Income Tax Appellate Tribunal - Chandigarh
The Sub Registrar, Kaithal vs Assessee on 17 September, 2013
I N T H E I NC O ME T A X A P PE L L A T E T RI B U N AL
C H A NDI G A RH B E N CH E S ' B ' CH A N DI G A RH
BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER
AND MS SUSHMA CHOWLA, J UDIC IAL MEMBER
ITA Nos.208, 249 to 251/Chd/2012
A.Ys: 2007-08 to 2009-10
The Sub Registrar, Vs The Director of Income Tax(CIB),
Dhand, Chandigarh.
Distt. Kaithal.
PAN No.RTKJ-02962G
(Appellant) (Respondent)
A p p e l l a n t b y: Shri Ajay Jain
Respondent by : Shri Akhilesh Gupta
Date of Hearing : 17.09.2013
&
ITA Nos. 209,252 to 255/Chd/2012
A.Ys. : 2005-06 to 2009-10
The Sub Registrar, Vs The Director of Income Tax(CIB),
Guhla, Chandigarh.
Distt. Kaithal.
PAN No.RTKS-14369F
(Appellant) (Respondent)
A p p e l l a n t b y: Shri Ajay Jain
Respondent by : Shri Akhilesh Gupta
Date of Hearing : 17.09.2013
&
ITA Nos. 210 & 239 to 242/Chd/2012
A.Ys : 2005-06 to 2009-10
The Sub Registrar, Vs The Director of Income Tax(CIB),
Kaithal. Chandigarh.
PAN No.RTKS-14343G
(Appellant) (Respondent)
A p p e l l a n t b y: Shri Ajay Jain
Respondent by : Shri Akhilesh Gupta
Date of Hearing : 17.09.2013
2
&
ITA Nos. 211,235 to 238/Chd/2012
A.Ys : 2005-06 to 2009-10
The Sub Registrar, Vs The Director of Income Tax(CIB),
Siwan, Chandigarh.
Distt. Kaithal.
PAN No. : RTKJ02967G
(Appellant) (Respondent)
A p p e l l a n t b y: Shri Ajay Jain
Respondent by : Shri Akhilesh Gupta
Date of Hearing : 17.09.2013
&
ITA Nos. 212 & 247 to 248/Chd/2012
A.Ys. : 2007-08 to 2009-10
The Sub Registrar, Vs The Director of Income Tax(CIB),
Pundri, Chandigarh.
Distt. Kaithal.
PAN No.RTKJ-14343A
(Appellant) (Respondent)
A p p e l l a n t b y: Shri Ajay Jain
Respondent by : Shri Akhilesh Gupta
Date of Hearing : 17.09.2013
&
ITA Nos. 243 to 246/Chd/2012
A.Ys. : 2006-07 to 2009-10
The Sub Registrar, Vs The Director of Income Tax(CIB),
Rajound, Chandigarh.
Distt. Kaithal.
PAN No.RTKJ-02952F
(Appellant) (Respondent)
A p p e l l a n t b y: Shri Ajay Jain
Respondent by : Shri Akhilesh Gupta
Date of Hearing : 17.09.2013
&
ITA Nos. 93 to 95/Chd/2012
A.Ys. : 2007-08 to 2009-10
The Sub Registrar, Vs The Director of Income Tax(CIB),
(Tehsildar), Sector 17-C,
Sadhoura, Chandigarh.
Distt. Yamuna Nagar.
PAN No.RTKJ-02942C
(Appellant) (Respondent)
3
A p p e l l a n t b y: None
Respondent by : Shri Akhilesh Gupta
Date of Hearing : 17.09.2013
&
ITA Nos. 185, 186 & 187/Chd/2012
A.Ys. 2005-06, 2008-09 & 2009-10
The Sub Registrar, Vs The Director of Income Tax(CIB),
Indri, Chandigarh.
Karnal.
