Gopal Chandak Vs ACIT (ITAT Surat)
The Income Tax Appellate Tribunal (ITAT) Surat bench has ordered the deletion of a penalty amounting to ₹43,00,000 imposed under Section 271-I of the Income Tax Act, 1961, against Gopal Chandak for the Assessment Year 2016-17. The penalty was levied by the Assessing Officer (AO) and subsequently confirmed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, for the assessee’s failure to furnish Form 15CA for outward remittances made to foreign countries for importing machinery.
The dispute arose from amendments to Section 195(6) of the Income Tax Act, which came into effect from June 1, 2015. Prior to this amendment, Form 15CA was generally required only for remittances where the income of the payee was chargeable to tax in India. The amended Section 195(6) expanded this requirement, mandating that any person responsible for paying a sum to a non-resident (not being a company) or a foreign company must furnish information relating to such payment, “whether or not chargeable under the provisions of this Act,” in a “prescribed form and manner.”
Gopal Chandak argued that while Section 195(6) was amended effective June 1, 2015, the corresponding Rule 37BB of the Income Tax Rules, which prescribes the form and manner for furnishing such information, was not updated concurrently. The relevant amendment to Rule 37BB, which extended the requirement of Form 15CA to non-taxable remittances, came into effect only from April 1, 2016.
