M/s Guntur District Co-operative Central Bank Ltd. Vs Director of Income Tax (ITAT Visakhapatnam)
Conclusion: Penalty under 271FA was unjustified as there was no requirement to file the AIR in absence of reportable transaction during the financial year and also, department did not make out a case that the assessee had the recorded re portable transactions in the relevant financial year.
Held: In the instant case, assessee did not file the AIR for the F.Y. 2010-11 to 2015-16 relevant to the A.Ys 2011-12 to 2016-17 before the due date. Therefore, DIT (I&CI)] had issued notice u/s 274 r.w.s. 271FA and called for explanation from assessee as to why penalty should not be levied for the assessee’s failure to file AIR before the due date. Assessee filed explanation, but not being convinced with the explanation offered by assessee, DIT imposed penalty u/s 271FA for the F.Y. 2010-11 to 2015-16. It was held combined reading of section 271FA and section 285BA showed that a person was obliged to furnish the AIR, only, when there was existence of reportable transaction or specified transaction which required to be reported u/s 285BA. In case of no reportable transaction/ specified transaction during the financial year, there was no requirement to file the AIR. In the instant case, as there were no reportable transactions/specified transactions which required to be reported u/s 285BA r.w.Rule 114E. Therefore, there was no obligation cast upon assessee to fie the return u/s 285BA for the F.Y. 2010-11 and 2011-12. Department did not make out a case that the assessee had the recorded reportable/specified transactions in the relevant financial year, therefore, in the absence of any specified transaction required to be reported u/s 285BA, assessee was not obliged to file the AIR and levy of penalty u/s 271FA was unjustified.
FULL TEXT OF THE ITAT JUDGEMENT
These appeals are filed by the assessee against the order of the Commissioner of Income Tax (Appeals) [CIT(A)]-1, Guntur dated 21.05.2018 for the Assessment Years (A.Ys.) 2011-12 to 2016-17. The grounds raised in these appeals are common, hence the appeals are clubbed, heard together and disposed off in common order for the sake of convenience as under.
2. In this case, the assessee is required to file Annual Information Return (AIR) u/s 285BA of the Income Tax Act (hereinafter called as ‘Act’). For the Financial Years (F.Ys) 2010-11, 2011-12, 2012-13, 2013-14, 2014-15 and 2015-16 (relevant to the A.Ys 2011-12 to 2016-17) the AIR has to be filed by 31st August of the succeeding financial year. For example, AIR for the F.Y 2010-11 required to be filed on or before 31st August 2011. In the instant case, the assessee did not file the AIR for the F.Y. 2010-11 to 2015-16 relevant to the A.Ys 2011-12 to 2016-17 before the due date. Therefore, the Director of Income Tax (Intelligence & Criminal Investigation) [DIT (I&CI)] (in short ‘DIT’), Hyderabad had issued notice u/s 274 r.w.s. 271FA of the Act and called for explanation from the assessee as to why penalty should not be levied for the assessee’s failure to file AIR before the due date. The assessee filed explanation, but not being convinced with the explanation offered by the assessee, the DIT imposed penalty u/s 271FA for the F.Y. 2010-11 to 2015-16 as under :
