Income Tax Appellate Tribunal - Amritsar
Sub Registrar,, Ferozepur vs Assessee on 20 June, 2013
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH; AMRITSAR.
BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER
AND SH. B.P.JAIN, ACCOUNTANT MEMBER
I.T.A. Nos.261 to 265(Asr)/2013
Assessment years:2005-06 to 2009-10
PAN :AMRJI2013B
The Sub Registrar, vs. Director of Income Tax (CIB)
Mamdot, Distt. Ferozepur. Chandigarh
(Appellant) (Respondent)
I.T.A. Nos.266 to 270(Asr)/2013
Assessment years:2005-06 to 2009-10
PAN :AMRTI0803C
The Sub Registrar, vs. Director of Income Tax (CIB)
Ferozepur, Distt. Ferozepur. Chandigarh
(Appellant) (Respondent)
Appellant by:Sh.J.K.Gupta, Advocate
Respondent by:Sh.Tarsem Lal, DR
Date of hearing:20/06/2013
Date of pronouncement:27/06/2013
ORDER
PER BENCH ;
This bunch of 10 appeals arises from different orders of CIT(A), Bathinda, as per details given below:
2 ITA Nos. 261 to 265(Asr)/2013
ITA Nos. 266 to 270(Asr)/2013 Sl. ITA No. Particulars Asstt. Year CIT(A) Date or No. order of CIT(A) 1 to 261 to Sub 2005-06 to Bhatinda 31.01.2013 5 265(Asr)/2013 Registrar, 2009-10 Mamdot 6 to 266 to Sub 2005-06 to Bhatinda 31.01.2013 10 270(Asr)/2013 Registrar, 2009-10 Mamdot
2. In all the cases, both assessees have taken identical grounds of appeal. The grounds raised in ITA No.261(Asr)2013, which are identical in all other appeals are reproduced hereunder:
"1. That on the facts and circumstances of the case and in law, the Ld. CIT(A) Bathinda erred on facts and law in upholding the penalty imposed u/s 271FA of the Income tax Act, 1961 for non-filing the AIR within time as prescribed u/s 114E(5) of the Income Tax Rules, 1962.
2. That the assessee is a part of Revenue Department of State of Punjab Government. So, the penalty on the State Government can not be imposed and accordingly liable to be quashed.
3. That the assessee was under the bonafide belief that the AIR for the whole district was to be filed by the Registrar of the Ferozepur District and he might have filed the same within time. Accordingly, there was a reasonable cause. So, the penalty is liable to be quashed.
4. That the advisory letter issued on 20.11.2006 can not be considered as notice u/s 258BA(5) of the Income tax Act, 1961. The assessee has not received the same as the same was not served according to section 282 read with order V of CPC. The default should be counted from the notice issued u/s 285BA(5) in September, 2010 as the department itself was sleeping over the matter for the last 5 years.3 ITA Nos. 261 to 265(Asr)/2013
ITA Nos. 266 to 270(Asr)/2013
5. That no loss was put to the department for late filing of the AIR. So, the penalty is liable to be quashed. Even the mere violation would not be enough to justify the levy of penalty as it is not automatic. It is discretionary as the word used is 'may' in section 271FA against the word 'shall'. It is only a technical default.
6. That there were only nil entries in the relevant assessment years. So, the department should have taken liberal view as was taken in the case of Sub Registrar, Kotkapura for assessment year 2005-06 where there were only two entries and the penalty was dropped suo motto."
3. The facts in the present appeals are identical to all the appeals in this order with respect to levy of penalty under section 271FA of the Income Tax Act, 1961 and therefore, all the appeals mentioned hereinabove are decided by this consolidated order.
