Income Tax Appellate Tribunal - Chandigarh
The Sub Registrar/Jt. Sub Registrar, ... vs Assessee
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCHES 'A' CHANDIGARH
B E F O R E S H R I T . R . S O O D , AC C O U NT A N T M E M B E R
A N D M S S U S H M A C H OW LA , J U D IC IA L M E M B E R
I T A N o s . 3 7 8 & 3 79 / C h d / 2 0 12
A s s e s s me n t Y e a r s : 2 0 0 8 - 0 9 & 2 0 09 - 1 0
The Sub Registrar, Vs The Director of Income Tax(CIB),
Pehowa, SCO 98-100,
Distt. Kurukshetra. Sector 17-C,
P A N N o . R T KS - 0 6 52 4 A C h a n d i ga r h .
&
I T A N o s . 86 3 t o 8 6 5 / Ch d / 2 0 1 2
A s s e s s me n t Y e a r s : 2 0 0 5 - 0 6 t o 2 00 7 - 0 8
The Sub Registrar, Vs The Director of Income Tax(CIB),
Is mailabad, SCO 98-100,
Distt. Kurukshetra. Sector 17-C,
P A N N o . R T KJ -0 2 9 72 E C h a n d i ga r h .
&
I T A N o s . 38 0 & 3 8 1 / Ch d / 2 0 1 2
A s s e s s me n t Y e a r s : 2 0 0 8 - 0 9 & 2 0 09 - 1 0
The Sub Registrar, Vs The Director of Income Tax(CIB),
Is mailabad,, SCO 98-100,
Distt. Kurukshetra. Sector 17-C,
P A N N o . R T KS - 0 6 52 4 A C h a n d i ga r h .
&
I T A N o s . 3 8 2 & 3 83 / C h d / 2 0 12
A s s e s s me n t Y e a r s : 2 0 0 8 - 0 9 & 2 0 09 - 1 0
The Sub Registrar, Vs The Director of Income Tax(CIB),
Thanesar, SCO 98-100,
Distt. Kurukshetra. Sector 17-C,
P A N N o . R T KS 0 4 239 E C h a n d i ga r h .
(Appellant) (Respondent)
A p p e l l a n t b y: S h r i G. S a ga r A h u j a
R e s p o n d e nt b y : S h r i J .S . N a ga r
Date of Hearing : 0 3 . 10 . 2 0 1 3
D a t e o f P r o n ou n c e m e n t : 3 1 . 1 0 .2 0 1 3
O R D E R
PE R S U S H M A C H O W L A , J. M .
T h e b u n c h o f a p p e a l s h a v e b e e n f i l e d by d i f f e r e n t a s s e s s e e s a ga i n s t 2 d i f f e r e n t o r d e r s o f t h e C IT ( A p p e a l s ) r e l a t i n g t o a s s e s s m e n t ye a r s v a r yi n g b e t w e e n 2 0 0 6 - 0 7 t o 2 0 0 9 - 1 0 r e s p e c t i v e l y a ga i n s t t h e p e n a l t y l e v i e d u n d e r s e c t i o n 2 71 F A o f t h e In c o m e T a x A c t , 1 9 6 1 ( ' t h e A c t ' f o r s h o r t ).
A l l t h e s e a p p e a l s re l a t i n g t o d i f f e r e n t S u b R e gi s t r a r s o n s i m i l a r i s s ue w e r e h e a r d t o ge t h e r a n d a r e b e i n g d i s p o s e d o f b y t h i s c o n s o l i d a t e d o r d e r f o r t h e s a k e o f c o n ve n i e n c e .
2. In IT A Nos. 378 & 3 7 9 / C h d / 20 1 2 , the assessee has raised f o l l o w i n g gr o u n d s of a p p e a l :
" 1. That the Ld. CIT (A) has erred in confirming the action of the DIRECTOR OF INCOME-TAX (CIB) CHANDIGARH wherein he imposed penalty of Rs. 77,500/- u/s 271 FA.
