Bahraich District Cooperative Bank Ltd, Bahraich V. ADDL/JDIT(I&C), Lucknow

ITA 81/LKW/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 6165 (ITAT-LUCKNOW)
• Duration Of Justice: 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 26-06-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 13-02-2024
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: PREMJIT SINGH KASHYAP
• Keywords: Reasonable cause
• Section: 274

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “A”, LUCKNOW BEFORE SHRI G. D. PADAMAHSHALI, ACCOUNTANT MEMBER AND SHRI SUBHASH MALGURIA, JUDICIAL MEMBER ITA No.81/LKW/2024 Assessment Year: 2017-18 Bahraich District Cooperative Bank Ltd. C/o Kashyap & Co. 114, Citi Centre, B.B. road Meerut v. Addl./JDIT(I&C) Lucknow PAN:AAAAB7053M (Appellant) (Respondent) Appellant by: Shri Premjit Singh Kashyap, C.A. Respondent by: Shri Sanjeev Krishna Sharma, D.R. Date of hearing: 27 06 2024 Date of pronouncement: 01 07 2024 O R D E R PER SUBHASH MALGURIA, J.M.: This appeal has been filed by the assessee against the order of the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi dated 08.12.2023 for the assessment year 2017-18, raising the following grounds:- 1. That Ld. ADIT (1 & C) erred on facts and in law in imposing penalty of Rs.751,000/- u/s 271FA of I.T. Act for delay in filing SFT statement as per section 285BA read with rule 114E of I.T. Rules. 2. That Ld. ADIT (I & C) erred in not appreciating the fact that there was a reasonable cause for delay in filing of SFT return. ITA No.81/LKW/2024 Page 2 of 5 3. That Ld. CIT(A) erred in not accepting the fact that SFT return for FY 16-17 was filed delayed only due to reasonable cause. 4. That penalty u/s 271FA can't be imposed if assessee have reasonable cause. In this regard assessee has relied upon the judgement of Hon'ble ITAT Nagpur in case of Dr. Babasaheb Ambedkar Urban Co-operative Bank Ltd vs DIT (1 & C). 2. There is a delay of 6 days in filing of this appeal. As per the application for condonation of delay, supported by the affidavit of Shri Shobit Vashisth, Secretary of the assessee-Bank, we find that there was sufficient cause for delay in filing of the appeal. Accordingly, we condone the delay and admit this appeal for hearing. 3. The brief facts of the case are that the assessee is a Co- operative Bank and as per the provisions of section 285BA of the Income Tax Act, 1961, the assessee was required to file Annual Information Return (AIR)/Specified Financial Transactions (SFT) latest by 31.1.2017 but the same was not filed within the due date. The Addl. CIT (I&C), Lucknow issued notice dated 11.5.2017 under section 285BA(5) of the Act requiring the assessee to file SFT return for the financial year 2016-17 within 15 days of receipt of notice. Since there was no compliance on the part of the assessee, on 20.5.2019 he issued a show cause notice under section 271FA read with 274 of the Act requiring the assessee to make compliance by 10.6.2019, in response to which the assessee submitted reply on 10.6.2019 seeking extra time of 15 days for filing the SFT. However, since the assessee has not furnished the AIR/SFT till passing of the order under ITA No.81/LKW/2024 Page 3 of 5 section 271FA of the Act, i.e. 8.11.2019, the Addl. CIT (I & C) imposed a penalty of Rs.7,51,000/-. 4. In first appeal, CIT(A) observed that the assessee has not given any reasonable cause for non-filing of SFT return; that the assessee was asked multiple time by the Department to file SFT return, however, the assessee did not file the same; that the assessee has also not given any reasonable or justifiable cause for failure to file SFT return on time; and that merely stating that the Officer in charge was not aware of the provisions and kept the notice in file shows the careless attitude of assessee towards statutory notices issued by the department. He accordingly dismissed the appeal of the assessee. 5. Before us, the authorized representative of the assessee, Shri Premjit Singh Kashyap, C.A. submitted that the ADIT (I&C) has not appreciated the fact that there was reasonable cause for delay in filing of SFT and no penalty under section 271FA can be imposed if the assessee has reasonable cause in filing of the SFT. In support of his contention, the authorized representative of the assessee relied upon the order of the ITAT Nagpur Bench in the case of Dr Babasaheb Ambedkar Urban Co-operative Bank Ltd. Vs. DIT (I&C). 6. The ld. D.R., on the other hand, relying on the orders of the authorities below, submitted that the Department had afforded the assessee requisite time and various opportunities to file the SFT for the financial year under consideration, but the assessee neither filed the SFT within the stipulated time nor responded to the notices issued by the Addl. CIT(I&C). Moreover, the assessee has also not given any reasonable explanation for failure on its part to file the SFT within the stipulated time. ITA No.81/LKW/2024 Page 4 of 5 Therefore, penalty under section 271FA imposed by the Addl. CIT(I&C) and confirmed by the ld. CIT(A) need no interference. 7. We have heard both the parties and perused the material placed on record. The assessee Co-operative Bank, as per the provisions of section 285BA of the Income Tax Act, 1961, was required to file Specified Financial Transactions (SFT) latest by 31.1.2017, but the same was not filed. The Addl. CIT (I&C), Lucknow issued notices under section 285BA(5) and under section 271FA read with 274 of the Act, but the assessee failed to file the SFT. Hence he imposed penalty under section 271FA of the Act. The submission on behalf of the assessee was that there was reasonable cause for delay in filing of SFT and no penalty under section 271FA can be imposed if the assessee has reasonable cause in filing of the SFT, in support of which reliance was placed on the order of the ITAT Nagpur Bench in the case of Dr Babasaheb Ambedkar Urban Co-operative Bank Ltd. Vs. DIT (I&C). 8. In the case of Dr Babasaheb Ambedkar Urban Co- operative Bank Ltd. Vs. DIT (I&C) in ITA Nos. 36 to 43/NAG/2019 for assessment year 2008-09 to 2015-16, the Nagpur Bench of Tribunal deleted the penalty imposed under section 271FA of the Act owing to the fact that there was reasonable cause for the assessee in not filing the AIRs in terms of section 285BA of the Act, whereas in the present case, the assessee has not adduced any reasonable cause for not filing the SFT. Therefore, the case law relied upon by the assessee is of no help to the assessee. 9. The submission of the Annual Information Return (AIR) is a crucial component of compliance for the companies obligated ITA No.81/LKW/2024 Page 5 of 5 to do so. It is an essential requirement, as it enables the Income Tax Department to track high-value financial transactions carried out by individuals, businesses, and other entities. This collected information is used to verify if the reported income of taxpayers is consistent with their spending patterns, and to detect any potential tax evasion. The assessee suo moto ought to have filed the AIR/SFT as per the provisions of section 285BA within the specified deadline. But in the present case, despite issuance of notices under section 285BA(5) and under section 271FA read with 274 of the Act, the assessee failed to file the AIR/SFT. 10. In view of the above facts and circumstances of the case, we do not find any error in the orders of the authorities below. We accordingly confirm the order of the ld. CIT(A), NFAC in confirming the penalty levied under section 271FA of the Act. 11. In the result, the appeal of the assessee stands dismissed. Order pronounced in the open Court on 01/07/2024. Sd/- Sd/- [G. D. PADAMAHSHALI] [SUBHASH MALGURIA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:01/07/2024 JJ: Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DR By order