Income Tax Appellate Tribunal - Ahmedabad
Sub Registra - Bavla,, Ahmedabad vs The Director Of Income Tax, (Inci),, ... on 28 September, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "SMC" BENCH
(BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER
& SHRI WASEEM AHMED, ACCOUNTANT MEMBER)
ITA. No: 3323/AHD/2016
(Assessment Year: 2013-14)
Sub Registrar- Bavla V/S Director of Income Tax
Mamlatdar Office (I&CI) Room No. 8.
Compound, Tal. Bavla, Ground Floor, Aaykar
Ahmedabad-382325 Bhavan, Ahmedabad
(Appellant) (Respondent)
PAN: ABXPP2150Q
Appellant by : Shri P. F. Jain, AR
Respondent by : Shri B. L. Meena, Sr. D.R.
(आदे श)/ORDER
Date of hearing : 17 -09-2018
Date of Pronouncement : 28-09-2018
PER MAHAVIR PRASAD, JUDICIAL MEMBER
1. This appeal by the Assessee is directed against the order of the Ld. DIT(I&CI), Ahmedabad dated 26.10.2016 pertaining to A.Y. 2012-13 and following ground has been taken:
2 ITA No. 3323/Ahd/2016. A.Y. 2012-13
1. The ld. DIT(I&CI) has erred in law and on facts in levying penalty of Rs. 1,15,100/- u/s. 271FA without properly considering and appreciating the facts of the case.
2. Briefly stated the facts of the case are Director of Income Tax was in receipt of information reported three high value property transactions in the AIR for Financial Year 2012-13, out of which two were under the jurisdiction of Sub Registrar, Bavla. Letter dated 08.04.2016 was issued to the Sub Registrar Bavla to rectify the AIR by 26.04.2016, failing which penalty would be imposable.
3. In the reply of the notice, Sub Registrar, Bavla submitted copies of the two registration deeds and claimed that the transactions, pertaining to developmental agreement, were not reportable u/s. 285BA of the Income Tax Act.
4. But ld. DIT(I&CI) was not specified with the reply of the Sub Registrar, Bavla. Thus, with following observations:
These are cases where the land owner has given "irrevocable license" and authority to the developer (Pacifica Developers) and its representatives to enter the land, and has also handed over to them all the title deeds and original documents in relation to the land. Clause II of the Agreements states that the Developer, at its sole discretion, and without any consent or reference of the land owner for the construction or development of the said project, shall purchase all such necessary things, materials etc. under such terms and conditions to be decided by the Developer. The Developer shall also make rules and regulations for better administration and maintenance of the common areas and such rules shall be binding on the intending purchasers and the existing members having ownership of the plot in the said project. The Agreements specifically state that the land owners undertake that they shall not enter into any other agreement in relation to the said land in favour of any person other than the Developer, and shall also not assign the work to any other person which affects the Project. It would be evident from the above that for all practical purposes, rights over the said plots of land have been irrevocably transferred to the Developer. A specific clause in the Agreements states that until the sale of all the units to be constructed by the Developer under the Development Agreement, the possession of land together with construction made in the Project, shall be maintained with the Developers. Therefore, a mere statement in the Agreements stating that this transaction will not be treated as sale u/s 56-A of the Transfer of property Act, does not have any significance. What is interesting to note is that the Agreements also envisage transfer of money, 3 ITA No. 3323/Ahd/2016 . A.Y. 2012-13 including payment of Rs. 32,71,43,2007- and Rs.2,11,26,860/- for the two different agreements by the land owners by way of Stamp Duty, which is payable only at the time "transfer". The Developer has also paid an amount of Rs.7,20,28,000/- and Rs.29,72,000/-respectively, to the land-owners, purportedly for gaining entry and for development of the land.
4. In view of the above, the transactions made by way of development agreement are covered within the meaning of "specified financial transaction" for the purposes of sub-section (3) of Section 285BA which, inter-alia, includes any transaction of sale, or of transfer of right or interest in a property, or any transaction for rendering any service.
5. Against the aforesaid backdrop, I hold that AIR was required to be filed in respect of the transactions conducted w.r.t. both the Development Agreements. Since the SRO concerned has defaulted in filing the AIR in respect of both the Agreements, which were due to be filed on 31-08-2013, penalty u/s. 271FA is levied @ Rs.100 per day for a total of 1151 days (01/09/2013 to 25/10/2016). The penal amount works out to Rs.1,15,100/-.
5. He levied the penalty of Rs. 1,15,100/-.
6. We have gone through the relevant record and impugned order. In this case, assessee is working as a sub-registrar with the Govt. of Gujarat. His job is to register document pertaining to moveable or immovable property. In this case, two of the developer agreements were not submitted to the Income Tax Authorities for which penalty was levied by the Income Tax Department. Appellant's contention is that as per Office Memorandum of dated 10 May, 2007 sub-registrar is supposed to send the details pertaining to purchase or sale by any person of immovable property valued at Rs. 30 lacs or more and according to appellant these two agreements were not with regard to sale and purchase. On the other hand, revenue stand was that as per Section 271FA sub-registrar is duty bound to send statement of financial transaction or reportable account.
7. Ld. A.R. also cited judgment of Hon'ble Delhi High Court in the case of CIT (TDS) vs. ARK Corporation, it is held:
4 ITA No. 3323/Ahd/2016. A.Y. 2012-13 Penalty under s. 272A(2)(g)-Leviability-Delay in issuing TDS certificates-For a mere technical default of delay in issuing TDS certificates, there is hardly any reason to levy penalty under s. 272A(2)(g) - Revenue cannot be allowed to impose penalty only because it has power to do so without exercising the discretion in a judicial manner- Hindustan Steel Ltd. vs. State of Orissa (1972) 83 ITR 26 (SC) relied on
8. In this case, Office Memorandum of Ministry of Finance, Department of Revenue dated 10 May, 2007 support the contention of the appellant as well as Rule 114E of Income Tax Rules 1962 also supports contention of the appellant which says any purchase or sale by any person of immovable property for an amount of Rs. 30 lakhs or more or valued by the Stamp Authority referred to in Section 50C of the Act at Rs. 30 lakhs or more, same to be reported to the Revenue Authority. In our considered opinion, a benefit of Section 273B can be given to the appellant.
9. In the result, appeal filed by the assessee is allowed.
Order pronounced in Open Court on 28 - 09- 2018
Sd/- Sd/-
(WASEEM AHMED) (MAHAVIR PRASAD)
ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER
Ahmedabad: Dated 28/09/2018
Rajesh
Copy of the Order forwarded to:-
1. The Appellant.
2. The Respondent.
3. The CIT (Appeals) -
4. The CIT concerned.
5. The DR., ITAT, Ahmedabad.
6. Guard File.
By ORDER
Deputy/Asstt.Registrar
ITAT,Ahmedabad