2. That the worthy CIT (A) has erred for not considering the judgment of Hon'ble high court in case of Patan Nagrik Sahakari Bank Ltd. Vs. DCIT (CIB) Guj. High court.
3. That the Ld. CIT (A) is not justified in rejecting the contention of the appellant while complying the notices of the department to A.O. CIB Karnal office.
4. That the Ld. CIT (A) is not justified in ignoring the plea of the appellant i) bonafide belief of filing the return ii) Provisions of section 285BA were new iii) Having no TAN number iv) SDO Civil Pehowa being the in-charge of sub division & having TAN no. competent for filing required information.
5. That no revenue loss for not filing information late by the appellant."
3. In ITA Nos. 863 to 865/Chd/2012, the assessee has raised the following grounds of appeal :
1. That the Ld. A.O. erred in law & fact, (Ld. CIT (A) also erred in law & fact in confirming) on imposing penalty u/s 271 FA amounting to Rs. 1,33,800/-.
2. That the A.O. did not consider the annual information filed manually along-with C.D within-time by the appellant & Ld. CIT (A) also erred in confirming the same.
3. That the worthy CIT (A) has erred for not considering the judgment of Hon'ble High court in case of Patan Nagrik Sahakari Bank Ltd. Vs. DCIT (CIB) Guj. High court.
4. That the Ld. CIT (A) is not justified in rejecting the contention of the appellant while complying the notices of the department to A.O. CIB Karnal office 3
4. In ITA Nos. 380 & 381/Chd/2012, the assessee has raised the following grounds of appeal :
1. That the Ld. CIT (A) has erred in confirming the action of the DIT (CIB) Chandigarh wherein he imposed penalty of Rs. 49,500/- u/s 271 FA.
2. That the worthy CIT (A) has erred for not considering the judgment of Hon'ble high court in case of Patan Nagrik Sahakari Bank Ltd. Vs. DCIT (CIB) Guj. High court.
3. That the Ld. CIT (A) is not justified in rejecting the contention of the appellant while complying the notices of the department to A.O. CIB Karna/ office.
4. That the Ld. CIT (A) is not justified in ignoring the plea of the appellant i) bonafide belief of filing the return ii) Provisions of section 285BA were new iii) Having no TAN number iv) SDO Civil Pehowa being the in-
charge of sub division & having TAN no. competent for filing required information.
5. That no revenue loss for not filing information late by the appellant.
5. In ITA Nos. 382 & 383/Chd/2012, the assessee has raised the following grounds of appeal :
1. That the Ld. CIT (A) has erred in confirming the action of the DIT(CIB) Chandigarh wherein he imposed penalty of Rs. 85,300/-u/s 271 FA.
2. That the worthy CIT (A) has erred for not considering the judgment of Hon'ble high court in case of Patan Nagrik Sahakari Bank Ltd. Vs. DCIT (CIB) Guj. High court.
3. That the Ld. CIT (A) is not justified in rejecting the contention of the appellant while complying the notices of the department to A.O. CIB Karnal office.
4. That the Ld. CIT (A) is not justified in ignoring the plea of the appellant i) bonafide belief of filing the return ii) Provisions of section 285BA were new iii) Having no TAN number iv) SDO Civil Pehowa being the in-charge of sub division & having TAN no. competent for filing required information.
5. That no revenue loss for not filing information late by the appellant.
6. Shri G.Sagar Ahuja appeared on behalf of the Sub Registrar, Pehowa and Sub Registrar, Ismailabad. It was brought to his notice that two appeals of Sub Registrar, Thanesar were also fixed for hearing and notice had wrongly been issued by the Registry in the name of Sub Registrar, Pehowa. The ld. Counsel Shri G.Sagar Ahuja stated that he also represents Sub Registrar, Thanesar. The perusal of the record shows that by error, common notice in ITA Nos. 378 to 4 383/Chd/2012 were issued in the name of Sub Registrar, Pehowa, though ITA Nos. 378 & 379/Chd/2012 relate to Sub Registrar, Pehowa, ITA Nos. 380 & 381/Chd/2012 relate to Sub Registrar, Ismailabad and ITA Nos. 382 & 383/Chd/2012 relate to Sub Registrar, Thanesar. He further submitted that he was representing all different Sub Registrars and Power of Attorneys in all cases in his favour were filed. Different Power of Attorneys were found to be on record.
