Bonafide Impression that Predecessor Already Submitted AIR Not A “Reasonable Cause” for Delay of 526 Days: Kerala HC Upholds Penalty u/s 271FA of IT Act [Read Order]

In a recent Judgement, the Kerala High Court upheld the penalty imposed under section 271A of the Income Tax Act,1961 for non-filing of an Annual Information Return (AIR) by the sub-registrar on the ground of absence of reasonable cause. 

Sub Registrar, the petitioner filed a writ petition to issue a writ of mandamus or such other appropriate Writ for quashing the order or direction passed by the Income Tax Appellate Tribunal. 

A.Kumar, the counsel for the petitioner contended that section 273B of the Income Tax Act provides that in a case where it can be shown that the delay in providing the details as required under section 285BA(1) of the Income Tax Act was on account of a reasonable cause, then the penalty was liable to be waived. 

Further submitted that the refusal on the part of the department to consider the reasonable cause shown by the petitioner and imposing penalty under Section 271FA of the Income Tax Act was illegal and untenable and liable to be deleted. 

Jose Joseph, the counsel for the department contended that the reason stated by the Sub Registrar cannot be treated as sufficient reason for the inordinate delay in filing the returns. 

It was further contended that no appeal lies to the Tribunal from an order under section 271FA of the Income Tax Act. 

The Court observed that the reasons stated by the petitioner do not constitute a reasonable cause to excuse their delay of 525 days in submitting the returns and dismissed the petition filed by the petitioner and upheld the penalty imposed under section 271FA of the Income Tax Act. 

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