2014 (9) TMI 545 - HC - Income Tax

High Court upholds penalty under Section 271FA for late filing.

The Sub Registrar, Rampura Phul, District Bathinda Versus Director of Income Tax (CIB), Chandigarh

The High Court dismissed the appeals concerning penalty imposition under Section 271FA of the Income Tax Act, 1961. The appellant's arguments regarding ... Penalty u/s 271FA – AIR information not furnished by appellant – Limitation u/s 275(1)(c) – Held that:- Following the decision in The Joint Sub Registrar, Sangat, District Bathinda vs. Director of Income Tax (CIB), Chandigarh [2014 (9) TMI 499 - PUNJAB & HARYANA HIGH COURT] – The assessing authority on appreciation of material had concluded that the filer of the returns was habitual defaulter without any concern or respect for the law - The plausible explanations in terms of Section 273B of the Act in the cases of Sub Registrar, Talwandi Saboo, Sub Registrar, Lambi, Sub Registrar, Malout, Sub Registrar, Maur Mandi, Sub Registrar, Doda and Sub Registrar, Rampura Phul are also similar and therefore, the levy of penalty under Section 271FA of the Act cannot be faulted – Decided against appellant. Issues:1. Interpretation of Section 271FA of the Income Tax Act, 1961 regarding penalty imposition for non-compliance.2. Consideration of bonafides and compelling reasons for delay in furnishing information.3. Assessment of natural justice principles in disposal of appeals by the Tribunal.4. Application of time limitations prescribed under Section 275(1)(c) of the Act.Issue 1: Interpretation of Section 271FA - The appellant, a Sub Registrar, was obligated to furnish Annual Information Return (AIR) under the Act. Notices were issued for non-compliance, leading to a penalty under section 271FA. The appellant cited lack of infrastructure and software as reasons for the delay. The respondent imposed a penalty, which was partially allowed by the Commissioner of Income Tax (Appeals) and further appealed to the Tribunal, which ultimately dismissed the appeal.Issue 2: Bonafides and Compelling Reasons - The appellant argued that the delay in furnishing information was due to genuine reasons, such as lack of infrastructure. The Tribunal was tasked with determining if the lower authorities had unjustly disregarded the appellant's bonafides and compelling reasons for the delay. The appellant contended that a reasonable cause existed for the delay, invoking Section 273B to avoid penalty imposition under Section 271FA.Issue 3: Natural Justice Principles - The Tribunal's decision-making process was called into question regarding the disposal of appeals. The appellant raised concerns about the Tribunal solely relying on a different case's facts while dismissing the present case, potentially violating the principles of natural justice. The issue of fairness and proper consideration of the appellant's grounds of appeal was central to this argument.Issue 4: Time Limitations under Section 275(1)(c) - The appellant challenged the penalty imposition under Section 271FA, questioning the Tribunal's decision to sustain the penalty beyond the time limitation prescribed under Section 275(1)(c) of the Act. This issue raised concerns about the legality and procedural correctness of the penalty imposition in light of statutory time constraints.In conclusion, the High Court dismissed the appeals in line with a previous decision on a similar matter. The judgment reiterated the legal stance taken in a related case, leading to the dismissal of the present appeals on their merits. The Court refrained from passing orders on applications for condonation of delay in filing the appeals, leaving the matter open.