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1 - 10 of 10 (0.23 seconds)Section 271FA in The Income Tax Act, 1961 [Entire Act]
Section 285 in The Income Tax Act, 1961 [Entire Act]
The Income Tax Act, 1961
Hindustan Steel Ltd vs State Of Orissa on 4 August, 1969
However, it appears from the penalty and appeal orders, that
the assessee did not file any such request before the ld. AO. Instead, he filed a
delayed correction statement on 29.03.2022 and also on 2.08.2022, which was
beyond the time allowed by the ld. AO. Since, the period for the correction of the
defective statement is extendable by the ld. AO on the receipt of an application
from the assessee in this behalf, though we are in agreement with the views of the
ld. CIT(A) that in the absence of any application seeking extension of time, the
failure to rectify the defective statements within the time period allowed
constitutes a breach of the provisions, but considering that the assessee has
rectified the defects to the satisfaction of the ld. AO shortly thereafter, i.e. on
29.03.2022 and again 2.08.2022 - i.e. before the levy of penalty under section
271FAA, we feel that even though the breach is there, it is a technical or venial
breach of the nature that would be covered by the judgment of the Hon'ble
Supreme Court in the case of Hindustan Steel Limited vs. State of Orissa (1972) 83
ITR 26 (SC) (supra) because the action of the filer in seeking to rectify the defective
SFTs even before the issue of penalty notice, is indicative of its intention to make
compliance to the notice issued by the Assessing Officer under section 285BA(4)
and penalty ought not to be levied only on account of failure to file an application.
The fact that other more well organized institution, may be able to respond to a
notice under section 285BA(4) within the specified time frame, cannot be a ground
to dismiss the arguments of the assessee that it was handicapped in making
compliance within the due dates due to the need to collect the data from various
branches, because this depends upon the working environment and level of
computerization including banking solutions adopted by each institution.
Therefore, observing that the failure to correct the defects within the due time
limits was a technical breach and that the assessee has subsequently rectified the
defective SFTs and we feel that the penalty levied under section 271FAA is not
justified for such a technical breach of the provisions. Accordingly, we delete the
same.
Amarjit Motor Finance Private Limited, ... vs Acit, Central Circle-26, New Delhi on 29 January, 2021
The
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ITA Nos.78 & 79/LKW/2025
District Cooperative Bank Limited
A.Ys. 2019-20 & 2021-22
assessee had also sought assistance in re-submitting the SFT 001 and SFT 002 that
instead of providing this assistance, the ld. CIT(A) had confirmed the penalty
levied by the ld. AO. The ld. AR furnished a paper book in which the provisional
receipt of the statement showing zero number of reports for both SFT 001 and SFT
002 were uploaded by the assessee on 13.10.2023. He also drew our attention to
page 3 of his paper book which contained an affidavit from the General Manager
of DCB Limited, Shahjahanpur that since there was no reportable financial
transactions falling under the code of SFT 001 and SFT 002 i.e., "purchase of bank
drafts or pay orders in cash" and, "purchase of prepaid instruments in cash", no
statement of SFT 001 and SFT 002 was filed before the due date. However, these
statements with nil transactions were filed on 13.10.2023. The ld. AR also drew
our attention to the decision of the ITAT Delhi 'H' Bench in the case of Motor &
General Finance Limited vs. ACIT, Circle-25(1), New Delhi in ITA No.
841/DEL/2023, wherein the ITAT, Delhi Bench had held that where the assessee
was under a bona fide belief that no return was required to be filed since there
were no reportable transactions, that in itself was a reasonable cause under
section 273B for not levying the penalty under section 271FA of the Act.
Accordingly, it had deleted the said penalty.
Branch Manager, Ajmer Central ... vs Jdit (I & Ci), Jaipur on 20 December, 2016
10. We have duly considered the facts and circumstances of the case. With
relation to the levy of penalty of Rs. 9,73,000/- under section 271FA for the A.Y.
2019-20, we note that the provisions of section 285BA(1) cast an obligation upon
certain specified persons who are responsible for registry or maintaining books of
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ITA Nos.78 & 79/LKW/2025
District Cooperative Bank Limited
A.Ys. 2019-20 & 2021-22
accounts or other documents containing a record of any specified financial
transactions or any reportable account, as may be prescribed, to furnish a
statement in respect of such specified financial transaction or such reportable
account which is registered or recorded or maintained by him to the Income Tax
authority. From the same it follows that the obligation to file a statement of
specified financial transaction only arises where there is a specified financial
transaction. If there is no specified financial transaction, then there is no
corresponding obligation to file a statement of search. We note from the affidavit
submitted by the General Manager, by way of additional evidence and in support
of his consistent statements made before the lower authorities, that there were no
specified transactions which would have obliged the assessee to report them
under SFT 001 and 002. Therefore, there could not be any obligation upon the
assessee to file SFT 001 and SFT 002 in the absence of any specified financial
transactions pertaining to those codes. We are in complete agreement with the
views expressed by the Coordinate Benches in the cases of M/s Guntur District
Cooperative Central Bank Limited vs. DIT (I & CI) (supra) and Motor & General
Finance Limited vs. ACIT, Circle-25(1), New Delhi (supra) that where there exists
no financial transactions, the assessee would be under a bona fide belief that he is
not required to file any statement of specified financial transactions. Accordingly,
there can be no justification for the levy of penalty under section 271FA on account
of the failure to file a statement of financial transactions, unless it can be shown
that there were specified financial transactions that ought to have been reported.