PAN No.RTKS-11657C
(Appellant) (Respondent)
A p p e l l a n t b y: None
Respondent by : Shri Akhilesh Gupta
Date of Hearing : 17.09.2013
Date of Pronouncement : 31.10.2013
O R D E R
PER SUSHMA CHOWLA, J.M.
The bunch of appeals have been filed by different assessees against different orders of the CIT(Appeals) relating to assessment y e a r s v a r yi n g b e t w e e n 2 0 0 5 - 0 6 t o 2 0 0 9 - 1 0 r e s p e c t i v e l y a g a i n s t t h e penalt y levied under section 271FA of the Income Tax Act, 1961 ( 'the Act' for short ). All these appeals relating to different Sub Registrars on similar issue were heard together and are being disposed of by this consolidated order for the sake of convenience.
Reference is being made to the facts in different sets of appeals in order to adjudicate the issue.
2. Despite issue of notice, none appeared on behalf of the assessee in ITA Nos. 93 to 95/Chd/2012 and ITA Nos. 185 to 187/Chd/2012 and we proceed to dispose off the present appeals as identical issues have been raised.
43. In ITA Nos. 208 to 212/Chd/2012 and ITA Nos. 235 to 255/Chd/2012, the assessee has raised identical grounds of appeal.
The grounds of appeal as raised in ITA No. 208/Chd/2012 read as under :
1) That The Ld. DIT(CIB) and Ld. CIT(A) has grossly erred in holding that filer is a habitual defaulter without any concern /respect for the law of the land despite the filer had filed the information in the form and manner as required by the Income Tax Officer, Ward 4, Kaithal.
2) That The Ld. DIT (CIB) and CIT (A) has failed to appreciate that the Provisions of section were new and there was no clarity even to Income Tax Officer, Ward 4, Kaithal who has issued notices for filing information, as to mode and manner of filing information under section 285BA of I.Tax Act.
Moreover, there was no Chartered Accountant or advocate in the filer's department to help or assist him.
3) That The Ld CIT(A) is unjustified in not appreciating that there was no intention of the filer not to file Informations U/s 285BA on CD instead of Informations filed U/s 285BA to I.Tax Office, Ward 4, Kaithal , manually so he had complied with requirements of Sec. 285BA of I.T. Act, which is reasonable cause covered u/s 273B of I.T. Act.
4) That The Ld. DIT(CIB) and CIT(A) has grossly erred in not appreciating that the ITO, Ward 4, Kaithal could and should have intimated to the filer about defect in not submitting the information in CD form to the NSDL instead of their office as provided in Section 285BA(4)of I.T.Act.
5) That The Ld. DIT(CIB) and CIT(A) has grossly erred in appreciating that the mistake of the filer is of technical nature and has not caused any revenue loss to the Exchequer.
4. In all the other appeals heard ex-parte, the assessee has raised i d e n t i c a l g r o u n d s o f a p p e a l e x c e p t v a r i a t i o n i n a m o u n t o f p e n a l t y.
The grounds of appeal as raised in ITA No. 185/Chd/2012 read as under:
"1. That the Ld. CIT (A) is not justified in concurring with the action of the A.O. in upholding the penalty levied u/s 271FA of the Income Tax Act, 1961 without passing a speaking order and without appreciating the facts of the present case which is against the established principles of law, so that so the orders of Id. CIT (A) are illegal, arbitrary and bad in law and by Tribunal.
2. That the Ld. CIT (A) is not justified in concurring with the A.O. and thereby confirming the levy of penalty without considering the fact that it is a case of Government Undertaking and there being no malafide intentions or intentional mistake or delay but for 5 reasonable cause and there being only Technical Breach and also there being no Revenue Loss to the Department and thus the orders of CIT (A) are bad in law and requires due consideration by this Hon'ble Bench.
3. That without prejudice to above the appellant disputes the very findings of the A.O. and its confirmation by the Id. CIT (A) without appreciating the facts and circumstances, evidences on record which is also against the principles of Natural Justice.
