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2023 (3) TMI 36
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....ions of law and facts of the case and not in conformity with the law, hence the same may kindly be deleted in full. 3. The appellant prays your honour indulgences to add, amend or alter or any of the grounds of the appeal on or before the date of hearing. 2. The brief facts of the case are that the assessee is registered under Cooperative Society Act and carrying on banking business such as accept deposits, sanctioning loan etc, in rural areas to farmers and other small business persons. The ld. Add/JDIT(I&CI) noted that the assessee was required to file Statement of Financial Transaction as per Sec. 285BA of the IT Act, 1961 r.w.r. 114E of the IT Rules, 1962 for the financial year 2018-19. He stated that for the period under consideration the due date of filing the Statement of Financial Transaction was 31/05/2019. Since the appellant failed to file the Statement of Financial Transaction, that is why the ADDL./JDIT (I&CI), Jaipur issued a notice u/s 285BA(5) on 20/12/2019 which was served upon the appellant on 30/12/2019 for furnishing Statement of Financial Transaction on or before 28/01/2020. In want of compliance of notice he issued a show cause notice u/s 271FA on ....
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....ar default. Taking into account the overall facts and circumstances, as discussed above, the ld. CIT (A) holding that the AO was justified in imposing penalty u/s 271FA of the Act of Rs. 1,50,000/-, he confirmed the order of the AO. Now, being aggrieved by the order of ld. CIT (A), assessee has filed the appeal before the Tribunal :- Ground Nos. 1 and 2 are inter-related and relates to imposition of invalid penalty of Rs. 1,50,000/- under section 271FA of the IT Act, 1961. 3. Before us the ld. Counsel for the assessee submitted his written submissions as under :- "1. Correct facts and position of law not considered: At the very outset it is submitted that as the assessee under Co-operative Society Act and carrying on banking business such as accept deposits, sanctioning loan etc, in rural areas to farmers and other small business persons. During the course of penalty proceedings the assessee has filed the SFT statements admittedly and also filed the reason for delay in filling. The reasons of delay was that the bank is working with 15 branches at different places in Jhalawar district and in some cases branches are situated in rural areas where due to network....
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....n respect of AY 2011-12 and Rs.19,600/- in respect of AY 2012-13-Held, as matter of fact, DIT (Intelligence and Criminal investigation) who passed penalty order himself observed in his order that assessee got accounts of all branches consolidated and audited, and also filed Income Tax/TDS returns-Order of DIT (Intelligence and Criminal investigation) did not speak as to how assessee stood to gain by contravening with provisions of Section 285BA or act of assessee resulted in any loss to Revenue-Further, it was acknowledged and judicially recognized fact that tax laws of this country were complex and complicated and often required for compliance, there with assistance of tax practitioners specializing in this field, was well known fact, and it was equally well known fact that legislation in this field underwent so frequent changes and amendments that it was not possible for even person specializing in this field, including tax administrator, to claim that he knew what exactly law was on particular given day or period without making references to history of enactments-In these circumstances, no mala fides could be attributed to assessee so as to invoke penalty proceedings u/s. 271FA ....
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....f the consultants/counsel if any a poor assessee should not be suffered. In the case of HTSL Community Service Trust vs. JDIT(EXEMPTIONS) (2012) 31 CCH 0251 Bang. Trib Charitable Trust-Failure to furnish return within due date-Penalty u/s 272A-Assessee, a registered public charitable trust filed return of income belatedly after the expiry of the due date-AO levied penalty u/s 272A(2)(e) for not filing the return of income within the due date as prescribed in section 139 of the Act-Penalty may be imposed u/s 272A(2)(e) for failure to furnish the return of income in accordance with the provisions of section 139(4A) rws 139(1)-An attempt of deliberateness or deceptiveness is associated with the word 'failure'-In the present case, there was no deliberateness or deceptiveness in not filing the return of income within the prescribed time limit-Assessee was under a bonafide belief that securing recognition u/s 80G would be a pre requisite for filing the return of income-However, immediately on being appraised, the income tax returns were filed for all the years without any further delay-The delay in filing the return was not intentional or deliberate-Since the entire inco....
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....ained by the assessee nor any loss to the revenue: Further it is submitted that as per provisions the assessee should have filed the SFT. However by one and other reasons the same could not be filed in due time however the assessee has filed the same with the delay. Anyhow in our view there is loss occurred to the revenue nor assessee has benefited for delay I filling. As there is no tax liability arises on assessee on such delay filling. 5. Prayer: In view of the above submission the penalty so imposed by the lower authority may kindly be deleted in full." 4. On the other hand, the ld. D/R supported the order of the Revenue authorities. 5. We have heard the learned Counsels for both the parties and perused the material available on record. We noticed that the assessee Society is registered under the Co-operative Society Act and carrying on banking business such as accepting deposits, sanctioning loans etc. in rural areas to farmers and other small business persons. During the course of penalty proceedings, the assessee has filed the Statement of Financial Transaction (SFT) admittedly and also filed the reasons for delay in filing. However, the revenue authorities ha....
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.... of provisions and such breach could have flown from bonafide ignorance of assessee that he was liable to act in manner prescribed by statute, and should not have invoked penalty proceedings. In this regard we draw strength from the decision of Coordinate Bench of ITAT Kolkata in ITA No. 1322 & 1323/Kol/2013 dated 23rd September, 2016 (2016) 48 CCH 0072 (Kol. Trib.) in case of Durgapur Steel Peoples Cooperative Bank Ltd vs. Director of Income-tax wherein it has been held that - "Penalty-Penalty for failure to furnish annual information return- Obligation to furnish annual information return-Durgapur Steel Peoples' Cooperative Bank Limited was entity dealing with borrowing and lending business-Under provisions of s 285BA, every person who was assessee or other categories enumerated there and responsible for registering or responsible for registering, or, maintaining books of account or other document containing record of any specified financial transaction, under any law for time being in force, should furnish annual information return, in respect of such specified financial transaction which registered or recorded by him during any FY beginning on or after 1st day of April....
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....enial breach of law and the conduct of the assessee in the particular has not been shown to be contumacious and no deliberate defiance of law is established on record by the revenue authorities. Therefore, while relying upon the decision of Hindustan Steels vs. State of Orissa, 83 ITR 26 (SC), wherein the Hon'ble Supreme Court has held that - "That in order to impose penalty for failure to carry out a statutory obligation is the result of quasi criminal proceedings and penalty will not ordinarily be imposed, unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligation. The Supreme Court has further laid down that penalty will not be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority and is to be exercised judiciously and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed the authority competent to impose the penalty, will be justified in refusing to impose penalty when there is a technical or venial breach ....