The South Canara District Central Co-operative Bank Ltd, Mangalore V. The Director Of Income Tax (Intelligence and Criminal Investigation), Bengaluru

ITA 382/BANG/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4320 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 05-10-2021
• Assessment Year: 2007-2008
• Appeal Filed On: 10-08-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAVISHANKAR S V
• Keywords: Bonafide belief; Reasonable cause; Set aside
• Section: 273B

Judgement Text

ITA NO.174 TO 177 & 381 TO 384/BANG/2021 THE SOUTH CANARA DISTRICT CENTRAL CO-OP. BANK LTD., MANGALORE IN THE INCOME TAX APPELLATE TRIBUNAL ABENCH: BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NOS.174 TO 177 &ITA NOS.381 TO 384/BANG/2021 ASSESSMENTYEARS:2006-07 TO 2009-10 & 2010-11 TO 2013-14 RESPECTIVELY THE SOUTH CANARA DISTRICT CENTRAL CO-OPERATIVE BANK LTD. 14-7-1011, POST BOX NO.721 SADASHIVA SAHARA SADANA, KODIALBAIL MANGALORE, DAKSHINA KANNADA KARNATAKA-575 003 PAN NO :AABAT6621N VS. THE DIRECTOR OF INCOME TAX (INTELLIGENCE AND CRIMINAL INVESTIGATION) BENGALURU APPELLANT RESPONDENT APPELLANT BY : SHRI RAVISHANKAR S.V., A.R. RESPONDENT BY : MS. NEERA MALHOTRA, D.R. DATE OF HEARING : 05.10.2021 DATE OF PRONOUNCEMENT : 05.10.2021 O R D E R PER BENCH: ALL THESE APPEALS FILED BY THE ASSESSEE ARE DIRECTE D AGAINST THE ORDERS PASSED BY LD. CIT(A)-2, PANAJI AND THEY RELA TE TO THE ASSESSMENT YEARS 2006-07 TO 2013-14. THE ASSESSEE IS CHALLENGING THE DECISION OF LD. CIT(A) IN CONFIRMING THE PENALT Y LEVIED BY THE DIRECTOR OF INCOME TAX U/S 271FA OF THE INCOME-TAX ACT,1961 ['THE ACT' FOR SHORT] FOR NON-FILING OF ANNUAL INFORMATIO N RETURN AS REQUIRED UNDER RULE 114E OF THE I.T. RULES. ITA NO.174 TO 177 & 381 TO 384/BANG/2021 THE SOUTH CANARA DISTRICT CENTRAL CO-OP. BANK LTD., MANGALORE PAGE 2 OF 4 2. THE LD. A.R. SUBMITTED THAT THE ASSESSEE IS A CO -OPERATIVE BANK. HE SUBMITTED THAT THE IMPUGNED PENALTY WAS L EVIED BY LD. DIRECTOR OF INCOME TAX (INTELLIGENCE & CRIMINAL INV ESTIGATION) IN ALL THE EIGHT YEARS FOR FILING ANNUAL INFORMATION RETUR N, WHICH IS REQUIRED IS REQUIRED TO BE FILED AS PER PROVISIONS OF SECTION 285BA(2) READ WITH RULE 114E OF THE INCOME TAX RULES BEYOND THE DUE DATE PRESCRIBED. THE LD. A.R. SUBMITTED THAT THE ASSESS EE IS A CO- OPERATIVE BANK AND THE CO-OPERATIVE BANKS WERE SPEC IFICALLY INCLUDED IN RULE 114E ONLY W.E.F. 1.4.2016 ONLY. H ENCE, THERE WAS AN AMBIGUITY AS TO WHETHER THE CO-OPERATIVE BANKS A RE REQUIRED TO COMPLY WITH THE PROVISIONS OF RULE 114E OF THE RULE S OR NOT. HENCE, THERE WAS DELAY IN FILING THE ANNUAL INFORMATION RE TURN, WHICH WAS ON ACCOUNT OF BONA FIDE BELIEF ONLY. THE LD. A.R. SUBMITTED THAT