Income Tax Appellate Tribunal - Hyderabad
State Bank Of India, Hyderabad vs Addl.Cit (Cib), Hyderabad, Hyderabad on 21 December, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCH "A", HYDERABAD
BEFORE SHRI D. MANMOHAN, VICE PRESIDENT
AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER
ITA No. 1485/Hyd/2014
Assessment Year: 2011-12
State Bank of India, vs. Addl. Commissioner of
Hyderabad. Income-tax (CIB), Hyderabad.
PAN - AACS 8577 K
(Appellant) (Respondent)
Assessee by : Shri A.V. Raghuram
Revenue by : Shri A. Sitarama Rao
Date of hearing : 07-12-2016
Date of pronouncement : 21-12-2016
O RDE R
PER S. RIFAUR RAHMAN, A.M.:
This appeal filed by the Assessee is directed against the order of CIT(A)-VII, Hyderabad, dated 15/07/2014 for AY 2011-12.
2. Briefly the facts of the case are that Notices were issued u/s 133(6) of the I.T Act calling for certain information regarding time deposits (code 003), payments in cash for purchase of bank drafts (code 006) and deposits in cash aggregating Rs. 2,00,000 lakhs or more (code 007) etc., vide notice dated 27-09-2010. The information was to be filed by 01.11.2010. As there was no response, another notice was sent on 07-01-2011 and again on 01.03.2011 drawing the attention to the provisions of penalty under section 272A(2)(c) for non-compliance. The case was posted for hearing on 07.03.2011. As no information was filed till 30.03.2011, the AddL. CIT (CIB) felt that there was no ground or reasonable cause for the delayed compliance, 2 ITA No. 1485/H/14 State Bank of India, Hyd.
he levied a penalty for non compliance at the rate of Rs. 100/- per day for the delay of 150 days which amounted to Rs. 15,000/- in respect of each notice. Accordingly, penalty was levied for default on account of three notices at Rs. 45,000/-.
3. Aggrieved, the assessee preferred an appeal before the CIT(A), who confirmed the penalty levied by the AO by holding that inability to furnish information by the assessee-bank in spite of several reminders, notices, penalty show cause notice and even after imposition of penalty only indicates casual and indifferent approach of the bank in complying with statutory requirements.
4. Aggrieved by the order of the CIT(A), the assessee is in appeal before us raising the following grounds of appeal:
"1. On the facts and in the circumstances of the case, the order of the learned CIT(Appeals) is erroneous, illegal and unsustainable in law.
2. The learned CIT(Appeals) erred in sustaining penalty of Rs.45,000/- for the alleged default in furnishing the information. The learned CIT(Appeals) failed to appreciate that the appellant had made efforts to furnish the information but could not file it in spite of best of efforts put in by him as the same has to be drawn from its head office and further that there is no allegation of loss of revenue on account of failure to submit the information within time and thereby erred in confirming the penalty.
3. The learned CIT(Appeals) erred in holding that the alleged default in the present case is a willful default without reasoning out as to how the appellant would stand to benefit from out of such willful default. The learned CIT(Appeals) failed to consider the oral submissions made by the Branch Manager of the Appellant brining to the notice of the learned CIT(Appeals) the practical difficulty involved in filing the information in time.
4. On the facts and in the circumstances of the case, since the appellant has complied with the requirement of filing the information subsequently, the order of penalty would be illegal and unsustainable on facts."
5. The ld. AR of the assessee submitted that the delay was neither intentional nor willful as the information could not be extracted/generated at the branch level and it needed software 3 ITA No. 1485/H/14 State Bank of India, Hyd.
support and permission of head office/regional office for preparation and extraction of data from the software.
5.1 Ld. AR of the assessee filed an affidavit of the assessee, executed by its Branch Manager, for admission of additional evidence along with petition dated 15/07/2015, wherein it was affirmed as under:
"1. I am the branch manager of the appellant herein and as such I am aware of the facts of the case and competent to depose to the contents of this affidavit. I have joined the SBI Ameerpet Branch on 23rd October 2013. I am deposing to the contents of this affidavit in my official capacity and based on the information collected and the documents available at my disposal.
2. The appellant is in appeal before the Hon'ble Tribunal against the order passed by the Hon'ble Commissioner (Appeals) sustaining penalty of Rs.45,000/ - for the alleged default in furnishing of information.
3. The facts relating to levy of penalty of Rs.45,000/- is that the appellant branch was required by the Assessing Officer to file the information with respect to time deposits exceeding Rs.2 lakhs, Payment of cash for purchasing bank drafts in respect of amounts aggregating Rs.1 lakh and deposit of cash aggregating Rs.2 lakhs or more during anyone day of the customers of the Appellant branch. Apart from just filing the information, this was to be filed in the format sought by the Assessing Officer. The notices calling the above information were given on 27.09.2010. According to the information given to me by my office' branch people, information mentioned above was sought by my predecessor from Regional/Head Office. However, it is not clear at this stage as to what exactly happened thereafter.