4. The Ld. counsel for the assessee, Mr. J.K.Gupta, Advocate argued that the facts in the present case are identical to the facts decided by the ITAT, Amritsar Bench, in ITA Nos. 137 to 140(Asr)/2013 and others vide order dated 30.05.2013 except in ITA No.261(Asr)/2013 and in ITA No. 263(Asr)/2013 and there was no registration of any document as required under section 285BA(1) of the Act and therefore, no AIR was required to be filed by the assessee. The Ld. counsel for the assessee placed on record the order passed by the Director of Income Tax (CIB) in the case of 'The Sub- 4 ITA Nos. 261 to 265(Asr)/2013
ITA Nos. 266 to 270(Asr)/2013 Registrar, Kotkapura, Distt. Faridkot, dated 24.03.2011 for the financial years 2004-05 to 2008-09, in which vide para 7.1 of the order, it has been held that the transactions for the financial years 2004-05 were only two which is negligible and penalty proceedings for the financial year 2004-05 to were accordingly dropped. The Ld. counsel for the assessee also placed on record decision of 'The Sub Registrar, Bhagta Bhai Ka, Bhatinda' for the assessment year 2008-09 by CIT(A) Bhatinda dated 29.01.2013 where the delay of 26 days in filing the AIR was dropped by the CIT(A), itself. Mr. J.K.Gupta, the Ld. counsel for the assessee further argued that registration of documents in the present cases is also nominal and in ITA No.261(Asr)/2013 & 263(Asr)/2013 is 'Nil' information and therefore, no penalty can be levied since the view has been accepted by the department as per order of Director of Income Tax (CIB) vide order dated 24.03.2011 and order of CIT(A) Bhatinda dated 29.01.2013 and accordingly prayed to allow the appeal of the assessee. The Ld. counsel for the assessee further relied upon the submissions made before the Ld. CIT(A) and available in the order of the Ld. CIT(A).
5. The Ld. DR, Mr. Tarsem Lal, on the other hand, relied upon the decision of the ITAT, Amritsar Bench, dated 30.05.2013 in ITA Nos. 137 to 140(Asr)/2013 and others in the case of The Sub Registrar, Bariwala, Distt. 5 ITA Nos. 261 to 265(Asr)/2013
ITA Nos. 266 to 270(Asr)/2013 Muktsar vs. Director of Income Tax (CIB), Chandigarh & others since the issue is identical. He also argued that the order of CIT(A) for the later year of DIT (CIB) in other case cannot over-ride the decision of higher authority i.e. ITAT, Amritsar Bench, rather order of ITAT should be followed by the lower authorities. The requirement under section 285BA is to file AIR in time even if the number documents registered are nominal and there cannot be any exception to this extent. This finding has already been given by the CIT(A) at page 5 of his order. As regards other matters, he again relied upon the order of the ITAT, Amritsar Bench (supra) in ITA Nos. 137 to 140(Asr)/2013 and others (supra).
6. We have heard the rival contentions and perused the facts of the case. As argued by the ld. counsel for the assessee Mr. J.K.Gupta though the issue in the present appeals is identical to the issue decided by this Bench in ITA Nos. 137 to 140(Asr)/2013 and others vide order dated 30.05.2013 and therefore, our orders therein shall apply in these appeals when the facts in those appeals are identical to the facts in the appeals before us. As regards the exception in these appeals argued by the Ld. counsel for the assessee that there is no case for registration in ITA Nos. 261 & 263(Asr)/2013 and therefore, assessee was not required to file the AIR before the Income Tax Department. In this regard, there was no document placed before any of the 6 ITA Nos. 261 to 265(Asr)/2013 ITA Nos. 266 to 270(Asr)/2013 authorities below and also even before us that there was no case of registration in the said years. This argument of the ld. counsel for the assessee is rejected. As regards the cases which are nominal number of registration exceeding Rs.30 lacs, the Ld. CIT(A) has given the reasoned finding that no relief can be given on the issue. Moreover, it is only on filing of AIR, Income Tax Department after examination of the return and facts of the case will come to know whether the facts declared are correct or not. Therefore, according to us, filing of AIR under the Act i.e. under section 285BA(1) is mandatory and there is no exception to the same. The order of the ld. CIT(A) and Director of Income Tax (CIB) referred to by the ld. counsel for the assessee cannot help the present assessee. As regards the other facts, the issue in the present appeal is identical to the issue involved in appeals in ITA No.137 to 140(Asr)/2013 & others (supra) and our order therein shall be applicable in the present appeals. For the sake of clarity, we reproduce para 15 & 16 of our order dated 30.05.2013 in ITA Nos. 137 to 140(Asr)/2013 as under:
