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The Sub Registrar, Bassi Pathana, Distt. Fatehgarh Sahib:

Asstt. Year Date of order of CIT(A) Penalty levied u/s 271FA 2006-07 26.4.2012 Rs.33,400/-

2009-10                   -do-                                         Rs.10,100/-

The Sub Registrar, Nabha, Distt. Patiala:

Asstt. Year               Date of order of CIT(A)                      Penalty levied u/s 271FA
2005-06                   .4.2012                                    Rs.60,700/-
2006-07                   -do-                                         Rs.33,300/-
2008-09                   -do-                                         Rs.13,700/-
2009-10                   -do-                                         Rs.35,300/-

5. The Sub Registrar, Bassi Pathana and also the Sub Registrar, Nabha, Distt. Patiala furnished the Annual Information Returns in the c a p t i o n e d a s s e s s m e n t ye a r s l a t e . 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 dated 20.10.2010 ( in Punjabi) was that the office of the assessee was not aware about the filing the AIR. In r e s p o n s e t h e r e t o t h e A I R f o r f i n a n c i a l ye a r 2 0 0 9 - 1 0 w a s f i l e d o n 20.10.2010. In second communication the filer stated the reasons for late filing of AIR due to rush of work. Further reply of the assessee dated 28.1.2011 is reproduced by the DIT (CIB) Officer under para 5.3 at page 3 of the assessment order in which it was admitted that the Sub Registrar was not aware of change in law regarding filing of AIR information. Further because of acute shortage of staff and handling of many departments, AIR information was submitted voluntarily though late. 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. Further, he had no knowledge of intention of legislature in getting the AIR information in time, since it onl y contains the information to be provided to the Income Tax Department regarding registration of immovable properties of above Rs.30 lakhs. No benefit or advantage had_been derived by the assessee b y virtue of such act of filing AIR information late. The DIT (CIB) rejecting the explanation offered by the assessee on account of various contentions under para 6 of the assessment order, held the assessee to be liable for levy of penalty under section 271FA of the Act. As the 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 u n d e r consideration, 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.

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.

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.

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.