State Bank Of India, Hyderabad vs Assessee
- CitationITA.No.1465/Hyd/2014
Ratio decidendi
The rule this decision rests on
The penalty under section 272A(2)(c) for non-compliance with a notice under section 133(6) is not attracted merely by the fact of delay in furnishing the information; the relevant inquiry is whether the non-compliance was wilful, whether it was a deliberate ploy to avoid furnishing the information, and whether it resulted from circumstances beyond the control of the person to whom the notice was issued, so that the assessee's explanation of reasonable cause must be examined against these considerations. Where an assessee pleads sufficient cause for delayed compliance with a section 133(6) notice, supported by correspondence and e-mails with its head or regional office, and the assessee has not been given a proper opportunity to produce that documentary evidence, the matter is to be restored to the Assessing Officer for the limited purpose of affording a further opportunity to substantiate the plea of sufficient cause before the penalty is finally determined.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
These two appeals filed by the two assessees are directed against the two separate orders passed by the Ld. CIT(A)-VII, Hyderabad dated 26.06.2014 and 25.07.2014 whereby he sustained the penalty confirmed of Rs.1,05,300 imposed by the A.O. under section 272A(2)(c) of the Act in the case of SBI, Metpalle Branch while restricting the similar penalty of Rs.1,05,300 imposed in the case of NTPC Branch to the extent of Rs.35,100.
2 ITA.Nos.1465 & 1468/Hyd/2014 SBI, Ramagundam & Metpalle, Karimnagar Dist.,
2. The assessees in the present case are the Branches of State Bank of India. Notices under section 133(6) of the Act were issued by the A.O. to both the assessees calling for information in respect of specific areas as under :
Date of Code No. Code under which information Notice was called for 27.09.2010 Code No.003 Time deposits exceeding Rs. 2 lakhs with banking company 27.09.2010 Code No.006 Payment in cash for purchase of bank drafts or pay orders or bankers' cheque from a banking company of an amount aggregating to Rs.1,00,000 or more during any one day.
27.09.2010 Code No.007 Deposit in cash aggregating Rs.2,00,000/- or more, with banking company during any one day.
2.1. As per the above notices, the information called for was to be furnished by the assessees by 01.11.2010. They however, failed to furnish the required information in spite of two more reminders given by the A.O. The A.O. therefore, issued notices on 23.09.2011 requiring both the assesees to show cause as to why penalty under section 272A(2)(c) should not be imposed for their non-compliance to the notices issued under section 133(6) of the Act. There was however, no response on the part of the assessees to the said notices and the A.O. therefore, proceeded to impose penalty under section 272A(2)(c) amounting to Rs.1,05,300 on each assessee calculated @ Rs.100 per day for the default period of 351 days in respect of each of the three notices.
3. The penalties of Rs.1,05,300 each imposed by the A.O. under section 272A(2)(c) were challenged by the assessees 3 ITA.Nos.1465 & 1468/Hyd/2014 SBI, Ramagundam & Metpalle, Karimnagar Dist.,
in the appeals filed before the Ld. CIT(A). During the course of appellate proceedings before the Ld. CIT(A), it was submitted by the assessees that the required information could not be extracted/generated at the branch level as they needed software support and permission of Head Office/Regional Office for preparation and extraction of data from the software.
It was submitted that the said information, after getting the support and permission of the Head Office/Regional Office, was finally extracted/generated in October, 2011 and the same was immediately submitted to the A.O. on 15.10.2011. It was contended on behalf of the assessee before the Ld. CIT(A) that there was thus a reasonable cause for the delay on the part of the assessee to furnish the required information in response to the notices issued under section 133(6) the said delay not being intentional or willful, penalties imposed by the A.O. under section 272A(2)(c) were not justified.
4. After taking into consideration the submissions of the assessees as well as the material available on record before him, the Ld. CIT(A) restricted penalty of Rs.1,05,300 to Rs.35,100 in the case of NTPC Branch vide paragraph No.5 of his impugned order as under :
"5. A penalty for non-compliance to notice should basically look into the following questions :
(a) Was non-compliance willful ?
(b) Was non-compliance a deliberate ploy to avoid/furnish the information.
(c) Was non-compliance due to the acts beyond control of the person to whom the notice was issued ?
As evident from the submissions made, the applicant's case does not fall under (a) or (b) circumstances mentioned supra. The appellant 4 ITA.Nos.1465 & 1468/Hyd/2014 SBI, Ramagundam & Metpalle, Karimnagar Dist.,
bank had furnished the information on 15.10.2011 and 3.2.2012. It is therefore seen that for the information which was called for in September 2010, the compliance came a year later. Secondly, in spite of the same difficulties in the same period, the other banks and even branches of the same bank have complied with and filed the information. However, keeping the facts and circumstances in view and the fact the technically only one notice was issued, levy of penalty of Rs.34,100/- is confirmed instead of Rs.1,05,300/-."
4.1. In case of Metpalle Branch, the Ld. CIT(A) however confirmed the entire penalty of Rs.1,05,300 imposed by the A.O. under section 272A(2)(c). Aggrieved by the order of the Ld. CIT(A), the assessees have preferred the present appeals before the Tribunal
5. We have heard the arguments of both the sides and also perused the relevant material on record. The Ld. Counsel for the assessee has submitted that the sufficient cause pleaded by the assessee before the Ld. CIT(A) for the delay resulted in furnishing the required information in response to the notice issued under section 133(6) is supported by the correspondence and e-mails exchanged between the two assessees which are the branches of the State Bank of India with their Head Office/Regional Office. He has contended that proper and sufficient opportunity however was not given to the assessees either by the A.O. or by the Ld. CIT(A) to produce the said evidence. He has urged that one more opportunity may therefore, be given to the assesees to support and substantiate its case of sufficient cause pleaded before the Ld. CIT(A) by producing the relevant evidence. Since the learned D.R. has also not raised any serious objection in this regard, we restore the matter to the file of the A.O. for the 5 ITA.Nos.1465 & 1468/Hyd/2014 SBI, Ramagundam & Metpalle, Karimnagar Dist.,
limited purpose of giving one more opportunity to the assessees to support and substantiate their case of sufficient case for the delay as pleaded before the Ld. CIT(A) by producing the relevant documentary evidence in the form of correspondence and e-mails exchanged with their Head Office/Regional Office.
6. In the result, appeals of the assessees are treated as allowed for statistical purposes.
Order pronounced in the open Court on 30.04.2015.
Sd/- Sd/- (SAKTIJIT DEY) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER
Hyderabad, Dated 30th April 2015
VBP/-
Copy to
1. State Bank of India, NTPC C/o. Mr. K. Vasantkumar Branch, Ramagundam, & A.V. Raghuram, Karimnagar Dist., Advocates, 610, Babukhan
2. State Bank of India, Metpally Estate, Basheerbagh, Branch, Karimnagar District. Hyderabad.
3. CIT(A)-VII, Hyderabad
4. CIT-(CIB), Hyderabad
5. D.R. ITAT "A" Bench, Hyderabad.
6. Guard File
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