THE HALOL URBAN CO. OP. BANK LTD.,HALOL vs. THE DIRECTOR OF INCOME TAX(I&CI), AHMEDABAD

The solitary ground of appeal of the assessee is directed against the decision of ld. CIT(A) in levying penalty of Rs. 73,000/- u/s. 271Fof the Act.

3. The fact in brief is that ld. Director of Income Tax (I & CI) has passed order u/s. 274 r.w.s. 271FA on 17th October, 2017 and levied penalty of Rs. 73,000/- u/s. 271FA for failing to file SFT-O14 for assessment year 2017-18 for which the last data was expired on 31st Jan, 2016. The ld. Director of Income Tax (I & CI) stated that two notices on 11th April, 2017 and 1st June, 2017 were issued directing the assessee to file the SFT-014 failing which penalty would be leviable @ Rs. 500 per day for each day of failure commencing on 21st June, 2017 since the assessee bank had not responded to the notices therefore penalty was worked out at Rs. 73,000/-.

During the course of appellate proceedings before us, the ld. counsel has contended that assessee was unaware of non-filing of SFT return for F.Y. 2016-17 and it came to its knowledge only after a notice received by it from the office of the Director of Income Tax (I & CI) Ahmedabad on receipt of notice, the SFT return 014 for F.Y. 2016-17 was filed electronically on 28th March, 2019. The ld. counsel has also submitted that from Jan, 2017 premises of the company was under renovation therefore notices stated in the penalty order by the Director of Income Tax (I & CI) were not received by the bank and even the Page No 3 The Halol Urban Co. Op. Bank Ltd. vs. Director of Income Tax ( I & CI) penalty order levied u/s. 271FA was also not received by the bank. On the other hand, ld. Departmental Representative has supported the order of Director of Income Tax (I & CI)

Heard both the sides and perused the material on record. The assessee is a co-operative bank engaged in the business of banking. The bank is required to file SFT return (statement of special finances transaction) u/s. 285BA of the Act. In view of the provision of section 285BA of the act, the assessee was required to file annual information return in relation to F.Y. 2016-17 on or before 31st Jan, 2016 and the assessee has failed to comply with the said statutory requirement. Therefore, the Director of Income Tax (I & CI) accordingly levied the penalty u/s. 271FA for the period of delay at Rs. 79,000/-. The penalty amount was worked out as under:- (a) Rs.14,000/- For the delay of 140 days from 01/02/2017 to 20/06/2017@ Rs. 100/- per day;

In the result, the appeal of the assessee is partly allowed.