Visuvasam Amal Manickkaraj,Sub-Registrar,Office Sub-Registrar,Postal Colony,Thottipalayam,Tirupur v. The Director Of Income-Tax, (Cib), (I/C), Nungambakkam High Road, Chennai – 600 034

IN THE HIGH COURT OF JUDICATURE AT MADRAS THE HONOURABLE MR.JUSTICE C.SARAVANAN W.P. Nos. 5264 of 2011 & 3011 of 2012and M.P. Nos.2 of 2011 & 2 of 2012 (Through Video Conferencing) A.Vadivelu,Sub-Registrar,Office Bhavani,No.353, Taluk Office Compound,Mettur Main Road,Bhavani – 638 301. ...Petitioner in W.P.No.5264 of 2011 Visuvasam Amal Manickkaraj,Sub-Registrar,Office Sub-Registrar,Postal Colony,Thottipalayam,Tirupur. ...Petitioner inW.P.No.3011 of 2012 Vs 1.The Director of Income-Tax, (CIB), (I/C), Nungambakkam High Road, Chennai – 600 034. 2.The Income Tax Appellate Tribunal, Chennai Bench 'D', Rajaji Bhavan, Besant Nagar, Chennai – 600 090. ...Respondent in both W.Ps Prayer in W.P.No.5264 of 2011: Petition filed under Article 226of the Constitution of India to issue a Writ of Certiorari,calling for the records on the files of the 1[st] respondent inC.No.DIT(CIB)/CHE/2010-11 dated 23.09.2010 and quash the same asbeing without jurisdiction and authority of law. Prayer in W.P.No.3011 of 2012: Petition filed under Article 226of the Constitution of India to issue a Writ of Certiorari,calling for the records on the files of the 1[st] respondent inC.No.DIT(CIB)/CHE/2010-11 dated 23.09.2010 and quash the same asbeing without jurisdiction and authority of law. For Petitioner : Mr.Niranjan Rajagopal(in both W.Ps) For Respondents: Mr.A.P.Srinivas(in both W.Ps) Senior Standing Counsel COMMON ORDER By this common order both the writ petitions are beingdisposed of. 2. The Petitioners, sub registrars of Tamil Nadu StateRegistration Department have challenged the impugned ordersseeking to impose penalty on them under section 271 FA of theIncome Tax Act, 1961 on account of their failure to file annualinformation report under subsection 285 BA of the Income TaxAct, 1961. 3. The petitioners have challenged the impugned order passedby the 1[st] respondent seeking to impose penalty under section 271FA of the Income Tax Act, 1961 on the ground that before passingthe impugned order, mandatory notice contemplated under section285 BA (5) was not issued to them and that the penalty wasimposed by the respondents directly by passing the mandatoryrequirement of the aforesaid provision.4. The operative portion of the impugned order reads asunder:- “It was pointed out during the course ofhearing that the submission of CD to ITO was inresponse to his requisition under Section 133(6) andthe same is not a compliance in accordance withSection 285 BA. For filing the Annual Informationunder Section 285 BA for the Financial Year 2008-09the return should hve been filed in accordance withmanner laid down under the said Section read withRule 114E. To be precise the said Annual Return isto be filed before the NSDL through TIN FacilitationCentre. Therefore, the said Organization has notcomplied with the provisions of section 285 BA byfiling the Annual Return for the Financial Year2007-8 also. The case was again posted for hearing on22.09.2010 at 11.00 am. There was no response evento this letter also either in person or through anyletter seeking adjournment. It seems the saidorganization has no valuable reason to offer in itssupport. On 23.09.2010 one acknowledgment was received byfax showing filing of return on 23.09.2010. Thereason for delay in submitting the return was notexplained at all. Therefore the delay is upto23/09/2010 and no reason whatsoever could be adducedfor the same. It is seen from the records of this office, thesaid organization has not filed the return asrequired under Sub-Section (1) of Section 285 BA ofthe Income-Tax Act, 1961 for the Financial Year2007-2008. Therefore it appears that the saidorganization is a habitual defaulter by not filingthe return as required under Sub-Section (1) ofSection 285 BA of the Income-Tax Act. On 23.09.2010 one acknowledgment was received byfax showing filing of return on 23.09.2010. Thereason for delay in submitting the return was notexplained at all. Therefore the delay is upto23/09/2010 and no reason whatsoever could be adducedfor the same. It is seen from the records of this office, thesaid organization has not filed the return asrequired under Sub-Section (1) of Section 285 BA ofthe Income-Tax Act, 1961 for the Financial Year2007-2008. Therefore it appears that the saidorganization is a habitual defaulter by not filingthe return as required under Sub-Section (1) ofSection 285 BA of the Income-Tax Act. It appears that the period of delay is for 12months and 22 days and the assessee is a defaulteras it has filed the Annual Information Return thefinancial year 2008-09 on 23/09/10 which is not intime as required under sub-section (1) of Section285 BA of the Income-Tax Act. From the above it can be readily seen that theassessee has failed to adduce any reasonable causefor not filing the Annual Information Return in timefor