ITAT Removes Penalty on Late STF Filing Due to Late Received of Notice

The Income Tax Appellate Tribunal (ITAT), New Delhi kept aside, the penalty levied, a delay of 210 days during furnishing the Statement of Financial Transaction (STF) Return due to late receipt of advisory notice and show cause notice.

The taxpayer, The Rewari Central Cooperative Bank Ltd is a District Cooperative Bank that is registered beneath the Cooperative Societies Act and controlled by the state of Haryana.

The taxpayer would be engaged in the banking activities such as borrowing, raising or taking up money, and lending or advancing money to its members. A show cause notice would be furnished dated 08/09/2017 through the Director of Income Tax asking for the taxpayer to elaborate the cause for not furnishing the statement of the financial transaction return (SFT return).

On show cause notice receipt, the taxpayer furnished an SFT return dated 14/09/2017 for the period from 08/11/2016 to 30/12/2016. The director of the income tax aggrieved with the cause for the late 210 days in furnishing the STF return, hence levying the penalty of Rs 1,05,000 (Rs 500 per day for 210 days) and issued an order dated 19/09/2017 u/s 271 FA of the Income Tax Act.

The taxpayer has chosen an Appeal to CIT(A) as he was not satisfied with the assessment order dated 19/09/2017. The CIT (A) has ignored the petition furnished through the taxpayer dated 18/03/2019 by ensuring the penalty imposed by the u/s 271FA of the Act. opposing the order on 18/03/2019, the taxpayer has preferred the Appeal to the Tribunal.

The Bench comprises Shamim Yahya, Accountant Member, and Yogesh Kumar the US, Judicial Member sees that “The taxpayer being a District Cooperative Bank has filed a statement of financial transaction with a delay of 210 days i.e. after receipt of the show cause notice issued by the Director of Income Tax”.

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An explanation would provide through the taxpayer that he does not obtain any advisory notice issued u/s 285 BA (5) and the show cause notice of penalty u/s 271FA because of the change of mail id and further stated, that the late return filing was not intended.

Considering the above facts and situation and the actuality, a taxpayer has furnished an SFT return from our view the Ld. AO must choose a lenient view via adopting a fair intent of the penalty proceedings.