INCOME TAX OFFICER Vs. ADINATH COOPERATIVE BANK LIMITED

JUDGEMENT

(1.) Brief outline of the factual details at the outset is necessary for determination of this Tax Appeal. Respondent-assesses is Co-operative Bank engagedin the business of Banking. Survey was carried out on27.12.2005 for verifying the regularity in openingbank account. On having found alleged breaches in complying with the various provisions of law whileopening the bank account, a show cause notice wasissued on 6.1.2006 calling upon the respondent tofurnish the requisite details as also for explanationin connection with 156 current accounts and 53 fixeddeposits outlining specific defects and infirmitieswith regard to each such case.

(2.) There were further submissions made by theassessee-respondent along with adducment of theevidence in this regard.

(3.) On having also found that in number of mattersopening of bank accounts without requisite proof ofPAN/proof of address was permitted, the same was heldin complete breach of the legal provision. Thus, onaccount of alleged violation of section139A(6)/139A(8) of the Income Tax Act, 1961 and Rule 114B (f) of Income Tax Rules, such transactions alsoprescribed by CBDT under Rule 114(B) of the IncomeTax Rules, where clause 'C' specific that deposit incash aggregating to Rs.50,000/-or more wouldnecessitate customer to furnish the PAN and theperson who does not have PAN according to Rule 114B could be required to make declaration under subSection 6 of Section 139A read with clause (c) of SubClause (2) of Rule 114C. It is the duty of eitherBank Manager or officer of the Bank-receiving such application to ensure that either PAN is quoted ordeclaration is made in Form-60. Assessing Officerheld that the same had given rise to penalty u/s.272B of the Income Tax Act. Penalty for such failurein each case was levied at Rs.10,000/-by detailreasonings.