Therefore, we allowed him to argue all the appeals.
7. All the appeals involving similar issue were heard together as only issue involved in the present set of appeals was against the l e v y o f p e n a l t y u n d e r s e c t i o n 2 7 1 F A o f t h e A c t . The facts in all the appeals are identical, however reference is being made to the facts in ITA No. 378/Chd/2012 to adjudicate the issue.
8. As per the records in the office of the DIT (CIB), the Sub Registrar/s in the present bunch of appeals had not furnished the A n n u a l I n f o r m a t i o n R e t u r n s i n t h e c a p t i o n e d a s s e s s m e n t ye a r s . The DIT (CIB) issued show cause notice to the respective assessee/s before us to show cause as to why penalty under section 271FA be not i m p o s e d . I n r e p l y, t h e a s s e s s e e s e n t t h e i n f o r m a t i o n i n C D v i d e o f f i c e letter dated 15.10.2010 but no written submissions were filed to ex plain the reason for not filing the AIR. Further reply was filed by the assessee submitting that he had sent the information on various dates. The DIT (CIB) noted that the information sent b y the specified person was the information called for under section 133(6) of the Act b y the ITO (CIB) Karnal in respect of the sale and purchase of i m m o v a b l e p r o p e r t i e s o f R s . 5 l a c s t o R s . 3 0 l a c s o n l y. T h e f i l e r w a s asked to furnish the proof of filing the AIRs for the concerned f i n a n c i a l ye a r s a n d a l s o t h e r e a s o n s f o r l a t e f i l i n g o f t h e A I R s . In 5 response, the Joint Sub Registrar, Pehowa appeared before the DIT ( C I B ) a n d f u r n i s h e d p r o o f r e g a r d i n g f i l i n g o f A I R s f o r f i n a n c i a l ye a r s 2004-05 to 2008-09 which was filed on 01.01.2011 but no explanation was filed to explain the reason for delay in late filing the AIRs. The p e n a l t y p r o c e e d i n g s f o r f i n a n c i a l ye a r 2 0 0 4 - 0 5 w e r e d r o p p e d a s t h e AIR was filed on 25.11.2005 i.e. in time. However, in respect of the balance financial years i.e. 2005-06 to 2008-09 the information was filed belatedly and penalty under section 271FA of the Act was levied @ Rs. 100/- per day of default.
9. The CIT(Appeals) vide paras 1.06 to 1.09 observed as under :
1.06 The first plea of the appellant is that filing of AIRs was relatively a new provision being introduced by the finance act 2003, for filing the AIR with effect from 01.04.2004 onwards. The plea of the appellant is considered and it is noted that the DIT(CIB) in the penalty order has stated that the appellant did not respond to any of the advisory letters issued from his office, the first of which was issued on 21.11.2006. In view of this fact, the delay in filing the AIR up to 21.11.2006 is condoned. 1.7 The appellant is para 2 & 3 of the written submissions took the plea that he was under bonafide belief that he has discharged his duties of filing the information called for, though the same was u/s!33A of the Act. The plea of the appellant is considered. At the outset, it is noted that the appellant has not filed the copies of the relevant correspondence in support of his claim that the requisite information/AIR was filed.
Further, the appellant himself noted that the information filed was called for u/s 133A of the Act. It is difficult to appreciate that how the information called for and furnished u/s!33A of the Act, can be said to be filed u/s285BA(l) of the Act. In any case, the DIT(CIB) considered the plea of the appellant and allowed the benefit of filing the AIRs of the F.Yrs. 2004-05 to 2008-09 with the ITO (GIB) Karnal/CIT GIB, Chandigarh on different dates which is specified in para 8 of the penalty order and considered the delay in filing the return up to those dates only and no penalty was levied for the F.Y. 2004-05.