"15. We have heard the rival contentions and perused the facts of the case. In the present case, the main argument of the ld. counsel for the assessee, Mr. P.N.Arora was that the assessee was ignorant of law i.e. about section 285BA of the Act. He argued that the Income Tax Authority has not served any notices on the assessee and when the notice was served, the assessee filed the annual information return (In short 'AIR') and no penalty should be accordingly levied upon the assessee. In this regard, we are of the view on perusal of section 7 ITA Nos. 261 to 265(Asr)/2013 ITA Nos. 266 to 270(Asr)/2013 285BA of the Act, which was introduced by the Finance (No.2) Act, 2004 w.e.f.1.4.2005, it is not the case that this section has been introduced for the first time by Finance (No.2) Act, 2004. Prior to its substitution, section 285BA was inserted by the Finance Act, 2003 w.e.f. 1.4.2004, where any assessee who enters into any financial transaction, as may be prescribed, with any other person, shall furnish, within the prescribed time, an annual information return in such form and manner, as may be prescribed in respect of such financial transaction entered into by him during any previous year. Rule 114A to 114E prescribes such return to be furnished in Form No.61A and shall be verified in the manner indicated therein. At item No.6 of the said Rule, return shall be furnished on or before 31st August, immediately following the financial year in which the transaction is registered or recorded. Section 285BA(5) is reproduced for the sake of clarity as under:
Section 285BA(5) 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.] 15.1. The Ld. counsel for the assessee has taken the shelter of section 285BA(5) of the Act, which is reproduced hereinabove that the Income Tax Authority are under a mandate to serve the notice to the assessee in case annual information return is not filed for years together after insertion of the section by the Finance (No.2) Act, 2003 w.e.f. 1.4.2004 initially and thereafter by Finance (No.2) Act, 2004 w.e.f. 1.4.2005 mentioned hereinabove. Whereas this is not a case, the words used by the statute in section 285BA(5) gives option for the Income Tax Authority to serve notice which may or may not be served upon. The word 'may' used in section 285BA(5) clearly indicates the option for the Income Tax Authority. It is not obligatory on the Income Tax Authority to serve such notice. Therefore, interpretation has to be strictly construed. There is no ambiguity in the same. The courts cannot add or amend and by construction cannot make up the deficiencies in the Act. It is contrary to all rules of construction unless the provision as it stands is meaningless or having 8 ITA Nos. 261 to 265(Asr)/2013 ITA Nos. 266 to 270(Asr)/2013 a doubtful meaning. We are not entitled to usurp legislative function disguise of interpretation. The courts are meant to interpret law, cannot legislate it. Our views find supports from the judgment of Hon'ble Supreme Court in the case of Union of India And Others vs. Dharmendra Textiles Processors And Others reported in (2008) 306 ITR 277. In the present case, issuance and service of notice under section 285BA(5) is not obligatory on the Income Tax Authority.
Therefore, arguments made by the Ld. counsel for the assessee, Mr. P.N.Arora, are rejected to this extent.
15.2. As regards the notice dated 20.11.2006 issued by CIT (CIB), Chandigarh to the assessee, it is surprising that how the said notice has been in the possession of the assessee. Nothing has been brought on record by the ld. counsel for the assessee in this respect. Reasonable presumption is made that this notice has also been served upon the assessee dated 20.11.2006 and which has not been complied with. As per remand report, as argued by the ld. DR and also record of DIT(CIB) which has been verified by the ld. counsel that various notices have been served i.e. on 20.11.2006, 04.04.2007, 11.01.2008, 12.12.2008, 21.05.2009, 20.01.2010 & 12.03.2010. All the said seven notices remained un-complied with, at the last known address given by the assessee which is as under:
Sub Registrar Bariwala Muktsar 15.3. Penalty order dated 22.12.2010 has been served on the assessee is not in dispute against which the assessee filed appeal on 31.01.2011 before the ld. CIT(A), Bathinda. The Ld. CIT(A)'s order dated 14.12.2012 has also been served upon the assessee on 09.01.2013 at the same address has also not been disputed by the ld. counsel for the assessee. Therefore, the arguments made by the Ld. counsel for the assessee that one notice dated 20.11.2006 having mentioned wrong District is part of the paper book cannot prove that the notice dated 20.11.2006 and other six notices as mentioned hereinabove have not been issued and served on the assessee. Therefore, the argument of the ld. counsel for the assesse is rejected that no notice u/s 285BA(5) has been issued/served upon the assessee even in remand proceedings when all notices were confronted. Therefore, the reliance placed by the ld. counsel for the assessee on the decisions of various courts of 9 ITA Nos. 261 to 265(Asr)/2013 ITA Nos. 266 to 270(Asr)/2013 law on service of notice cannot be made applicable in the present case and cannot help the assessee.
