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2023 (9) TMI 1148 - ITAT BANGALOREPenalty u/s 271FA - not filing the Annual Information Report (AIR) for the relevant AY - main contention of AR before the Tribunal was that there is reasonable cause as mandated u/s 273B for not filing the AIR for the relevant AY - ambiguity as to whether the cooperative banks are required to comply with the provisions of Rule 114E - HELD THAT:- It is clear that in terms of Sl.Nos.1 and 2 of the Table under Rule 114E(2) of the Rules, before 01.04.2015 only banking companies or banking institutions (which includes the provisions of section 51 of the Banking Regulation Act, 1949) but not the provisions of section 56 or Part V of the Banking Regulation Act, 1949, that deals with Co-operative Societies were required to file the AIR. The co-operative banks have been brought within the ambit of Sl. Nos.1 to 4 of Table under Rules 114E(2) after 01.04.2015 and prior to that, the assessee being a Souhardha Sahakari, there was ambiguity as to whether Co-operative Banks are required to comply with the provisions of Rule 114E of the Rules, meaning thereby, the bonafide belief of the assessee would constitute a reasonable cause as mandated as per section 273B of the Act for the failure to furnish AIR for the relevant years under consideration. As decided in the case of Mandya District Co-operative Bank Ltd [2020 (3) TMI 1455 - ITAT BANGALORE] there is merit in the submission of the ld A.R that there existed an ambiguity as to whether the cooperative 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. The assessee has demonstrated reasonable cause under section 273B of the Act and considering the same, we delete the levy of penalty under section 271FA - Appeals of the assessee are allowed.
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