1.8 The appellant further took the plea that he was not having any Tan or Pan numbers and without that, it was not possible to file the said information. It is an administrative problem and there should not be any problem in taking the TAN/Pan no. by fulfilling the prescribed procedure. The appellant could have contacted the department at least after getting the notice from the DIT(CIB) to ascertain the details in this regard and should have taken the necessary action. 1.9 The appellant finally took the plea that by not filing the above information, there was no loss to revenue and placed reliance on some decisions. The plea of the appellant is considered. It is noted that most of the default under the Income Tax Act, especially concerning TDS/TCS or AIR can be said to be of technical nature 6 and this way, can one say the penalty for these defaults can never be levied."
10. The CIT(Appeals), in view of the above held the assessee not to have brought on record any reasonable cause of delay in filing the AIR and the penalty levied under section 271FA of the Act was u p h e l d i n a l l t h e y e a r s e x c e p t a s s e s s m e n t ye a r 2 0 0 6 - 0 7 , w h e r e i t w a s deleted.
11. The ld. AR for the assessee pointed out that the assessee was i n i t i a l l y n o t a w a r e o f t h e p r o v i s i o n s o f t h e A c t a n d h e n c e t h e d e l a y.
Further, after the receipt of the notice from the authorities, the information was filed manually alongwith CD. The next contention of the ld. AR was that no TAN number was allotted to the assessee and h e n c e t h e d e l a y. It was further contended b y the ld. AR for the assessee that no NSDL was available in District Kurukshetra and the manual returns were repeatedly filed. Our attention was drawn to the various communications filed before different parties for the financial year 2004-05 to 2006-07, evidence of which was filed in the Paper Book. Further reliance was placed on the decision of Gujrat High Court in in Patan Nagrik Sahakari Bank Ltd. Vs. Director of Income-
Tax (CIB) [338 ITR 167 (Guj)] and also on the ratio laid down by the Hon'ble Supreme Court in Hindustan Steel Ltd. Vs. State of Orissa [83 ITR 26(SC)]. The ld. AR further pointed out that the NSDL was established in Kurukshetra in 2009 and thereafter, the AIR i n f o r m a t i o n w a s u p l o a d e d o n t h e s ys t e m . I t w a s f u r t h e r c o n t e n d e d b y the ld. AR for the assessee that in all the appeals, same facts are arising.
12. The ld. DR for the revenue pointed out that the issue in the present appeal is identical to the issue raised in the case of Sub 7 Registrar, J agadhari Vs DIT (CIB) in ITA Nos. 431 to 434/Chd/2012, which have been argued earlier. Further reliance was placed on the ratio laid down by the Amritsar Bench of Tribunal decision in the Sub Registrar Vs DIT (CIB) in ITA Nos. 137 to 140/Asr/2013 vide order 30.05.2013.
13. We have heard the rival contentions and perused the record. We find that the issue of levy of penalty under section 271FA of the Act arose before the Chandigarh Bench of Tribunal in ITA Nos. 431 to 434/Chd/2012 wherein vide order dated 30.10.2013, it has been held as under :
"23. We have heard the rival contentions and perused the record. Section 285BA of the Act prescribed an obligation to furnish Annual Information Report by the prescribed person for the specified transaction within stipulated time. The Sub Registrar in view of the provisions of section 285BA of the Act is required to file Annual Information Report in respect of the transaction of purchase and sale by any person of immovable property valued at Rs.30 lacs or more. The due date for filing the said AIR information in Form No.61A is 31st August immediately following the financial year in which the transaction was registered or recorded. The onus is upon the assessee to furnish the specified information under section 285BA of the Act.
24. Coming to the provisions of section 285BA of the Act, the sub-section (1) provides the list of persons who are required to furnish the Annual Information Return in respect of financial transactions which are registered or recorded during the financial year beginning on or after 1st day of April, 2004. Such information is to be furnished to the prescribed income tax authority i.e. the Director of Income 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 8 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 failed to furnish the Annual Information Return. Under sub- section (5) where the prescribed person has not furnished Annual Information Return within the prescribed time, the prescribed income tax authority may serve upon such person notice requiring him to furnish such return within a period not exceeding sixty days.
