Penalty u/s 272A(2)(c) for not furnishing information to notice u/s 133(6) deleted
In a recent judgment, ITAT Lucknow has deleted Penalty u/s 272A(2)(c) imposed on Sub-registrar for not furnishing information of properties registered in response to notice u/s 133(6) of the Income Tax Act, 1961.
ABCAUS Case Law Citation:
4186 (2024) (08) abcaus.in ITAT
In the instant case, the appellant Sub Registrar had challenged the order passed by the CIT(A) in sustaining the penalty order u/s 272A(2)(c) passed by the Income Tax Office (ITO) for not furnishing the information as per notice u/s 133(6) of the Income Tax Act, 1961 (the Act).
The appellant was Sub-Registrar of properties. The Income Tax Officer issued notice u/s 133(6) of the Act requiring the appellant to furnish information in respect of transactions relating to immovable property of a value between Rs. 5,00,000/- and Rs. 30,00,000/-.
Since no information was furnished even after issuance of reminders, a show cause notice was issued to the assessee for initiating proceedings under section 272A(2)(c) of the Act. Since the assessee failed to discharge the obligation prescribed under section 133(6) of the Act by furnishing the requisite information before the prescribed authority, the Income Tax Officer initiated penalty proceedings and imposed a penalty of Rs. 35,300/- under section 272(2)(c) of the Act.
Aggrieved, the assessee preferred appeal before the CIT(A). During the pendency of appeal before the CIT(A), the Sub-Registrar filed a Writ Petition, challenging the notices issued under section 133(6) of the Act before the Hon’ble Allahabad High Court. The Hon’ble High Court,
directed the Chief Commissioner of Income Tax, Lucknow and the Inspector General (Stamps and Registration) to hold a further meeting so that this Court could be apprised whether the dispute has been resolved.
Pursuance to the order of the Hon’ble High Court a meeting was held between the Chief Commissioner of Income Tax, Lucknow and the Inspector General (Stamps and Registration), Government of Uttar Pradesh. It was agreed that the Sub-Registrars shall provide the required information relating to immovable properties while the Income Tax Department shall endeavour that stay of demand petitions, if any, moved by the SROs against penalty imposed for non-compliance of notice u/s 133(6) of the Income Tax Act, 1961, are expeditiously disposed off as per rules. However, this shall be without prejudice to the legality of applicability of penal provisions for non-furnishing of information u/s 133(6) in the case of SROs.
The CIT(A) finally dismissed the appeal of the assessee, upholding the penalty levied under section 272A(2)(c) of the Act, observing that the appellant had not submitted any valid reason/cause for failure to discharge the obligation under section 133(6) of the Act.
Before the Tribunal, the appellant produced a letter written to Assistant Inspector General (Registration) and submitted on oath that there was valid reason/cause for not submitting the same before the ITO, as the requisite information had wrongly been submitted before the Assistant Inspector General (Registration) instead of the ITO. Therefore, the act of the appellant in not furnishing the same before the ITO being purely unintentional and legitimate, the penalty should not have been levied.
The Tribunal observed that as per provisions of section 273B of the Act, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in section 272A of the Act and if he proves that there was reasonable cause for the said failure.
The Tribunal further observed that in the present case, the assessee had asserted that the requisite information could not be furnished before the ITO for the reason that the same had wrongly been furnished before the Assistant Inspector General (Registration). The explanation of the assessee is found to be bona-fide. In this view of the matter, the penalty levied under section 272A(2)(c) of the Act was not justifiable in the eyes of law.
Accordingly, the Tribunal directed deletion of penalty levied under section 272A(2)(c) of the Act.
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