the financial year 2008-09 for which penaltyunder Section 271 FA is leviable. The onus of proofis on the part of defaulter to establish that therewas a reasonable cause for the failure in view ofthe provisions of Section 273B of the I.T. Act. Theabove defaulter has failed to discharge the onus ofproof and no explanation, whatsoever could besubmitted clarifying the reasons for the delay insubmitting the return, in spite of the twoopportunities given. With the insertion of Section 273B the onus ofestablishing the reasonability or otherwise of thecause of the default has been shifted from therevenue to the tax payer. After insertion of thisSection it is for the defaulter to prove that “therewas a reasonable cause for the failure” in order toavoid the imposition of penalty. The defaultershall have to lead evidence of providing that therewas a reasonable cause for the failure. In thiscase, the defaulter has been given two opportunitiesof being heard and the notices have been sent byspeed post vide No.003109894 dated 09.09.2010. The law squarely casts the duty on the defaulterof providing that he was prevented by reasonablecause from complying with requirements of the law. Looking to the facts and circumstances of thecase, I consider this to be a fit case for levy ofpenalty under Section 271FA of the IT Act. As perprovisions of section under Section 271FA, penaltyleviable is Rs.100 per day of default. The numberof days of delay in filing the Annual InformationReturn for the financial year 2008-09 in this caseworks out to 387 days till 22.09.2010 and thepenalty leviable is Rs.38700/- (Rs.387x100) upto22.09.2010. Therefore I levy penalty under Section271FA of Rs.38,700/- (Rupees thirty eight thousandseven hundred only). This should be paid as perdemand notice enclosed.” 5. Defending the impugned order, the learned counsel for theIncome Tax Department submits that under section 285 BA of theIncome Tax Act, 1961, the petitioners were required to fileannual information return in respect of specified financialtransactions which are registered or recorded by them during anyfinancial year and information relating to such transaction wereto be filed before the prescribed income tax authorities or suchother authority or agency as may be prescribed. He furthersubmits that returns were to be filed within the prescribed timeafter the end of such financial year, in such form and manner(including on a floppy, diskette, magnetic cartridge tape, CD-ROM or any computer readable media) as may be prescribed. 6. It is further submitted that a show cause notice dated8.9.2010 was issued to show cause why an order penalty shouldnot be imposed on the petitioners under section 271 FA of theIncome Tax Act, 1961 and that the petitioners had not filed theannual information return on the date of the said notice. 6. It is further submitted that a show cause notice dated8.9.2010 was issued to show cause why an order penalty shouldnot be imposed on the petitioners under section 271 FA of theIncome Tax Act, 1961 and that the petitioners had not filed theannual information return on the date of the said notice. 7. I have considered the arguments advanced by the learnedcounsel for the petitioner and respondents. 8. The impugned order precedes a show cause notice dated8.9.2010 which in turn states that earlier another notice dated30.3.2010 was issued to the petitioners and since thepetitioners failed to furnish annual information report in time,the show cause notice was being issued to the petitioners toshow cause as to why penalty under section 271 FA of the IncomeTax Act, 1961 should not be imposed on the petitioners. 9. Copy of notices dated 30.3.2010 have not been filedeither by the petitioners or by the respondents. The counterfiled by the respondents is also silent on this aspect. Itappears that mandatory requirements of Section 285 BA calling https://hcservices.ecourts.gov.in/hcservices/ upon the petitioners to file the returns within a period of 60days from the date of notice has not been complied with.Instead, the petitioners have been directly asked to show causeonly why penalty should not be imposed. In this case thepetitioner has in any event filed the returns on 20.10.2011though belatedly. The purpose of the requirements of section285 BA of the Income Tax Act, 1961 stands satisfied. Under thecircumstances, I do not find any merits of the impugned order.These orders are there for liable to be quashed and areaccordingly quashed. 10. These writ petitions thus stand allowed. No cost.Consequently, connected miscellaneous petitions are closed. s/d- Assistant Registrar True Copy Sub-Assistant RegistrararbTo 1.The Director of Income-Tax, (CIB), (I/C), Nungambakkam High Road, Chennai – 600 034. 2.The Income Tax Appellate Tribunal, Chennai Bench 'D', Rajaji Bhavan, Besant Nagar, Chennai – 600 090.+2 Ccs to M/s.G.R. Associates sr 6064, 6065.+2 Ccs to Mr.A.P.Srinivas, Advocate sr 6425, 6424. VSNII(CO)SP(15/03/2021) https://hcservices.ecourts.gov.in/hcservices/