25. Under the provisions of section 271FA of the Act, penalty is imposable in the event of the person responsible having failed to furnish the AIR information under section 285BA of the Act. Section 271 FA of the Act reads as under:
"[Penalty for failure to furnish annual information return.
271FA. If a person who is required to furnish an annual information return, as required under sub-section (1) of section 285BA, fails to furnish such return within the time prescribed under that sub-section, the income-tax authority prescribed under the said sub-section may direct that such person shall pay, by way of penalty, a sum of one hundred rupees for every day during which the failure continues.] "
26. Reading the provisions of section 285BA and the relevant provisions of section 271FA of the Act, it transpires that where the prescribed person is required to furnish the AIR and fails to furnish the same within the prescribed time, then such person could be held to be liable to levy of penalty equivalent to Rs.100/- for every day of default. The above said provisions were inserted by the Finance (No.2) Act 2004 w.e.f. 1.4.2005. Under the provisions of section 273B of the Act, the penalty leviable under various sections is not to be imposed, where the person proves that there was reasonable cause for the said failure/default. The levy of penalty under section 271FA of the Act is also covered within the provisions of section 273B of the Act. It thus implies that in each case of default under section 271FA of the Act, the levy of penalty is not compulsory and the same is not imposable if the person satisfies the conditions prescribed under section 273B of the Act.
27. We find that the issue of levy of penalty under section 271FA of the Act arose before the Hon'ble Gujarat High Court in Patan Nagrik Sahakari Bank Ltd. Vs DIT (CIB) (supra), wherein it has been observed as under:
"Section 285BA of the Act imposes an obligation upon any person, being an assessee, who is responsible for registering or maintaining books of account or other documents containing a record of any specified financial transaction, under any law for the time being 9 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 cause for not filing the prescribed AIR return within the prescribed period of limitation, it would be reasonable to believe that the petitioner was not aware of the provisions of section 285BA of the Act. The Hon'ble Court further observed that where the person had not furnished the AIR return under section 285BA(1) of the Act, sub-section (5) thereof lays down that prescribed income tax authority may serve upon such person a notice requiring him to furnish said return within the specified period not exceeding 60 days from the date of service of such notice. The Hon'ble Court concluded by holding that Upon such notice being served, the petitioner can no longer plead that it was unaware of the statutory provisions or its obligations under the same. The Hon'ble Court thus held that the assessee in such circumstances could not be said to have any reasonable cause for not filing the Annual Information Return within the period of 60 days of service of the said notice. The Hon'ble Court observed that However, merely because the petitioner has not immediately taken steps after the issuance of the first notice on December 17, 2008, it cannot be said that the reasonable cause made out by the petitioner in respect of the period prior thereto should not be taken into consideration while considering the quantum of penalty to be imposed under section 271FA of the Act. However, with effect from the date of service of the notice dated December 17, 2008, issued under section 285BA(5) of the Act, any default on the part of the petitioner would be viewed as a conscious disregard of its statutory obligation and as such, in respect of the period subsequent thereto, the petitioner would not be entitled to the benefit of the provisions of section 273B of the Act. This view finds support in the decision of this court in the case of CIT v. Kanubhai M u l j i b h a i P a t e l [ 2 0 0 8] 3 0 6 I T R 1 7 9 ( G u j ) o n w h i c h r e l i a n c e has been placed on behalf of the petitioner.
