Defects In Statement Of Reportable Account Rectified Within The Time Limit: ITAT Deletes Penalty

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the penalty as the defects in the statement of the reportable account were rectified within the time limit.The Bench of V. Durga Rao (Judicial Member) and Manjunatha, G. (Accountant Member) has observed that the provisions of sub-section (4) of Section 285BA of the Income Tax Act mandate that the defect be rectified within a period of one month from the date of intimation. The Reporting Entity has rectified the defects within the time limit as provided under Section 285BA(4).The appellant/assessee bank filed the original Statement of Reportable Account in Form 61-B. From the information available, the Prescribed Authority has noticed that the Reporting Entity did not report 16 accounts in the statements.The discrepancy was brought to the attention of the Reporting entity, which requested that it rectify it and furnish the details for it. After considering the replies of the Reporting Entity, the Prescribed Authority has observed that the Statement of Reportable Account furnished under Section 285BA(1) was inaccurate on account of the omission of one saving account and 15 Term Deposit accounts. A notice under Section 274 r.w.s. 271FAA was issued to the Reporting entity, requiring it to show cause as to why the penalty under Section 271FAA should not be levied against the Reporting Entity for furnishing inaccurate statements of reportable accounts.After considering the submissions of the Reporting Entity, the Prescribed Authority has completed the penalty order by levying a penalty of Rs. 50,000 each under Section 271FAA for filing an inaccurate Statement of Reportable Account.The Reporting Entity carried the matter in appeal before the CIT (A). After considering the submissions of the Reporting Entity, the CIT (A) confirmed the penalty levied under Section 271FAA.The Reporting Entity submitted that the defects pointed out by the Prescribed Authority were duly rectified, and a revised or corrected Form 61-B was filed well within the time allowed under Section 285BA(4).The ITAT held that CIT (A) was not correct in confirming the order of the Prescribed Authority that the assessee has not rectified the defects within time.The tribunal set aside the order passed by the CIT (A) and deleted the penalty levied under Section 271FAA.Case Title: KEB Hana Bank Versus Joint Director of Income TaxCase No.: I.T.A. Nos.440, 441 & 442/Chny/2023Date: 10/08/2023Counsel For Appellant: VA MehtaCounsel For Respondent: P. Sajit KumarClick Here To Read The Order

Defects In Statement Of Reportable Account Rectified Within The Time Limit: ITAT Deletes Penalty

Mariya Paliwala

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