15.4. As regards the decision of the Hon'ble Gujarat High Court in the case of Patan Nagrik Sahakari Bank Ltd. vs. Director of Income Tax (supra), the ld. CIT(A) has taken full cognizance of the said decision and has directed the CIT(CIB) to recompute the default w.e.f. 01.12.2006 instead of 31.08.2006 for the assessment year 2006-07 and thereafter in the following years has rightly confirmed the default being the first advisory letter issued on 20.11.2006 in view of our findings hereinabove.
15.5. As regards the reasonable cause, as mentioned hereinabove, the Ld. CIT(A) has taken cognizance in the case of Patan Nagrik Sahakari Bank Ltd. vs. Director of Income Tax (supra), decided by the Hon'ble Gujarat High Court. But at the same time, we may refer that ignorance of law is not an excuse, as per our findings hereinabove and also as per decision of the Hon'ble Gujrat High Court in the case of Pattan Nagrik Sahakari Bank Ltd. (supraand the Sub Registrar cannot be an exception to the law laid down by the Hon'ble Supreme Court mentioned hereinabove. It is settled law that ignorance of law is of no excuse, as decided by the Hon'ble Supreme Court in the case of MotiLal Padampat Sugar Mills Co. Ltd. vs. State of Uttar Pradesh & Ors reported in (1979) 118 ITR 326 (SC).
15.6. In view of the above discussions, all the grounds raised by the assessee in ITA Nos. 137 to 140(Asr)/2013 are dismissed.
16. Now, we take up the appeal of the assessee in ITA Nos. 138 to 140(Asr)/2013 in the case of Sub Registrar, Bariwala for the assessment years 2007-08 to 2009-10. Since the facts in the present case are identical to the facts in assessee's case for the assessment year 2006-07 in ITA No.137(Asr)/2013 and therefore, our decision in ITA No.137(Asr)/2013 is identically applicable in the present three appeals and accordingly order of the ld. CIT(A) is confirmed and we find no infirmity in the order of the ld. CIT(A). Accordingly, all the grounds raised by the assessee in ITA Nos. 138 to 140(Asr)/2013 are dismissed."10 ITA Nos. 261 to 265(Asr)/2013
ITA Nos. 266 to 270(Asr)/2013
7. In view of our findings hereinabove and our decision in ITA Nos. 137 to 140(Asr)/2013 and others (supra) reproduced hereinabove, shall be applicable in the present appeals and accordingly all the grounds raised by the assessee in all the appeals mentioned hereinabove are dismissed.
8. In the result, all the appeals in ITA Nos. 261 to 265(Asr)/2013 and 266 to 270(Asr)/2013 are dismissed.
Order pronounced in the open court on 27th June, 2013.
Sd/- Sd/-
(H.S. SIDHU) (B.P. JAIN)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 27th June, 2013
/SKR/
Copy of the order forwarded to:
1. The Assessee:The Sub Registrar, Mamdot & The Sub Registrar, Ferozepur.
2. The DIT(CIB)Chandigarh.
3. The CIT(A), Bhatinda.
4. The CIT, Bhatinda.
5. The SR DR, ITAT, Amritsar.
True copy By order (Assistant Registrar) Income Tax Appellate Tribunal, Amritsar Bench: Amritsar.