1029. The Hon'ble Supreme Court in Motilal Padampat Sugar Mills Co.Ltd. Vs. State of Uttar Pradesh & Others [ 1 1 8 I T R 3 2 6 ( S . C . )] h a d h e l d t h a t t h e r e i s n o p r e s u m p t i o n that every person knows the law. It is often said that every one is presumed to know the law, but that is not a correct statement: there is no such maxim known to the law. Without going into the facts of the case, we are of the opinion that same is applicable only till the time the 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 non-awareness of the provisions of the Act cannot be pressed into service for the period after the said date. Further, the person cannot take shelter under the plea that in the absence of any notice issued, it was not aware of its obligations, as the onus is upon the persons to furnish the information. In such cases, the date of first notice or date of furnishing the first AIR under section 285BA of the Act, would be the date of notice.
31. The second plea raised by the learned A.R. for the assessee was that because of technical and venial breach, no penalty was imposable, for which reliance was placed on Hindustan Steel Limited Vs State of Orissa 83 ITR 26 (S.C) and C.T.Ramanathan and Co. vs ITO, 34 TTJ 125 (Mad).
32. On consideration of the judgements, we are of the opinion that failure to file required particulars in respect of transactions of sale value of Rs. 30 lacs or above under section 285BA of the Act cannot be termed merely breach of technical nature because on the basis of such information, the revenue would take action against specified persons i.e. persons purchasing or selling properties in value exceeding Rs. 30 lacs and in the absence of such information, which is required to be filed by Sub-Registrar, the Department can loose huge revenue. Therefore, such default is leading to enormous consequences, which cannot be termed as technical.
1133. Secondly, in any case, Gujrat High Court in Patan Nagrik Sahakari Bank Ltd. (supra)has considered the decision of Hindustan Steel Ltd. Vs State of Orissa (supra) while dealing with the issue of levy of penalty under section 271FA of the Act, which is identical and still held the penalty to be leviable. We find no merit in the plea of the assessee in this regard.
34. The Hon'ble Punjab & Haryana High Court in H.M.T. L t d . T r a c t o r s D i v i s i o n V s C I T [ 2 7 4 I T R 5 4 4 ( P &H ) ] h a v e laid down the principle that where the tax at source had been paid in time and the necessary return in respect thereof was filed in time with the income tax department, on mere late issue of tax deduction certificate, there was no loss to the Revenue and the delay in furnishing the tax deduction certificate was merely technical or venial in nature and penalty could not be imposed. The said decision cannot be applied to the present issue in view of the reasons given above.
35. However, in the facts of the present case, where the assessee failed to furnish the 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. Vs DIT (CIB) (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 Vs DIT (CIB) in ITA Nos. 137 to 140/Asr/2013 vide order 30.05.2013 had applied the ratio laid down by the Hon'ble Gujrat High Court in Patan Nagrik Sahakari Bank Ltd. Vs DIT (CIB) (supra)and had held that the period of penalty is to be worked out from the first advisory letter issued to the assessee. The plea of ignorance of law made by the assessee therein was rejected in view of ratio laid down by the Hon'ble Gujrat High Court in Patan Nagrik Sahakari Bank Ltd. Vs DIT (CIB) (supra). But the plea of reasonable cause from the date of issue of first advisory letter was accepted by the Tribunal.
1238. The next issue raised by the ld. AR for the assessee before us is in relation to the furnishing of information in respect of the transactions relating to the sale and purchase of the property valued at Rs. 30 lacs or above. The case of the assessee is that in the absence of the awareness of the provisions of the Act and also as no TAN number was available with the assessee, information was furnished manually with the concerned officers of the Department and when the notice was issued by the said department for furnishing the requisite information. However, the information was uploaded on the NSDL on a later date. The plea of the assessee before us is that such information furnished manually be accepted as date of compliance to the provisions of section 285BA of the Act. On the perusal of the orders passed by the DIT (CIB) in ITA Nos. 431 to 434/Chd/2012 i.e. in the case of Sub Registrar, Jagadhari, we find that the said plea of the assessee has been accepted by the DIT (CIB) vide para 7 at page 5 of the order imposing penalty under section 271FA of the Act. The DIT (CIB) thereafter had accepted the date of furnishing of manual information as date of compliance to the provisions of section 285BA of the Act and had computed the penalty leviable under section 271BA of the Act upto such date i.e. in the case of financial year 2005-06, the period of penalty was determined upto 11.10.2006 i.e. of 41 days, though the information on NSDL was furnished by the assessee on a later date.
