Kalathiya Impex Vs ACIT (ITAT Surat)
No penalty under section 271-I was leviable for non filing of Form 15CA/15CB against the payment of import of goods
Conclusion: No penalty under section 271-I was leviable against the payment of import of goods for non filing of Form 15CA/15CB as Income Tax Rules were amended w.e.f. from 16/12/215, in which the list of payments of specified nature mentioned in Rule 37BB, which did not require submission of Forms 15CA and 15CB, has been expanded from 28 to 33 which included advance payment against import.
Held: Assessee was engaged in the business of manufacturing of diamond by cutting and polishing of rough diamond and sale thereof. During assessment, Assessing Officer noted that assessee has made 20 transactions of foreign remittance. Assessee submitted that ground of appeal raised by assessee was squarely covered by the decision of this Tribunal in case of Shrirang Sales Corporation vs. ACIT in ITA No.147/SRT/2023 dated 28.07.2023 and ACIT vs. M/s Vinay Diamonds in ITA No.103/SRT/2020 dated 26.06.2023. Assessee made payment to Belgium based foreign entity against the import of rough diamond. The remittances made against the import of rough diamond did not attract provision of withholding tax and the requirement to furnish the details under section 196(6) r.w.s. Rule 37BB of the IT Rules was not mandatory. Form No.15CA/15CB were required to be submitted only in those payments which were chargeable tax in India and therefore later on the Government amended the provision of 196(6) by Notification No. G.S.R 978(E) dated 16.12.2015. Assessee submitted that while amending Rule 37BB of the IT Rules for making compliance in Form No.15CA, no corresponding amendment was made in Form No.15CA which was amended subsequently while Notification No. G.S.R 978(E) dated 16.12.2015. Assessee submitted that exactly on similar ground of appeal, the penalty deleted by CIT(A) order dated 13.02.2020 in the case of M/s Vinay Diamonds which was confirmed by this Tribunal in ITA No.103/SRT/202. Revenue submitted that sub-section 6 of Section 195 was substituted with effect from 06.2015, wherein it was made mandatory that person responsible for making payment to non-resident, not being a company or to a foreign country any sum whether or not chargeable under the provision of the said amendment information relating to payment of such sum, in the manner as may be prescribed for making such compliance corresponding amendment was made in Rule 37BB for making compliance in Form No.15CA/15CB/15CC. AO considered 17 foreign remittances for which assessee was required to furnish Form15CA/ 15CB and levied penalty @ Rs.1,00,000/- for each of the default aggregating Rs.17,00,000/- vide penalty order dated 28.06.2019. On appeal. It was held that following the decision in case of M/s Vinay Diamond in ITA No.103/SRT/2020 and Shrirang Sales Corporation in ITA 147/SRT/2023 wherein it was concluded by considering the Notification No.G.S.R.978(E) dated 16.12.2015 issued by Central Board of Direct Taxes held that there were certain payment of specified nature mentioned in Rule 37BB which did not require submission of Form No. 15CA/15CB and one of such payment included advance payment against import. therefore, no penalty was leviable against the payment of import of goods.
