DR. BABASAHEB AMBEDKAR URBAN CO -OPRATIVE BANK LIMITED , NAGPUR V. DIRECTOR OF INCOME TAX (INTELLIGENCE & CRIMINAL INVESTIGATION ), NAGPUR

ITA 37/NAG/2019

AI Insights

The case involves Dr. Babasaheb Ambedkar Urban Cooperative Bank Ltd., which faced penalties for not filing the Annual Information Returns (AIRs) for several assessment years as mandated by section 285BA of the Income-tax Act, 1961. The bank argued that it was unaware of its obligation to file these returns until an inspection revealed the non-compliance. Following the inspection, the bank promptly filed the required returns for all the years in question. The Assessing Officer imposed penalties under section 271FA, which were upheld by the CIT(A). The Tribunal, however, found that the bank had a reasonable cause for its initial non-compliance, leading to the decision to delete the penalties.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 301418 (ITAT-NAGPUR)
• Duration Of Justice: 4 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 21-08-2023
• Assessment Year: 2009-2010
• Appeal Filed On: 25-02-2019
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH (At e- Court, Pune) BEFORE SHRI R.S.SYAL, VICE PRESIDENT AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER आयकर अपील सं. / ITA Nos.36 to 43/Nag/2019 नधा रण वष / Assessment Years : 2008-09 to 2015-16 Dr. Babasaheb Ambedkar Urban Cooperative Bank Ltd., Flat No.352, Laxminagar Chowk, Nagpur – 440 022, Maharashtra PAN : AAAAD0209K Vs. DIT (Intelligence & Criminal Investigation), Nagpur Appellant Respondent Assessee by : Shri Abhishek Kumar Revenue by : Shri Rishi Kumar Bisen स ु नवाई क तार ख / Date of Hearing : 22.08.2023 घोषणा क तार ख / Date of Pronouncement : 24.08.2023 आदेश / ORDER PER Bench: These eight appeals by the assessee are directed against the consolidated order passed by the CIT(A)-2, Nagpur on 12-10-2018 upholding the penalty imposed by the Assessing Officer (AO) u/s.271FA of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) for the assessment years 2008-09 to 2015-16. Since common issue is raised in these appeals, we are proceeding to dispose them off by this consolidated order for the sake of convenience. 2 ITA Nos.36 to 43/Nag/2019 Dr. Babasaheb Ambedkar Urban Coop Bank Ltd. 2. Briefly stated, the facts of the case are that the assessee is a Cooperative bank. As per the provisions of section 285BA of the Act, an obligation has been cast upon the assessee to furnish the Annual Information Return (AIR) in the requisite Form in respect of the specified transactions. The assessee did not submit this Form for any of the years under consideration. An inspection was carried out, in which it was observed that the assessee was not filing the AIRs. On being called upon to explain the reasons for non-compliance, the assessee submitted that it was not aware of the obligation to file the AIR and it was only pursuant to the inspection that this obligation came to its notice and was immediately complied with for all the years under consideration. In the opinion of the AO, the assessee ought to have the knowledge about its obligation to file the AIR. Rejecting the assessee’s contention, he imposed penalty u/s.271FA for all the years under consideration as follows : ITA No. Penalty Amount 36/Nag/2019 Rs.2,94,600/- 37/Nag/2019 Rs.2,58,100/- 38/Nag/2019 Rs.2,21,600/- 39/Nag/2019 Rs.1,85,100/- 40Nag/2019 Rs.1,48,600/- 41/Nag/2019 Rs.1,12,200/- 42/Nag/2019 Rs.1,73,800/- 43/Nag/2019 Rs.75,500/- 3 ITA Nos.36 to 43/Nag/2019 Dr. Babasaheb Ambedkar Urban Coop Bank Ltd. 3. The ld. CIT(A) echoed the penalty orders passed by the AO. Aggrieved thereby, the assessee has approached the Tribunal. 4. Having heard the rival submissions and gone through the relevant material on record, it is seen that section 285BA was inserted by the Finance Act, 2003 w.e.f. 01-04-2004. Admittedly, the assessee was under obligation to file the AIR in respect of the specified transactions. The assessee did not file AIRs ab intio. It was only pursuant to the inspection that it came to know of its obligation to file the AIRs, which obligation was discharged for all the years under consideration immediately on coming to know of it. Section 271FA imposes penalty in case of default under section 285BA. However, section 271FA is included u/s.273B, which provides that the penalty should not be imposed under the concerned sections where there exists a reasonable cause for the failure. Thus, section 271FA is subject to section 273B. The result is that if there exists a reasonable cause for not complying with the provisions of section 285BA, for which the penalty is otherwise imposable u/s 271FA, such penalty will not be levied. 5. Turning to the facts of the instant case, we find the assessee is a small urban cooperative bank. The obligation to file the AIRs u/s.285BA came into being from 01-04-2004. The assessee was not 4 ITA Nos.36 to 43/Nag/2019 Dr. Babasaheb Ambedkar Urban Coop Bank Ltd. aware of its obligation and hence never filed its AIR under the relevant section since inception. It was only pursuant to the inspection that it was made aware of its obligation of filing the AIR. Immediately thereafter, the assessee swung into action and filed the AIRs for all the years under consideration. Considering the peculiar facts and circumstances of the case, we are satisfied that there was a reasonable cause for the assessee in not filing the AIRs in terms of section 285BA of the Act. Resultantly, the penalty so imposed u/s.271FA is directed to be deleted. 6. In the result, all the appeals are allowed. Order pronounced in the Open Court on 24 th August, 2023. Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT प ु णे / Pune; दनांक / Dated : 24 th August, 2023 Satish 5 ITA Nos.36 to 43/Nag/2019 Dr. Babasaheb Ambedkar Urban Coop Bank Ltd. आदेश क त ल प अ े षत / Copy of the Order forwarded to : 1. अपीलाथ / The Appellant. 2. !यथ / The Respondent. 3. The Pr.CIT-2, Nagpur. 4. "वभागीय त न%ध, आयकर अपील य अ%धकरण, “नागप ु र” ब ' च, / DR, ITAT, “Nagpur” Bench 5. गाड फ़ाइल / Guard File. // True Copy // आदेशान ु सार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपील य अ%धकरण, प ु णे / ITAT, Pune * Date 1. Draft dictated on 22-08-2023 Sr.PS 2. Draft placed before author 23-08-2023 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order.