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TMI Blog2023 (8) TMI 638X X X X Extracts X X X X X X X X Extracts X X X X ..... eported 16 accounts in the statements filed for CY 2017, 2018 & 2019. Accordingly, the above discrepancy was brought to the notice of the Reporting Entity vide letter dated 30.03.2021 and requested to rectify and furnish the details for the same. After considering the replies of the Reporting Entity, the Prescribed Authority has observed that the Statement of Reportable Account furnished under sub section (1) to section 285BA of the Act for the above calendar years were inaccurate on account of omission of one saving of Mr. SinmoSoan (Account No. 8206000515) and 15 Term Deposit accounts of the same person, a notice under section 274 r.w.s. 271FAA of the Act dated 28.07.2021 was issued to the Reporting Entity requiring it to show-cause as to why the penalty under section 271FAA of the Act should not be levied against the Reporting Entity for furnishing inaccurate statement of reportable accounts. After considering the submissions of the Reporting Entity, the Prescribed Authority has completed the penalty order by levying penalty of Rs..50,000/- each under section 271FAA of the Act for filing inaccurate Statement of Reportable Account for the CY 2017, CY 2018 and CY 2019. 3. The Rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has factored by way of sub-section (6) of section 285BA, to every such reporting entity to inform the Department voluntarily of the errors/omission within 10 days of such initial reporting and file a revised statement. A penalty u/s 271FAA was introduced to ensure due compliance to this 'Due diligence' requirement considering the seriousness of such reporting requirement as per the tax treaties with various countries on exchange of information. The captioned assessee in appeal, a foreign bank was found, under reporting of certain reportable transactions of three Calendar years 2018, 2019 and 2020. This was detected during the course of random inspection by the Department in March, 2021. This detection of omission to report by the Department was almost nearly after three years, two years and one year from the respective year's original statement furnishing. It was only after the Department had pointed out the omission, in reporting of some vital high value transaction/asset, did the assessee bank re-look at their Due diligence' process which further lead to detection of 1192 transaction in Calendar year 2018, 855 transaction in the Calendar year 2019 and 510 transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 114H of IT Rules and not on account of non furnishing of a rectified statement within the timeline permitted under sub-section (4) of the section 285BA. It is requested that the above written submission may kindly be taken on record while passing the order. 6. Per contra, the ld. Counsel for the Reporting Entity has filed separate but identical written submissions for each assessment years of the Reporting Entity. The written submissions for the assessment year 2018-19 are reproduced as under: Assessment Year 2018-2019 Appeal No. ITA 440/CHNY/2023 This is with reference to the captioned appeal for the assessment year 2018-2019. The facts are as follows: 1. KEB Hana Bank is a foreign bank operating in India as Scheduled Commercial Bank. 2. KEB Hana Bank filed Form 61B under section 285BA for the calendar year 2017 on 30.5.2018, within the time allowed (Statement ID 602557816300518). 3. KEB Hana Bank was advised by the Income Tax Officer, Intelligence and Criminal Investigation, Chennai, vide letter dated 30.3.2021, to rectify the discrepancy in the filed Form 61B. 4. KEB Hana Bank filed revised Form 61B on 8.4.2021 (Statement ID 493055004080421) and a further revise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stigation, Chennai vide his letter dated 30.3.2021 were duly rectified and revised/rectified Form 61B was filed on 8.4.2021 and 15.4.2021, within the time allowed under section 285BA(4). 2. No penalty is leviable under section 271 FAA since there was no inaccuracy in the revised/rectified Form 61B filed by KEB Hana Bank. 3. There is no loss to the revenue. 4. It is an acknowledged and judicially recognized fact that the tax laws of this country are complex and complicated. It is equally well known fact that the legislation in this field undergoes so frequent changes and amendments that it is not possible for the Banks software to be updated so frequently. Also, due to the mammoth data base at the bank, it is not practical nor possible to manually gather data for this reporting. Case laws in support of our contention (As per Annexure B): [2016] 74 taxmann.com 97 (Kolkata - Trib.) IN THE ITAT KOLKATA BENCH 'B' - Durgapur Steel Peoples' Cooperative Bank Ltd. v. Director of Income-tax (Intelligence & Criminal Investigation), Kolkata [2016] 72 taxmann.com 306 (Kolkata - Trib.)[03-08-2016] - IN THE ITAT KOLKATA BENCH 'A'- Malda District Central Co-op Bank Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement of Reportable Account only after the omission was brought to the notice of the Reporting Entity on the basis of details available with the Department and not on its own. On appeal, the ld. CIT(A) has observed that the time allowed for correction of defects/discrepancy was not duly met by the Reporting Entity and accordingly, confirmed the penalty levied by the Prescribed Authority for the CY 2017, 2018 and 2019. 6.1 Before us, the ld. Counsel for the Reporting Entity has contended that the Reporting Entity has duly rectified the defect and revised/rectified Form 61-B was filed within the time allowed under section 285BA(4) of the Act. We have perused the relevant provisions of section 285BA(4) of the Act and the same are reproduced as under: (4) Where the prescribed income-tax authority considers that the annual information return furnished under sub-section (1) is defective, he may intimate the defect to the person who has furnished such return and give him an opportunity of rectifying the defect within a period of one month from the date of such intimation or within such further period which, on an application made in this behalf, the prescribed income-tax authority may, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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