Income Tax Appellate Tribunal - Hyderabad
Sub Registrar Narapally, Hyderabad, ... vs Dit (I&Ci), Hydeabad, Hyderabad on 28 February, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCH "A", HYDERABAD
BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER
AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER
ITA No. 936/Hyd/2017
Assessment Year: 2015-16
Sub-Registrar, Narapally, Hyd. vs. Director of Income-tax
(Intelligence & Criminal
PAN - AAALS 6418 G Investigation), Hyd.
(Appellant) (Respondent)
Assessee by : Shri S. Rama Rao
Revenue by : Shri Dr. K. Srinivas Reddy
Date of hearing 20/02/2018
Date of pronouncement 28/02/2018
O RDE R
PER S. RIFAUR RAHMAN, A.M.:
This appeal of the assessee is directed against the order dated 10/03/2017 passed u/s 271FA of the Income-tax Act, 1961 (in short 'the Act') by DIT (Intelligence & Criminal Investigation), Hyderabad relating to AY 2015-16.
2. Briefly the facts of the case are, according to the DIT (Intelligence & Criminal Investigation)the assessee appointed under section 6 of the Registration Act, 1908 is 'person responsible within the meaning of section 285BA of the Act, according to which, he is required to file Annual Information Return (AIR) in Form No. 61A to the DIT (Intelligence & Criminal Investigation) by 31 st August, 2014 in respect of the specified financial transactions for the FY 2014-15. As per the DIT (Intelligence & Criminal Investigation), the return filed by the assessee is found to be defective inasmuch as the information 2 ITA No. 936 /Hyd/2017 Sub Registrar Narapally, Hyd.
found is inaccurate/incomplete. Accordingly, notice u/s 285BA(4) was issued to the assessee on 29/01/2016 requiring the assessee to rectify the defects pointed out within one month of issue of notice. As there was no compliance by the assessee to the said notice, the DIT (Intelligence & Criminal Investigation) issued a notice u/s 271FA on 31/10/206 to the assessee to show cause as to why penalty should not be imposed. Since the assessee failed to comply/furnish any reply to the said notice, DIT (Intelligence & Criminal Investigation), levied a penalty of Rs. 55,700/- for the period of 557 days during which the failure continued.
3. Aggrieved by the said order, the assessee is in appeal before us raising the following grounds of appeal:
"1 ) The order of the learned Director of Income-tax (Intelligence & Criminal Investigation) is erroneous both on facts and in law.
2) The learned Director of Income-tax (Intelligence & Criminal Investigation) ought to have seen that the appellant complied with all the provisions of Sec.285BA of the I.T. Act and that, therefore, penalty u/s 271FA of the I.T.Act is not leviable.
3) the learned Director of Income-tax (Intelligence & Criminal Investigation) ought to have considered the fact that all the information necessary u/s 285BA was furnished by the appellant and when clarification was sought revised statements were furnished and, therefore, no penalty is leviable.
4) Without prejudice, the learned Director of Income-tax (Intelligence & Criminal Investigation) erred in levying penalty against the Sub Registrar.
5) Any other ground or grounds that may be urged at the time of hearing."
4. Considered the rival submissions and perused the material on record. On perusal of record, we find that the issue in dispute is squarely covered against the assessee by the decision of the coordinate bench of this Tribunal in case of The Citizen Cooperative Society Ltd. in ITA No. 687/Hyd/2017 wherein the coordinate bench dismissed the appeal of the assessee by observing as under:
