M/S SANJAY TRADERS,KOLKATA vs. ITO, WD-37(3), KOLKATA, KOLKATA

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ITA 52/KOL/2016Status: DisposedITAT Kolkata18 October 2017AY 2006-073 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee's explanation for the delay was bona fide, considering it was the first year of FBT applicability and the return was filed upon notice during assessment proceedings. Therefore, the penalty was cancelled.

What were the facts?

The assessee, M/s. Sanjay Traders, was levied a penalty for delayed submission of its Fringe Benefit Tax (FBT) return for Assessment Year 2006-07. The assessee contended that the delay was bona fide as it was the first year FBT was introduced.

What were the issues?

Whether the penalty for delayed filing of FBT return is sustainable when it was the first year of its introduction and the delay was bona fide.

Which sections of the Income-tax Act were involved?

Section 271FB, Section 115WH

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BENCH ‘D’ KOLKATA

Before: Hon’ble Shri J.Sudhakar Reddy, AM & Shri A.T.Varkey, JM ]

Heard together (2 matters)

ITA No.52/Kol/2016
ITA No.141/Kol/2013

Read from the judgment's own cause title. This page is filed under one of them.

ORDER PER J.SUDHAKAR REDDY, AM:

This is an appeal by the Assessee directed against the order of the Commissioner of Income Tax-(A)-11, Kolkata relating to A.Y. 2006-2007 on the following grounds :- “1. That on the facts and in the circumstances of the case, Ld. CIT{A)-11 is wrong and unjustified in confirming the action of Assessing Officer who imposed penalty of Rs. 75,800/- U/s 271FB of Income Tax Act, 1961 for delayed submission of FBT Return.

2. That on the facts and in the circumstances of the case, Ld. CIT(A) in holding the assessee's explanation for delay in filing FBT return as without reasonable cause has failed to appreciate that obligation of filing FBT Return was brought in the stature for the first time in respect of Assessment Year 2006-07.

3. That the order of Ld. CIT{A)-11, Kolkata confirming the penalty U/s 271FB of Income Tax Act, 1961 is not sustainable in law in view of the jurisdictional Tribunal's decision in dated 06.08.2015 in case of M/s. Ashok Trading Co. - Vs - ITO, Ward-45(2)Kolkata.

4. That the appellant craves leave to add, alter, adduce or amend any ground on or at the time of hearing of the appeal.”

-M/s. Sanjay Traders A.Y.2006-07 2

2.

After hearing the rival contentions we find that the explanation given by the assessee for not filing the FBT return within the time prescribed u/s 115WH is bona fide. This was the first year where FBT was brought into the statute and the assessee was required to file a FBT return. The AO issued notice during the course of assessment proceedings and consequently the assessee filed FBT return in response. Under similar circumstances the Hon’ble ITAT ‘B ‘Bench in the case of M/s. Ashok Trading Co. vide order dated 06.08.2015 at para 8 held as follows :- “8. We have considered the submissions of both the parties and have perused the records of the case. There is no dispute that the assessee was required to file the return of Fringe Benefit. As per sub-section (2) of section 115WD, if the assessee had not filed the return of Fringe Benefit but in the opinion of Assessing Officer he should have filed the return, the Assessing Officer would issue notice requiring it to file such return, but no such notice was issued by the Assessing Officer. All the facts came to the notice of the Assessing Officer only in the course of assessment proceedings and there is no charge of the Department that the assessee concealed any particulars or submitted inaccurate particulars of income. No doubt, there is specific requirement of filing the return of income, but since it was the first year of applicability of Fringe Benefit Tax, when FBT return was required to be filed and due taxes were paid by assessee, therefore, we are of the opinion that the default on the part of the assessee cannot be considered as malafide and we cancel the penalty for non-filing of return.”

3.

As the facts are similar, we are convinced that the explanation of the assessee is a bona fide one. Under these circumstances we cancel the penalty levied u/s 271FB of the Income Tax Act, 1961 (Act) and allow this appeal of the assessee.

4.

In the result the appeal of the assessee is allowed. Order pronounced in the Court on 18.10.2017.

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