5. The only issue raised in the present appeal is against penalty levied under section 271FA of the Act.
6. The Sub Registrar/s in the present bunch of appeals furnished t h e 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 late. 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 imposed. The explanation of the assessee vide written reply was that the office of the assessee was not aware about the filing of the AIR and also because of non-obtaining of TAN, the information could not be filed. In second communication the filer stated the reasons for late filing of AIR was due to rush of work. It was further stated that the Sub Registrar was under a bona fide belief that as there was no tax involvement it would not make any difference if the return was not submitted in time. The DIT (CIB) rejecting the explanation offered by the assessee on account of various contentions under para 7 of the assessment order, held the assessee liable for levy of penalty under section 271FA of the Act.
A s t h e a s s e s s e e h a d f i l e d t h e A I R l a t e f o r a l l t h e f i n a n c i a l ye a r s under consideration despite advisory letters issued from time to time, the assessee was held to be the habitual defaulter without any concern/respect to the law of the Land. The Assessing Officer levied penalty under section 271FA of the Act @ Rs.100/- per day of the period of default.
67. The CIT(Appeals) after considering the issue observed vide para 1.06 to 1.08 as under :
1.06 In the written submissions, the appellant submitted that the AIR was filed manually/CD as 8s when required by various officials of the Income Tax Department and enclosed copies of some letters. The same are examined and it is noted that one of these letters was issued by the ITO Ward-3, Kaithal per which request was made to the appellant to supply a copy of the above statements filed to the CIB (Chandigarh) for the financial years 2006-07, 2007-08 & 2008-09. In response to which, the same was provided per covering letter dated 29.10.2009. In view of these facts, it cannot be said that the said information was filed as per section 285BA(1) of the Act. The appellant further filed a copy of his office letter dated 04.10.2007 wherein it is stated that the requisite information was already provided per letter dated 04.04.2007.The appellant subsequently filed photocopy of the Despatch Register of Reply No. 348 dated 04.04.2007 wherein it is specified;
"Requisition of information of person savings non agriculture land & market value exceeding Rs.15 Lac regarding"
From the extracts of the despatch register, it is noted that the information was not stated to be furnished u/s 285BA(1) of the Act. Neither the copy of the letter of the AO nor the period for which the information was filed has been specified in this letter. Otherwise also, the ITO Kaithal was not the prescribed authority u/s 285BA(1) of the Act to call for the information under this section. The appellant further enclosed a copy of his office letter dated 17.07.2007 which is addressed to the ITO, Karnal. The position with reference to this letter is also the same as was in the case of the other letters discussed above, i.e., neither the reference of the letter of the ITO nor the details of the information submitted per this letter has been specified in this letter. 1.07 In view of the facts discussed above, the plea of the appellant that the AIR returns were filed manually/CD as & when required by the various officials of the Income Tax Department is not tenable.
1.08 The appellant further took the plea that filling of AIR was relatively a new provision and was not having assistance of Chartered Accountants or Advocates etc. and hence was not aware of statutory obligation u/s285BA of the Act. The plea of the appellant is considered. The first year for which the AIR was to be filed, was F.Y. 2004-05 and hence plea of ignorance of law could be taken for the first year from which these provisions were made effected. In this regard, it is noted that the DIT(CIB) specifically noted in para 7 of the penalty order that the Filer has not responded even the advisory letters and show cause notice and various letters issued to him from time to time. In the other similar cases, it is noted that first of such letters was issued on 21.11.2006 and as such maximum benefits can be allowed of not considering the delay in filling the return up to that date, i.e., 21.11.2006.
7In view of other issues raised, the CIT(Appeals) held that the delay was not of technical nature and upheld levy of penalty under section 271FA of the Act.
