Income Tax Appellate Tribunal - LucknowRaibareilly District Co-Operative ... vs Assessee on 26 November, 2013IN THE INCOME TAX APPELLATE TRIBUNAL
                      LUCKN BENCH 'B' : LUCKNOW

         BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER
           AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER

                           I.T.A. No.699/Lkw/2013
                            Financial year:2011-12
                          Assessment Year:2012-13

Raibareilly District Co-operative         Vs.    Director of Income Tax (I&CI),
Bank Ltd.,                                       Lucknow.
Raebareilly.
(Appellant)                                      (Respondent)

      Appellant by                  : Shri Alok Mitra, D.R.
      Respondent by                 : Shri J. J. Mehrotra, C.A.

      Date of hearing       :26/11/2013
      Date of Pronouncement :07/01/2014

                                      ORDERPER SUNIL KUMAR YADAV:This appeal is preferred by the assessee against the order of
Director of Income-tax (I&CI) levying the penaltyu/s 271FAof the I.T.
Act, (hereinafter referred to as the "Act") at Rs.15,300/- for the delay in
furnishing the AIR to the Department.2.    On careful perusal of this order of Director of Income-tax, we find
that as per item No. 1 of the table in Rule 114E(2) of the I.T. Rules, 1962,
banking companies are required to file AIR (Annual Information Return) in
respect of transactions of cash deposit aggregating to Rs.10 lakhs or more
in a year in any savings account of a person maintained with that bank.2The due date of filing of AIR was 31st December immediately following the
financial year in which the transaction is registered or recorded. In the
event of failure to file the AIR, penalty is leviableu/s 271FAof the Act.
Undisputedly the AIR was not furnished by the assessee by the due date.
Thereafter, noticeu/s 285BA(5)dated 28/12/2012 was issued to file the
AIR for financial year 2001-12 by 18/01/2013.         Consequent thereto, a
letter dated 02/02/2013 was received in the office of Director of Income-
tax (I&CI) on 20th February, 2013 enclosing the receipt of AIR dated
01/02/2013 for financial year 2001-12. In response thereto, a show cause
notice was issued to the assessee but there was no response from the
assessee and the Director of Income-tax was constraint to compute the
penalty as persection 271FAof the Act.             Accordingly, penalty of
Rs.15,300/- was levied.3.    Now the assessee has preferred an appeal before the Tribunal with
the submission that delay for furnishing the AIR was not intentional but
due to the ignorance of legal provisions of the concerned person in the
assessee bank. The assessee is a District Co-operative Bank and is not
equipped with the latest legal positions of theIncome-tax Act. On account
of ignorance of the concerned officer with regard to the legal requirement
of filing AIR before the due date, the AIR was filed when it was pointed
out by the Department. Therefore, the delay in filing the AIR was not
intentional but due to the aforesaid circumstances. The learned counsel
for the assessee further made a reference to the provisions ofsection
273Bwith the submission that no penalty u/s 271BFA should be levied for
ignorance of legal complexities ofIncome-tax Act.34.    Learned D.R., on the other hand, has placed heavy reliance on the
order of Director of Income-tax.5.    Having given a thoughtful consideration to the rival submissions, we
find that the assessee is a district co-operative bank and in rural areas the
officers of the co-operative bank may not be aware of the legal
complexities of theI.T. Act, therefore, the contention of the assessee that
the delay was caused on account of ignorance of the concerned person
about the complexities of theI.T. Actcannot outrightly be disbelieved.
Since the explanation furnished by the assessee is plausible, the penalty
u/s 271BFA should not be levied. Accordingly, we are of the view that
under these facts, the penalty leviedu/s 271FAis not maintainable and we
delete the same.6.    In the result, the appeal of the assessee stands allowed.(Order pronounced in the open court on 07/01/2014)


        Sd/.                                                Sd/.(A. K. GARODIA)                                   (SUNIL KUMAR YADAV)
Accountant Member                                      Judicial Member

Dated:07/01/2014
*CL Singh

Copy forwarded to the:
1. Appellant.
2. Respondent.
3. CIT (A)
4. CIT
5. DR.

                                                  Assistant Registrar