4. I submit that when I assumed the charge in this branch the appeal was already pending and I came to know about the details of the case only when I received the notice of hearing posting the case on 3rd December 2013. Immediately, I contacted our ITS (Information Technology Service Dept.) to provide the information sought by the Assessing Officer to comply with the requirement of filing. I kept on pursuing the matter internally for the information but the information was not received. Later on, I received notice of hearing posting the case on 7th July 2014. I attended the hearing personally and explained the difficulty in getting the information and assured the learned Commissioner (Appeals) that the efforts are on and the information will be furnished at the earliest. However, to my surprise, the 4 ITA No. 1485/H/14 State Bank of India, Hyd.
Commissioner (Appeals) without giving further opportunity has passed the impugned order.
5. I have filed the appeal before the Hon'ble Tribunal against the order of the learned Commissioner (Appeals) and simultaneously I kept on trying for the information with our Regional/Head Office and ultimately the information was made available to me in the month of August 2014. I have processed the information in the format required by the Assessing Officer and submitted the same to him on 12th September 2014. As I was advised to send the information to some other address, the same was done on 19th September 2014 by sending the information to the concerned email address.
6. It is submitted that the Appellant has no willful intention not to honour the directions of the Assessing Officer. It is submitted that I came to this Branch only in October 2013 and I have pursued the case. Further, the information sought for is not with respect to current period but is related to earlier periods in respect of which the Appellant will not have ready access. The information sought for will be within the control of Regional and Head Offices and the Appellant had to take necessary approvals for gaining access to the information. That apart, the information sought for by the Assessing Officer was to be submitted in prescribed format and all the above process took some time and the Appellant could file the information only on 12.09.2014 and 19.09.2014.
7. The Appellant in support of the above facts is filing additional evidence before this Hon'ble Tribunal. It is submitted that the additional evidence is in the form of Compact Disk (CD) which contains the transactions as sought by the Assessing Officer. The additional evidence further contains documents to evidence the fact that the appellant had complied with the information called for viz., (i) Communication to the Regional Manager, SBI, dt.23.07.2014, (ii) e-mail, dt.12.09.20 14 sending the data called for and (iii) e-mail; dt.19.09.2014 sending the data called for.
8. It is submitted that the additional evidence could not be filed before the authorities below as the information was not readily available with the Appellant, and the Appellant was in the process of obtaining it from the Regional and Head Offices. It is humbly submitted that it was a first of a sought experience to the under signed on account of which he could not effectively convince the higher ups for immediate action.
9. It is respectfully submitted that there is no willful intention not to file the required information. If the Hon'ble Tribunal is not pleased to admit the additional evidence and adjudicate the issue on merits, the appellant would be put to irreparable loss."5 ITA No. 1485/H/14
State Bank of India, Hyd.
In the aforesaid circumstances, it is prayed that the Hon'ble Tribunal may be pleased to admit the additional evidence in the form of Compact Disk (CD) which contains the transactions as sought by the Assessing Officer and (i) Communication to the Regional Manager, SBI, dt.23.07.2014, (ii) e-mail, dt.12.09.20 14 sending the data called for and (iii) e-mail, dt.19.09.2014 sending the data called for, and pass such other order(s) as the Hon'ble Tribunal deems fit and proper in the interest of justice." 5.2 The ld. AR also relied on the decision of the SMC bench of this Tribunal in the case of Syndicate Bank in ITA Nos. 1501 to 1513/Hyd/14 for AY 2011-12, order dated 26/08/2015, wherein the SMC Bench, has deleted the penalty levied u/s 272A(2)(c) by observing as under:
"9. After considering the rival contentions and perusing the case law relied upon by the Ld. Counsel of the assessee, I am of the opinion that there is no need for levy of penalty in the given cases. First of all, the notice issued u/s. 136 is a general notice asking for information which is not in the domain of the ITO, CIB. The CBDT itself has prescribed certain limits for calling for information and Income tax Act also prescribes various limits for furnishing information on a regular basis from the banks in annual returns. The details asked in various codes is neither prescribed by the Act nor supported by the Board's circular. This information is specifically asked by ITO, CIB in a particular format may be on the strength of internal instructions. For example, the Time Deposits exceeding Rs. 2 Lakhs under code No. 003 is not to be generally furnished by the banks to the department in the prescribed annual return, likewise, other codes also for which different amounts were prescribed by the Act. This indicates that this information was specifically asked for by the ITO, CIB.
10. Instead of giving this separate notice for each code, a common notice was issued for all the three codes. Addl. CIT initiated penalty proceedings by issuing only one notice but levied penalty for three notices as extracted above. This indicates that without issuing notice, the Addl. CIT, CIB levied penalty three times for the same default. This cannot be justified. Not only that, there were various notices which are mentioned in the order which are not in the knowledge of assessee, therefore service of the notice also is to be doubted. As far as bank is concerned, they maintain their inward register and Ld. Counsel fairly stated that they have not received some of the notices which AO is alleged to have issued. Be that as it may, the Revenue is unable to furnish the records at present to examine whether the notices have been properly issued or not? For these reasons, it is difficult to sustain penalties as levied by the Addl. CIT.