8. In ITA Nos. 208, 249, 250 and 251/Chd/2012 i.e. in the case of Sub Registrar, Dhand, the ld. counsel for the assessee pointed out that no notice was issued by the authorities for filing the information i n r e s p e c t o f f i n a n c i a l ye a r s 2 0 0 6 - 0 7 t o 2 0 0 8 - 0 9 a n d t h e f i r s t n o t i c e issued by the authorities was dated 06.11.2009, copy of which is placed at page 6 of the Paper Book which in-turn was complied with as per the information placed at page 7 of the Paper Book. The assessee claims to have furnished the manual information by way of registered post. However, no evidence of having sent the same by post was filed by the assessee. The ld. AR for the assessee further pointed out that as no taxes were due to the department, the default being venial, does not attract the levy of penalty as held by the Chandigarh Bench of the Tribunal in the Collector Land Acquisition, Department of Industries & Commerce, Chandigarh Vs Addl. CIT (TDS) Chandigarh in ITA Nos. 1226 to 1229/Chd/2011 vide order dated 09.03.2012. Further reliance was placed on Patan Nagrik Sahakari Bank Ltd.Vs DIT (CIB) Gujrat) [338 ITR 167 ] that wherein it has been held that if there was compliance after the issue of notice, the penalty can be imposed for non-compliance after the issue of notice and not before it. Another reliance was placed by the ld.
counsel for the assessee on Sequola Construction Co. P.Ltd. & Ors.
Vs ITO 158 ITR 496 (Del) for the plea of reasonable cause. Further stating that where there was a bonafide compliance of law, though belated, could not be held to be justified for levy of penalty in the case.
89. The ld. DR for the revenue pointed out that the correspondence referred to by the assessee was in respect of the replies filed before the Assessing Officer and not before the DIT)CIB), who was the prescribed authority. Further, the assessee had failed to furnish the information in f l o p p y/ C D . Further, in respect of ITA No. 235/Chd/2012, the ld. DR for the revenue pointed out that the response placed at page 10 of the Paper Book talks of another letter and not the letter referred to b y the assessee. It was pointed out by the ld. DR for the revenue that the reliance on the ratio laid down by Chandigarh Bench in Collector Land Acquisition, Department of Industries & Commerce, Chandigarh Vs Addl. CIT (TDS) Chandigarh (supra) is misplaced as it talks of the ratio laid down by the Hon'ble Supreme Court in Hindustan Steel Ltd.(supra) which has been distinguished by the Gujrat High Court in Patan Nagrik Sahakari Bank Ltd.Vs DIT (CIB) Gujrat) (supra). Further reliance was placed on the ratio laid down by the Amritsar Bench in the case of Sub Registrar Vs DIT (CIB) in ITA Nos. 137 to 140/Asr/2013, in the case of other Sub Registrar. The ld. DR for the revenue pointed out that the first advisory letter in ITA 208/Chd/2012 was issued on 21.11.2006 and the CIT(Appeals) has deleted the penalty under section 271FA of the Act for the period upto 21.11.2006 as per para 6.1 Further reliance was placed by the ld. DR for the revenue on the earlier submissions made in the cases of Sub Registrar, Jagadhari Vs DIT (CIB) and Others with lead appeal in ITA Nos. 431 to 434/Chd/2012.
10. The ld. AR pointed out that similar submissions are being made in case of all the other Sub Registrars, and the same may be adopted for adjudicating the issue.
911. We have heard the rival submissions and 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 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.10
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 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 11 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 C I T v . K a n u b h a i 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 ) on which reliance has been placed on behalf of the petitioner.
29. The Hon'ble Supreme Court in Motilal Padampat Sugar Mills Co.Ltd. Vs. State of Uttar Pradesh & Others [118 ITR 326(S.C.)] had held that there is no presumption 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 12 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.
33. 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 13 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.
38. 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 14 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 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 15 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.
3. 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.16
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."
12. The issue in the present case is identical to the issue raised before the Chandigarh Bench of Tribunal vide order dated 30.10.2013 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. The assessee is directed to furnish the information before the DIT (CIB). The grounds of appeal raised by the assessee/s are allowed as indicated above.
13. 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 31stOctober, 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