THE DISTRICT REGISTRAR,,SIVAGANGAI vs. DIT, CHENNAI

This is an appeal filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-2, Madurai, in dated 24.10.2016.

The Director of Income Tax, (I & CI), Chennai found that the assessee, the District Registrar, has failed to furnish AIR for financial year2009-10 within the due date, initiated penalty proceedings u/s. 271FA and levied penalty of Rs. 46,400/- for the period of 01st September, 2010 to 8th December, 2011.

Aggrieved, the assessee filed this appeal on the grounds that the CIT(A) dismissed the appeal as not maintainable which is contrary to law, erroneous and unsustainable on the facts of the case. The CIT(A) failed to appreciate that clause ‘q’ of section 246A provides for an appeal remedy from the levy of penalty under Chapter XXI and section 271FA is placed within this Chapter and hence, the dismissal of appeal is untenable in law. The CIT(A) failed to appreciate that the assessee is under statutory obligation to file AIR information, only if it exceeds monetary limit prescribed u/s. 285BA and the assessee not having exceeded the limit cannot be considered to be in default and hence the levy of penalty is unjustified and untenable in law etc. The AR also relied on the decision of the Rajasthan High Court in the case of Director of Income Tax (CIB) Vs Ravi Vijay & Another & Others, S.B. Civil Writ Petition No. 11458/2011, 11914/2011, dated 09.07.2012 which is reported in 2012 (9)

We have considered the rival submissions and gone through the copy of Rajasthan High Court’s decision filed by the AR. There is merit in the AR’s submission and hence, the issue is remitted back to the CIT(A) for deciding the appeal on merits, after giving adequate opportunity to the assessee

In the result, the assessee’s appeal is allowed for statistical purpose.