3 ITA No. 936 /Hyd/2017Sub Registrar Narapally, Hyd.
"5. We have considered the rival contentions and perused the provisions of the Act. Section 271FA is a penalty which is leviable by the prescribed Income Tax authority. The order of the DIT indicates that he is nominated to be by the Income Tax authority for accepting the returns to be filed u/s. 285BA(1). Therefore, it seems the DIT has invoked the powers of 271FA for levying of penalty. Even though there is no specific provision for appeal before this forum, nor before the CIT(A), Ld.DIT specifically gave the option to assessee to file the appeal before the Ld.CIT(A). Assessee, however took its own opinion, in the absence of clarification sought from DIT(I&CI) and preferred the appeal before this forum. 5.1. In the course of arguments, assessee's counsel was advised to prefer an appeal before the Ld.CIT(A) as directed by the DIT(I&CI) after levying the penalty in the demand notice. If the order has been passed by the Ld.CIT(A), this forum can entertain the appeal on such an order. Otherwise, assessee can choose to file a Writ Petition before the Hon'ble High Court, as this forum is only a statutory authority constituted under the Income Tax Act and the right of appeal on every order has to be statutorily provided either to the CIT(A) or to the ITAT as the case may be. Since a penalty order u/s. 271FA is not directly appealable order before this forum, the appeal preferred by assessee is liable to be dismissed.
6. However, before concluding it is not out of place to state that the Paper Book furnished before this forum indicates that assessee did in fact file statement u/s. 285BA(1) before the Income Tax authorities so the penalty levied for not filing u/s 271FA does not arise. Vide a letter dt.27-10-2016, the ITO, HQrs., in the Office of DIT(I&CI) informed the assessee that in about 120 number of transactions, PAN was not mentioned. It was further informed that "it may be noted that furnishing of incomplete and incorrect information is liable for penalty u/s. 271FAA of the Act". Assessee was asked to update the data by quoting PAN by 04-11-2016. However, the DIT(I&CI) issued a show cause notice dt. 31-10-2016 (i.e., within the time given to assessee for rectifying the return) as to why a penalty u/s. 271FA should not be levied. As placed on record, an explanation was indeed filed by assessee on 06-12- 2016, asking for a fortnight time and further another letter was filed on 28-12-2016 explaining the factual and legal position with reference to levy of penalty u/s. 271FA. There is no mention of these replies given by assessee in the penalty order passed by the DIT. Not only that the penalty order refers to a show cause letter dt. 29-01-2016, whereas show cause issued by the ITO, HQrs., is dt. 27-10-2016. The first sentence of the penalty order indicates that 'assessee is a person covered as a Registrar or Sub- Registrar appointed u/s. 6 of the Registration Act, 1908'. However, as from the facts, assessee is not a Registrar or Sub-Registrar appointed under sub-clause (6) of the Registration Act, but claiming status of a banking company, which is also yet to be adjudicated finally, as stated in reply before this forum. Even calculation of 557 days for levy of penalty at Rs. 100/- is not verifiable, given the dates involved. It seems to be a case where show cause notice was issued u/s. 271FAA (for furnishing inaccurate statement) but penalty was levied u/s. 271FA for nonfiling of statement. Assessee did indeed file a return/statement in time and if the deficiencies are not rectified, within the time allowed it has to be treated as 'invalid return' under section 285BA(4). No such action seems to have been taken by the Income Tax authority before levy of penalty u/s. 271FA. Not only taking the status of assessee but also the dates involved along with the fact that assessee did file a return as per the provisions indicates that there is no application of mind by the DIT(I&CI) before levy of penalty. There may be merit in assessee's contentions that penalty is not warranted on the facts of the case. However, as this forum cannot entertain the appeal itself, without considering the merits of the contentions, appeal memo is dismissed as infructuous.
4 ITA No. 936 /Hyd/2017Sub Registrar Narapally, Hyd.
7. In the result, memorandum of appeal is dismissed."
As the issue under consideration is materially identical to the said case, following the conclusions drawn therein, we dismiss the appeal of the assessee.
5. In the result, appeal of the assessee is dismissed.
Pronounced in the open Court on 28 th February, 2018.
Sd/- Sd/-
(P. MADHAVI DEVI) (S. RIFAUR RAHMAN)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Hyderabad, Dated: 28 th February, 2018
kv
Copy to:-
1) Sub Registrar Narapally, H.No. 11-29 Old 3-85 New Narapally, Hyderabad - 501 301
2) DIT (I & CI), Aayakar Bhavan, Basheerbagh, Hyd.
3) The Departmental Representative, I.T.A.T., Hyderabad.
4) Guard File /