11. Not only that, the penalty u/s. 272A(2)(c), is subject to provisions of Section 273B. Section 273B of the Act provides an exception to the rigid provisions of Section 272A by providing that in the event of assessee 6 ITA No. 1485/H/14 State Bank of India, Hyd.
having a reasonable cause for the failure, penalty shall not be imposed by the authorities concerned. As submitted by the Ld. Counsel in its case, assessee being only a branch office of the public sector bank with head Office at Manipal, it took some time to get necessary approvals and further, because of the year ending business and shortage of staff, there was delay in complying to the notice. Assessee has complied to the notices even though they are not in prescribed format nor prescribed by the Act. In view of this, I am of the opinion that there is reasonable cause for non-compliance as required and therefore, penalty u/s. 272A(2)(c) cannot be levied, where there is bonafide and reasonable cause for non- compliance to the notice. The same was reiterated by the Co-ordinate Bench in the case of M/s. Royal Metal Printers Pvt. Ltd., Vs. Addl. CIT (TDS) in ITA No. 6840/Mum/2008 dt. 29-01-2010. Since levy of penalty is not automatic but subject to reasonable cause, there is a reasonable cause explained by assessee which should have been considered by the CIT(A) at least. Considering the facts of the case as stated earlier and also the law on the subject, I am of the opinion that on the facts of the case levy of penalty is not warranted. Accordingly, penalties levied are cancelled."
6. The ld. DR relied on the orders of revenue authorities.
7. Considered the rival submissions and perused the material facts on record. The additional evidence filed by the assessee before us for the first time and since the same are vital to decide the issue in dispute, we admit the same. From the submission, it is clear that the assessee had submitted the revised information even though with a delay of 4 years. Ld. AR has brought to our notice the decision of the SMC Bench on the similar matter. As held, the notice u/s 133(6) is a general notice issued to collect information. The penalty u/s 272A(2)(c) is subject to provisions of section 273B. As per that, it provides that in the event of assessee having a reasonable cause for the failure, penalty shall not be imposed. In the given case, the notice issued calling for information on 27/09/2010 and the assessee was able to submit the information called for only on 12/09/2014. By no means, it can be called as reasonable. We appreciate the effort taken by the present Branch Manager, who followed personally only after it came to his knowledge. But the information sought is from the Bank. It clearly demonstrates the careless attitude of the personnel in the Regional/Head offices. There may be difficulty in getting approvals from the Regional/Head Office, but, it cannot take four years to submit the information called for. Even the respective officer in the 7 ITA No. 1485/H/14 State Bank of India, Hyd.
income-tax is bound to complete certain task within the reasonable time. If the information called for is submitted after 4 years, there is no relevance to the information submitted. It shows the importance given to the govt. office by the reputed banks. The reason or argument put forth by the assessee is not acceptable and in our view, the penalty levied by the AO is reasonable and it is sustained.
8. In the result, appeal of the assessee is dismissed.
Pronounced in the open court on 21 st December, 2016 Sd/- Sd/-
(D. MANMOHAN) (S. RIFAUR RAHMAN)
VICE PRESIDENT ACCOUNTANT MEMBER
Hyderabad, Dated: 21 st December, 2016
kv
Copy to:-
1) State Bank of India, Tarun Towers, 7-1-613/13, Near Durga Temple, Ameerpet, Hyderabad - 500 081.
2) Smt. Lalitha Karan, H. No. 4-5-313, Sultan Bazar, Hyderabad.
3) CIT(A) - 4, Hyderabad 4 CIT - 4 Hyderabad
5) The Departmental Representative, I.T.A.T., Hyderabad.
6) Guard File
D es c ri p t i o n Date Intls
S . N o.
ds 1. D r af t di c t at ed on S r. P . S . / P . S
2. D r af t pl ac e d be f or e a ut h or S r. P . S / P S
D r af t p ro p os ed & pl ac e d b ef o re t h e s e c on d J M/ A M
Mem b er
3
4 D r af t di s c us s e d/ a pp r ov e d b y s e c o n d Mem b er J M/ A M
5 A p pr ov e d D r af t c om es t o t he S r . P . S . / P S S r. P . S . / P . S
6. K e pt f or p r o no u nc em e nt on S r. P . S . / P . S .
7. Fi l e s en t t o t h e B e nc h C l erk S r. P . S . / P . S
8 D a t e o n w hi c h f i l e g o es t o t h e H e ad C l e rk
9 D a t e o f D i s p at c h o f o rd e r
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ITA No. 1485/H/14
State Bank of India, Hyd.