2019 (9) TMI 1476 - AT - Income Tax

Tribunal Affirms Penalty for Non-Compliance Under Income Tax Act, Dismissing Appeal Due to Lack of Reasonable Cause.

M/s. Muvattupuzha Service Co-operative Bank Limited Versus The Joint Director of Income-tax (I & CI) Kochi.

The Tribunal concluded that the ITO (Intelligence) had jurisdiction to issue the notice under Section 133(6) of the Income Tax Act after obtaining ... Penalty proceedings u/s 272A(2)(c) r.w.s. 274 - assessee non - furnishing the information called for u/s 133(6) - HELD THAT:- On identical facts the Cochin Bench of the Tribunal in the cases of Kakoor Service Co-operative Bank Ltd. [2018 (1) TMI 548 - ITAT COCHIN] had held that the penalty imposed u/s 272A(2)(c) of the Act is valid. Assessee has not offered any valid reason for not furnishing the information called for u/s 133(6) of the Act. AO has mentioned that when they had approached, the assessee Society, for seeking information u/s 133(6) of the Act, there was total lack of co-operation on the part of the assessee society as well as threat (reference order imposing penalty u/s 272A(2)(c) in appeals. Since there is no reasonable cause furnished by the assessee as mentioned u/s 273B of the IT Act for non furnishing of information sought by the ITO(intelligence) u/s 133(6) of the Act, the order imposing penalty cannot be quashed. - Decided in favour of revenue. Issues Involved:1. Jurisdiction of ITO (Intelligence) to issue notice under Section 133(6) of the Income Tax Act.2. Limitation period for passing the penalty order under Section 272A(2)(c).3. Existence of reasonable cause for non-furnishing of information under Section 133(6).Detailed Analysis:1. Jurisdiction of ITO (Intelligence) to issue notice under Section 133(6) of the Income Tax Act:The assessee contended that the Income Tax Officer (Intelligence) did not have the authority to issue a notice under Section 133(6) of the Income Tax Act. The Tribunal referred to the amendment introduced by the Finance Act 1995, which expanded the power to call for information even when no proceeding was pending, provided prior approval from the Director or Commissioner was obtained. The Tribunal cited the Supreme Court’s decision in Kathiroor Service Co-op Bank Ltd vs CIT, which upheld the power of the ITO (CIB) to issue such notices. The Tribunal concluded that the ITO (Intelligence) had jurisdiction to issue the notice under Section 133(6) after obtaining the necessary approval from the Director of Income Tax (Intelligence).2. Limitation period for passing the penalty order under Section 272A(2)(c):The assessee argued that the penalty order was time-barred under Section 275(1)(c) of the Income Tax Act. The Tribunal clarified that Section 275(1)(c) prescribes the time limit for imposing penalties, which is either after the expiry of the financial year in which the proceedings are completed or six months from the end of the month in which action for imposition of penalty is initiated, whichever is later. In this case, the penalty proceedings were initiated on 12.08.2014, and the penalty order was passed on 19.09.2014, well within the prescribed time limit. The Tribunal dismissed the contention that the time limit should be reckoned from the date of the notice issued under Section 133(6).3. Existence of reasonable cause for non-furnishing of information under Section 133(6):The assessee claimed there was a reasonable cause for not furnishing the information as required under Section 133(6). The Tribunal noted that the assessee had not provided any valid reason for the non-compliance and that many notices issued by the ITO (Intelligence) went unanswered. The Tribunal also mentioned instances where the assessee society showed a lack of cooperation and even issued threats. Given the absence of a reasonable cause as stipulated under Section 273B, the Tribunal upheld the penalty imposed under Section 272A(2)(c).Conclusion:In light of the Tribunal’s order in similar cases, it was held that the CIT(A) was justified in upholding the penalty order under Section 272A(2)(c) of the Income Tax Act. Consequently, the appeal filed by the assessee was dismissed. The Tribunal pronounced the order on 04th September 2019.