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This appeal is filed at the instance of the assessee pertaining to Assessment Year 2016-17 and is directed against the order of Ld. Director of Income Tax(I&CI) (in short ‘DIT(I&CI), Bhopal dated 19.02.2018 framed u/s 271FA r.w.s. 274 of the Income Tax Act 1961(In short the ‘Act’).
The assessee has raised following grounds of appeal;
That on the facts and in the circumstances of the case and in law, the learned DIT(I&CI) has erred in imposing penalty of Rs.33,000/- u/s 271FA of the Act for non filing of AIR return without considering
Sub Registrar Sarangpur reasonable cause. The appellant craves, leave to add, alter or amend any of the foregoing grounds of appeal if and when necessary.
3. The assessee has solely challenged the levy of penalty of Rs.33,000/- u/s 271FA of the Act.
Brief facts as culled out from the records are that the assessee is a State Government authority i.e. Officer of Sub-Registrar of Sarangpur, A.B. Road, Sarangpur, Rajgarh which was under a legal obligation to file Annual Information Report but did not file the report. Ld. Director of Income Tax (I & CI) primarily issued notice u/s 285BA(1) of the Act which remained unattended. Thereafter notice u/s 285BA(5) of the Act was issued for non-compliance of the provisions of section 271FA and finally penalty @ 500 per day was imposed for delay of 66 days running from 29.11.2017 to 02.02.2018, totalling to Rs.33,000/-.
Against the levy of this penalty assessee is in appeal before the Tribunal.
At the outset, Ld. Counsel for the assessee submitted that there was no intentional delay on the part of the assessee. Regular correspondence was going on between the assessee. Chief Commissioner of Income Tax and Pr. Secretary to Department of Revenue, Ministry of Finance for error in e-governance on digital platform. Ld. Counsel for the assessee prayed that the assessee’s case falls under the 273B of the Act and no penalty should have been levied as there was a reasonable cause for the failure. 2
Sub Registrar Sarangpur
Per contra Ld. Departmental Representative vehemently argued and supporting the order of Ld. Director of Income Tax (I&CI).
We have heard rival contentions and perused the records placed before us. The assessee has challenged the levy of penalty u/s 271FA of the Act at Rs.33,000/- computed for delay of 66 days @ 500 per day.
We observe that the assessee is required to file Annual Information Report (in short AIR) to the Income Tax Department. For F.Y. 2014-15, the report has been duly filed on 27.08.2015 but for financial year 2015-16 the assessee could not file. From perusal of the paper book we observe that on 08.08.2016 there was a communication from Chief Registering Authority to all the sub- registrar informing that e-registration facility will be commenced from 01.07.2015 and for the period 01.04.2015 to 31.07.2015 and information is to be provided to the Income Tax Department through AIR. Again there was a communication in July 2018 by Chief Registering Authority to the Income Tax Department relating to information in respect of properties registered and also discussing about the problem faced in integration of the Income Tax Department with e-registering portal. Again on 22.11.2017 was a letter issued by Pr. Secretary Department of Commercial Tax to the Chief commissioner of Income Tax about the problem faced in the integration of income Tax Department E-portal and department of Registration for a web enabled portal for e-registration of the document pertaining to immovable properties since July 2015. 3
Sub Registrar Sarangpur Further on 10.01.2018 a letter was submitted by the Deputy Secretary Department of Commercial Tax to the Secretary Finance Department of Revenue with the subject of pro-active approach from the department under digital Indian Programme and ease of doing business initiate. It was also through this letter the Income Tax department was conveyed a plan of getting their portal integrated with department of Registration and Stamp portal so that manual intervention can be stopped. All the series of communications on various dates which mainly fall during the period for which the notices were issued to the assessee between 08.11.2017 to 02.02.2018 are sufficient enough to prove that there was no intentional delay on the part of the assessee. Such circumstances need to be examined in the light of provisions of section 273B of the Act which reads as follows: Penalty not to be imposed in certain cases 273B. Notwithstanding anything contained in the provisions of clause (b) of sub- section (1) of] 3 section 271, section 271A, 271AA, section 271B 4 [271BA] [section 271BB,] section 271C, section 271CA section 271D, section 271E, Section 271F [section 271FA] section 271FAB [section 271FB] [section 271G]] [section 271GA] [section 271GB] [section 271H] [section 271-I] [section 271J] clause (c) or clause (d) of sub- section (1) or sub- section (2) of section 272A, sub- section (1) of section 272AA] or 5 sub- section (1) of section 272BB or] clause (b) of subsection (1) or clause (b) or clause (c) of sub- section (2) of section 273, no penalty shall be imposable on the pet- son or the assessee, as Sub Registrar Sarangpur the case may be, for any failure referred to in the said provisions if he proves that there was reasonable cause for the said failure.]
In our considered view the case of the assessee clearly u/s 273B of the Act as the assessee had a reasonable cause for the said failure to file Annual Information Report on time which was finally submitted on 29.08.2018. Therefore, in these circumstances no penalty should have been imposed on the assessee u/s 271FA of the Act. We, accordingly delete the penalty levied u/s 271FA of the Act of Rs.33,000/- and allow the sole ground raised by the assessee.
In the result the appeal of the assessee is allowed. The order pronounced in the open Court on 19.12.2019.