THE ABOVE SAID BONAFIDE BELIEF SHALL CONSTITUTE A REASO NABLE CAUSE IN TERMS OF SECTION 273B OF THE ACT. IN SUPPORT OF HI S SUBMISSIONS, HE PLACED HIS RELIANCE ON THE ORDER DATED 13.3.2020 IN THE CASE OF THE MANDYA DISTRICT CO-OP. CENTRAL BANK LTD. VS. DIT (I &CI) IN ITA NO.447/BANG/2019 DATED 13.3.2020. ACCORDINGLY, HE PRAYED FOR DELETION OF PENALTY LEVIED U/S 271FA OF THE ACT IN ALL THE 3 YEARS UNDER CONSIDERATION. 3. THE LD. D.R., ON THE CONTRARY, SUPPORTED THE ORD ERS PASSED BY LD. CIT(A). 4. WE HEARD THE RIVAL CONTENTIONS AND PERUSED THE R ECORD. WE NOTICE THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED BY THIS BENCH IN THE CASE OF THE MANDYA DIST. CO-OP. CENTRAL BANK LT D. (SUPRA). FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE RELEV ANT OBSERVATIONS MADE BY THE TRIBUNAL IN ABOVE SAID CASE: 5. THE ASSESSEE CHALLENGED THE PENALTY LEVIED U/S 271FA OF THE ACT BY FILING APPEAL BEFORE LD CIT(A), BUT THE SAME WAS DISMISSED. HENCE THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. ITA NO.174 TO 177 & 381 TO 384/BANG/2021 THE SOUTH CANARA DISTRICT CENTRAL CO-OP. BANK LTD., MANGALORE PAGE 3 OF 4 6. THE LD A.R SUBMITTED THAT THERE WAS REASONAB LE CAUSE FOR THE ASSESSEE IN NOT FILING THE AIR. HE SUBMITTED THAT THE PROVISIONS OF RULE 114E SPECIFICALLY INCLUDED CO-OPERATIVE BANK WITH EFFECT FROM 01-04- 2016. HE INVITED OUR ATTENTION TO THE PROVISIONS O F RULE 114E BEFORE AMENDMENT AND POST AMENDMENT. HE SUBMITTED THAT TH E PRE-AMENDED PROVISIONS ARE APPLICABLE TO THE YEAR UNDER CONSIDE RATION AND THE RELEVANT PORTION READ AS UNDER :- A BANKING COMPANY TO WHICH BANKING REGULATION ACT, 1949 (10 OF 1949), APPLIES (INCLUDING ANY BANK OR BANKING INSTI TUTION REFERRED TO IN SECTION 51 OF THE ACT.) HE SUBMITTED THAT THE ABOVE SAID PORTION WAS AMENDE D BY IT (TWENTY- SECOND AMENDMENT) RULES 2015 W.E.F. 01-04-2016 AS U NDER:- A BANKING COMPANY OR A CO-OPERATIVE BANK TO WHICH THE BANKING REGULATION ACT, 1949 (10 OF 1949) APPLIES (INCLUDIN G ANY BANK OR BANKING INSTITUTION REFERRED TO IN SECTION 51 OF TH E ACT.) HE SUBMITTED THAT THE CO-OPERATIVE BANKS WERE SPE CIFICALLY INCLUDED WITH EFFECT FROM 01-04-2016 AND HENCE THERE WAS A V IEW THAT THE CO- OPERATIVE BANKS ARE NOT REQUIRED TO FURNISH AIR INF ORMATION. IN VIEW OF THE ABOVE SAID AMBIGUITY, THE ASSESSEE HAS NOT FILE D THE AIR INFORMATION. HE SUBMITTED THAT THE ASSESSEE HAS FU RNISHED THE ABOVE SAID EXPLANATION BEFORE LD CIT(A). HOWEVER, THE LD CIT(A) HAS TAKEN THE VIEW THAT THE AMENDMENT MADE WITH EFFECT FROM 1 .4.2016 IS CLARIFICATORY IN NATURE AND HENCE THE SAME WOULD AP PLY TO THE YEAR UNDER CONSIDERATION ALSO. THE LD A.R SUBMITTED THA T THE AMBIGUITY DEMONSTRATED BY THE ASSESSEE CONSTITUTES A REASONAB LE CAUSE WITHIN THE MEANING OF PROVISIONS OF SEC.273B OF THE ACT. ACCO RDINGLY HE PRAYED THAT THE IMPUGNED PENALTY BE DELETED. 