levied for non-furnishing of Form 15CA. 9. The ld CIT(A), after considering the submission of the assessee, observed that the remittance made by the assessee was against the import of goods and does not attract the provision of withholding tax and therefore the requirement to furnish the details u/s 195(6) r.Rule 37BB is not mandatory. The form 15CA/15CB are required to be submitted only for those payments which are chargeable to tax in India and therefore later on the government amended the provision of section195(6) by issuing notification no. G.S.R. 978(E) dated 16th De ..... X X X X Extracts X X X X X X X X Extracts X X X X
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