We accordingly delete the penalty of Rs. 9,73,000/- levied for the A.Y. 2019-20
under section 271FA. With regard to the penalty of Rs. 50,000/- under section
271FAA, we noticed that the ld. AO had issued a notice to the assessee to rectify
the defects on 31.12.2021 and the Act prescribes that the same is to be rectified
within a period of 30 days or within such period which, on an application made in
this behalf. However, the said Income Tax Authorities may in their discretion allow
a further period for the correction of such defect. Thus, the assessee could either
rectify the defect before 31st of January or request additional time for the filing of
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ITA Nos.78 & 79/LKW/2025
District Cooperative Bank Limited
A.Ys. 2019-20 & 2021-22
the corrected SFTs.
Section 273B in The Income Tax Act, 1961 [Entire Act]
M/S. Venus Township India (P) Ltd, ... vs The Dcit. Central Circle-1(1), ... on 12 November, 2020
10. We have duly considered the facts and circumstances of the case. With
relation to the levy of penalty of Rs. 9,73,000/- under section 271FA for the A.Y.
2019-20, we note that the provisions of section 285BA(1) cast an obligation upon
certain specified persons who are responsible for registry or maintaining books of
7
ITA Nos.78 & 79/LKW/2025
District Cooperative Bank Limited
A.Ys. 2019-20 & 2021-22
accounts or other documents containing a record of any specified financial
transactions or any reportable account, as may be prescribed, to furnish a
statement in respect of such specified financial transaction or such reportable
account which is registered or recorded or maintained by him to the Income Tax
authority. From the same it follows that the obligation to file a statement of
specified financial transaction only arises where there is a specified financial
transaction. If there is no specified financial transaction, then there is no
corresponding obligation to file a statement of search. We note from the affidavit
submitted by the General Manager, by way of additional evidence and in support
of his consistent statements made before the lower authorities, that there were no
specified transactions which would have obliged the assessee to report them
under SFT 001 and 002. Therefore, there could not be any obligation upon the
assessee to file SFT 001 and SFT 002 in the absence of any specified financial
transactions pertaining to those codes. We are in complete agreement with the
views expressed by the Coordinate Benches in the cases of M/s Guntur District
Cooperative Central Bank Limited vs. DIT (I & CI) (supra) and Motor & General
Finance Limited vs. ACIT, Circle-25(1), New Delhi (supra) that where there exists
no financial transactions, the assessee would be under a bona fide belief that he is
not required to file any statement of specified financial transactions. Accordingly,
there can be no justification for the levy of penalty under section 271FA on account
of the failure to file a statement of financial transactions, unless it can be shown
that there were specified financial transactions that ought to have been reported.
We accordingly delete the penalty of Rs. 9,73,000/- levied for the A.Y. 2019-20
under section 271FA. With regard to the penalty of Rs. 50,000/- under section
271FAA, we noticed that the ld. AO had issued a notice to the assessee to rectify
the defects on 31.12.2021 and the Act prescribes that the same is to be rectified
within a period of 30 days or within such period which, on an application made in
this behalf. However, the said Income Tax Authorities may in their discretion allow
a further period for the correction of such defect. Thus, the assessee could either
rectify the defect before 31st of January or request additional time for the filing of
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ITA Nos.78 & 79/LKW/2025
District Cooperative Bank Limited
A.Ys. 2019-20 & 2021-22
the corrected SFTs.
Keb Hana Bank, Chennai vs Joint Director Of Income Tax, Chennai on 10 August, 2023
6. Aggrieved with the said levy of penalty, the assessee went in appeal before
the ld. CIT(A). Before the ld. CIT(A), it was submitted that the ld. AO was not
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ITA Nos.78 & 79/LKW/2025
District Cooperative Bank Limited
A.Ys. 2019-20 & 2021-22
justified in levying the penalty without considering that the corrected SFT Codes
003 and 004 was duly filed on 2.08.2022 in compliance to the notice dated
27.07.2022 in which the date of compliance was fixed on 8.08.2022. It was further
submitted that all the necessary corrections had been made by the assessee on
2.08.2022. The assessee also placed reliance on the decision of KEB Hana Bank vs.
Joint Director of Income Tax ITAT Chennai in ITA Nos.440, 441 & 442/CHNY/2023
dated 10.08.2023 in which the ITAT had held that where the defect was rectified
within the time as provided under section 285 BA (4) of the Act, the penalty was
not leviable.
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