2021 (10) TMI 1417

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....Ld. CIT(A) in confirming the penalty levied by the Director of Income Tax u/s 271FA of the Income-tax Act,1961 ['the Act' for short] for non-filing of Annual Information Return as required under Rule 114E of the I.T. Rules. 2. The Ld. A.R. submitted that the assessee is a co-operative bank. He submitted that the impugned penalty was levied by Ld. Director of Income Tax (Intelligence & Criminal Investigation) in all the eight years for filing Annual Information Return, which is required is required to be filed as per provisions of section 285BA(2) read with Rule 114E of the Income Tax Rules beyond the due date prescribed. The Ld. A.R. submitted that the assessee is a cooperative bank and the co-operative banks were specifically in....

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.... "co-operative Bank" with effect from 01-04- 2016. He invited our attention to the provisions of Rule 114E before amendment and post amendment. He submitted that the pre-amended provisions are applicable to the year under consideration and the relevant portion read as under :- "A Banking Company to which Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of the Act.)" He submitted that the above said portion was amended by IT (Twenty second Amendment) Rules 2015 w.e.f. 01-04-2016 as under:- "A Banking Company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred t....

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....ice that the original provisions of Rule 114E of Income tax Rules did not include "co-operative bank" and it was inserted only in the amended provisions of Rule 114E, which came into effect from 1.4.2016. Accordingly, in our view, there is merit in the submission of the ld A.R that there existed an ambiguity as to whether the co-operative banks are required to comply with the provisions of Rule 114E of the Act, meaning thereby, the bonafide belief of the assessee shall constitute reasonable cause in terms of sec.273B of the Act for the failure in furnishing the AIR for the year under consideration. In this view of the matter, the impugned penalty is liable to be deleted. Accordingly we set aside the order passed by Ld CIT(A) and direct the ....