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2016 (11) TMI 207 - ITAT KOLKATA

2016 (11) TMI 207 - ITAT KOLKATA - TMI - Penalty u/s 271FA - delay of 561 days in furnishing AIR - whether there is sufficient cause for the assessee for noncompliance with the requirement of Section 285BA of the Act till the notice was served? - Held that:- On a careful consideration of the matter, we find that except the instant alleged breach, nothing more is alleged against the assessee. As a matter of fact, the Director of Income Tax (Intelligence and Criminal investigation) who passed the .....

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oke the penalty proceedings under section 271FA of the Act and the learned Director of Income Tax (Intelligence and Criminal investigation) should have taken note that the breach is only technical or venial breach of the provisions of the Act and such a breach could have flown from a bona fide ignorance of the assessee that he is liable to act in the manner prescribed by the statute, and should not have invoked the penalty proceedings. Thus the Penalty proceedings are liable to be set aside. - D .....

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Kol/271FA/2010- 11/MDCCBL/2012-13 and DIT(I&CI)/Kol/271FA/2011-12/MDCCBL/2012-13 dated 20.03.2013. Since grounds are common and facts are identical, we dispose of both these appeals by this common order for the sake of convenience. Since grounds are common and facts are identical, we dispose of both these appeals by taking the facts from AY 2011-12. 2. Brief facts of the case are that Durgapur Steel Peoples Cooperative Bank Limited is an entity dealing with borrowing and lending business. Un .....

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ning on or after the 1st day of April, 2004 and information relating to which is relevant and required for the purposes of this Act, to the prescribed income-tax or authority or agency. Durgapur Steel Peoples Cooperative Bank Limited an assessee falling within the ambit of Section 285BA failed to comply with this legal requirement for the period of 2010-11. A notice dated 20.02.2013 was issued by the AO. The assessee complied with the requirement of Section 285BA by filing the annual information .....

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riation in amounts: Whether on the fact and in the circumstances, ld. Director of Income Tax is justified by imposing penalty u/s 271FA . 3. It is the argument of the learned AR that the assessee explained the delay with sufficient cause and after the assessee complied with the direction within the extended time, it is not open for the authorities to resort to the penalty proceedings under section 271 FA of the Act. According to him, non-compliance with the requirement of Section 285BA of the Ac .....

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f all branches consolidated and audited, filed income Tax/TDS returns and aware of the obligations under the Act. 4. Basing on the above contentions, the point that arises for our consideration is whether there is sufficient cause for the assessee for noncompliance with the requirement of Section 285BA of the Act till the notice was served? 5. Facts are admitted. There is no dispute that the assessee, Durgapur Steel Peoples Cooperative Bank Limited is an entity falling within the ambit of Sectio .....

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nishing AIR in respect of AY 2011-12 and ₹ 19,600/- in respect of AY 2012-13 in furnishing AIR. According to the assessee, the default is not intentional, but due to ignorance of existence of such an obligation, whereas the revenue contends that there cannot be such ignorance in view of the department conducting so much of awareness campaign and the assessee complying with other obligations under the Act. 6. Learned AR placed reliance on a decision reported in Motilal Padampat Sugal Mills .....

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ield undergoes so frequent changes and amendments that it is not possible for even a person specialising in this field, including the tax administrator, to claim that he knows what exactly the law is on a particular given day or period without making references to the history of the enactments. In such circumstances, it would be a travesty of truth and justice to hold that the assessee knew or ought to have known the correct law and comply therewith, even though, in fact, he was not aware of the .....

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of conduct, contumacious or dishonest or acted in conscious disregard of its obligation and penalty will also not be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform the statutory obligation, it is stated, is a matter of discretion of the authority concerned to be exercised judicially on a consideration of all relevant circumstances and even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified i .....

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hartered accountant, for his income-tax assessment especially when the income earned or being earned by him was too low. It cannot indeed be such a policy of the Government. In fact, on the other hand, an effort was being made to simplify the law so that the people could pursue their assessments before the department in a simple manner and that they do not have necessarily to depend on the professionals. 7. Again, it is not each default that must be punished and in this respect, support can be h .....

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o the decision above, the Tribunal allowed the assessee s appeal on the following reasoning:- 8. On a careful consideration of the matter, we find that except the instant alleged breach, nothing more is alleged against the assessee. As a matter of fact, the Director of Income Tax (Intelligence and Criminal investigation) who passed the penalty order himself observed in his order vide para No 3 that the assessee got the accounts of all branches consolidated and audited, and also filed Income Tax/ .....

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d, is a well known fact, and it is equally well known fact that the legislation in this field undergoes so frequent changes and amendments that it is not possible for even a person specialising in this field, including the tax administrator, to claim that he knows what exactly the law is on a particular given day or period without making references to the history of the enactments. In these circumstances, no mala fides can be attributed to the assessee so as to invoke the penalty proceedings und .....

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are liable to be set aside. We order accordingly, Both the appeals of the assessee are allowed . 8. While placing reliance on the above principles of law, learned AR contends that the breach in question is technical and venial one and not all intended or deliberate, and the explanation of the assessee as to their ignorance of obligation is sufficient cause within the meaning of Section 273B of the Act. 9. We have heard the arguments of both the sides and also perused the relevant material availa .....

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