THE MANAGING DIRECTOR vs. DIRECTOR OF INCOME TAX (I & CI),
What did the Tribunal hold?
The Tribunal held that Section 271FAA was introduced by the Finance (No.2) Act, 2014, effective from 01.04.2015, and was not retrospective. Therefore, penalties could not be imposed for assessment years prior to its effective date.
What were the facts?
The assessee challenged penalties imposed under Section 271FAA of the Income-tax Act for assessment years 2013-14 and 2014-15. The penalties were imposed by the Director of Income-tax (Intelligence and Criminal Investigation).
What were the issues?
Whether penalty under Section 271FAA can be imposed for assessment years prior to its effective date of introduction in the statute.
Which sections of the Income-tax Act were involved?
Section 271FAA
AI-generated summary — verify with the full judgment below
IN THE INCOME TAX APPELLATE TRIBUNAL PATNA BENCH, PATNA Before Sh. N. K. Saini, AM and Sh. Sudhanshu Srivastava, JM ITA Nos.95& 96/Pat./2016, Asstt: Year :2013-14 & 2014-15 The managing Director Vs Director of Income-tax ( 1& CI), Patna Sitamarhi Central Co-op. Bank (Bihar) Ltd , Sitamarhi. (APPELLANT) (RESPONDENT) PAN No. PTNCOOS6SF Assessee by :Shri Sanjeev Kr: Anwar Adv: Revenue by Shri Abhay Kumar, Sr. D.R: Date of Hearing 15.03.2018 Date of Pronouncement : 16 .03.2018 ORDER Per Sudhanshu Srivastava,_JM: Both these appeals have been filed by the assessee and challenge the action of the Ld. Director of the Income-tax (Intelligence and Criminal Investigation-Patna) imposing penalty u/s 271FAA of the Income-tax Act, 1961 (hereinafter referred to as "the Act") _ ITA No _ 95 / Pat/ 16 pertains to assessment year 2013-14 and the impugned penalty amounts to Rs.50,000 / - whereas ITA No.96 / Pat/2016 pertains to assessment year-2014-15 and the impugned penalty amounts to Rs.50,000 / -. 2 ITA Nos. 95 & 96/Pat./2016 2 The Ld_ AR submitted that section 271FAA of the Act was introduced in the Income-tax Act vide Finance (No.2) Act, 2014 W.e.f_ 01.04.2015 and, therefore, the penalty would not be attracted for a period prior to 01.04.2015 It was submitted that the impugned years are 2013-14 and 2014-15 and, therefore, the Ld_ Director of Income-tax (I & CI) had erred in imposing the penalty. Our attention was als0 drawn to Para 56.6 of the Memorandum explaining the provisions of Finance (No.2) Act of 2014 and it submitted that as per the Memorandum also the amendment was to take effect from 01.04.2015 and the same was not retrospective_ 3 In response, the Ld. Sr. D.R: placed reliance on the order of the Ld. Director of Income tax I& CI. 4 We have heard the rival submissions and have also perused the material on record It is undisputed that the impugned penalties have been imposed for assessment years 2013-14 and 2014-15 u/s 271FAA of the Act whereas this section was brought into the Statute by Financel No.2) Act, 2014 We.f. 01.04.2015 only and was not made retrospective. Thus, the Ld. 3 ITA Nos. 95 & 96/Pat./2016 Director of Income-tax (I & CI) has imposed the impugned penalties by invoking provisions of a section which was not in- operation for the years under consideration. Therefore, it is our considered opinion that the penalties in both the years could not have been imposed_ Accordingly , we allow the assessee s appeals and delete the penalties for both the years under consideration_ 5_ In the result, both the appeals of the assessees stand allowed_ (Order Pronounced in the Court on 16/03/2018) - N.K. Saini) - (Sudhanshu Srivastava) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 16 /03/2018 S.sinha*
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