7. THE LD D.R, HOWEVER, SUBMITTED THAT THE ASSE SSEE SHALL FALL UNDER THE CATEGORY OF BANKING COMPANY AND HENCE THE ASS ESSEE HAS COMPLIED WITH THE NOTICE ISSUED U/S 285BA(5) OF THE ACT. HE SUBMITTED THAT THE AMENDMENT MADE IN RULE 114E BY INSERTING CO-OPERATIVE BANK IS ONLY CLARIFICATORY IN NATURE. HE SUBMITTE D THAT ALL THE ASSESSEES ARE COVERED BY SEC.285BA(1) OF THE ACT AN D HENCE THERE EXISTS NO AMBIGUITY AS CONTENDED BY LD A.R. 8. IN THE REJOINDER, THE LD A.R SUBMITTED THAT T HE EXPRESSIONS BANKING COMPANY AND CO-OPERATIVE BANKS HAVE SPECIFIC MEANIN G UNDER THE BANKING REGULATIONS ACT. 9. WE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD. WE NOTICE THAT THE ORIGINAL PROVISIONS OF RULE 114E OF INCOME TAX RULES DID NOT INCLUDE CO-OPERATIVE BANK AND IT WAS INSERTED ONL Y IN THE AMENDED PROVISIONS OF RULE 114E, WHICH CAME INTO EFFECT FRO M 1.4.2016. ACCORDINGLY, IN OUR VIEW, THERE IS MERIT IN THE SUB MISSION OF THE LD A.R THAT THERE EXISTED AN AMBIGUITY AS TO WHETHER THE C O-OPERATIVE BANKS ARE REQUIRED TO COMPLY WITH THE PROVISIONS OF RULE 114E OF THE ACT, ITA NO.174 TO 177 & 381 TO 384/BANG/2021 THE SOUTH CANARA DISTRICT CENTRAL CO-OP. BANK LTD., MANGALORE PAGE 4 OF 4 MEANING THEREBY, THE BONAFIDE BELIEF OF THE ASSESSE E SHALL CONSTITUTE REASONABLE CAUSE IN TERMS OF SEC.273B OF THE ACT FO R THE FAILURE IN FURNISHING THE AIR FOR THE YEAR UNDER CONSIDERATION . IN THIS VIEW OF THE MATTER, THE IMPUGNED PENALTY IS LIABLE TO BE DELETE D. ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY LD CIT(A) AND DIRECT THE AO TO DELETE THE IMPUGNED PENALTY LEVIED U/S 271FA OF THE ACT FOR TH E YEAR UNDER CONSIDERATION. 5. WE NOTICE THAT THE FACTS PREVAILING IN THE ABOVE SAID CASE ARE IDENTICAL WITH THE FACTS OF THE PRESENT CASES. THE LD A.R ALSO POINTED OUT THAT AN IDENTICAL VIEW HAS BEEN TAKEN B Y ANOTHER CO- ORDINATE BENCH IN THE CASE OF SHRI CHATRAPATI SHIVA JI MAHARAJ SAHAKARI BANK NIYAMITHA VS. DIT (ITA NO.1332 TO 134 1/BANG/2019 DATED 11.3.2020). ACCORDINGLY, FOLLOWING THE ABOVE SAID ORDERS OF THE TRIBUNAL, WE SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) AND DIRECT THE DIT TO DELETE THE PENALTY LEVIED U/S 271 FA OF THE ACT IN ALL THE THREE YEARS UNDER CONSIDERATION. 6. IN THE RESULT, ALL THE EIGHT APPEALS OF THE ASSE SSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH OCT, 2021. SD/- (N.V. VASUDEVAN) VICE PRESIDENT SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED 5 TH OCT, 2021. VG/SPS COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.