39. We find merit in the claim of the assessee in this regard in view of the provisions of section 285BA of the Act as per which the assessee can file the return either with the prescribed authority or with the authorized agency of the prescribed authority. However, under the proviso to Rule 114E(3) of the IT Rules, 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 not be available to the assessee in later years as complete 13 awareness about the provisions of the Act and the compliance through the authorized agency has been made available to the specified persons.
40. The ld. AR for the assessee has time and again referred to various replies filed before the different officers for the respective years in compliance to the notices issued under section 133(6) of the Act. Reliance was placed on the information furnished as per the reply placed at page 7 of the Paper Book. It may be brought on record that the said information has been furnished by the assessee in response to the information sought under section 133(6) of the Act in relation to the transactions between Rs. 5 lacs to Rs. 30 lacs, which is not the information sought for under section 285BA of the Act. Hence, no reliance can be placed on such replies filed by the assessee from time to time and the same have to be ignored. Similar plea was made by the assessee in respect of the other years but there is no basis of the same as the perusal of the Paper Book reflects the said information to be in respect of the properties transactions of sale value between Rs. 5 lacs and Rs. 30 lacs whereas under section 285BA of the Act, the information is to be furnished in respect of the properties sold having sale value of Rs. 30 lacs or more. The said pleas raised by the assessee are, thus rejected.
41. In the totality of the facts and circumstances and in view of our observations in the paras herein above, in-turn following the ratio laid down by the Hon'ble Gujrat High Court in Patan Nagrik Sahakari Bank Ltd. Vs DIT (CIB) (supra), we direct the Assessing Officer to recompute the penalty leviable under section 271BA of the Act and the period of penalty in furnishing the information would be computed on the basis of following directions :
1. No penalty to be levied till the first notice issued to the assessee to furnish the requisite information holding the same to be reasonable cause in not furnishing the AIRs in time. In the absence of any notice issued to the specified persons, the date of filing the first AIR would be date of notice.
2. Where the assessee had furnished manual information before the concerned authorities in respect of specified transactions of Rs. 30 lacs or more and not uploaded the said information through appointed 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.
143. No penalty under section 271FA of the Act to be imposed for the overlapping period of default. For eg. 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.
43. 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 specified person shall furnish complete information before his DIT (CIB), with regard to its several claims, in order to finally determine the period of default and the quantum of penalty leviable under section 271FA of the Act. The grounds of appeal raised by the assessee are thus, allowed as stated above.
44. In the result, appeals of the assessees are partly allowed."
14. The issue in the present case is identical to the issue raised before the Chandigarh Bench of Tribunal vide order dated 30.10.2013 and following the same parity of reasoning, we direct the Assessing Officer to recompute the quantum of penalty leviable under section 271FA of the Act in the facts of the present case in line with our observations in the said order. Reasonable opportunity of hearing shall be afforded to the assessee to lead evidence of having furnished AIRs either manually or through NSDL, whichever is earlier, before the DIT (CIB) to establish its claim. In case the assessee had alread y f i l e d t h e A I R f o r t h e f i r s t ye a r i n t i m e , t h e n h e c a n n o t b e s a i d t o h a v e n o k n o w l e d g e o f t h e p r o v i s i o n s o f t h e A c t a n d d e f a u l t , i f a n y, thereafter is attributable to the assessee which attracts levy of penalty 15 under section 271FA of the Act. The grounds of appeal raised by the assessee are allowed as indicated above.
15. In the result, appeals of the assessee are partly allowed.
Order pronounced in the Open Court on this 31st day of October, 2013.
Sd/- Sd/-
(T.R.SOOD) (SUSHMA CHOWLA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated 31st October, 2013
Poonam
Copy to:
1. The Appellant
2. The Respondent
3. The CIT
4. The CIT(A)
5. The DR
By Order
Assistant Registrar, ITAT,
Chandigarh