ITAT Deletes Penalty for Non-Filing of Form 15CA as Rules Were Notified Late for Non-Taxable Remittances

The Surat Bench of the Income Tax Appellate Tribunal (ITAT) has deleted a penalty that was imposed on a taxpayer for the non-filing of Form 15CA. This form is required for making remittances to non-residents. The tribunal's decision was based on the fact that the specific rules clarifying the requirement to file this form for non-taxable remittances were notified at a later date. The ITAT observed that at the time of the transaction, there was ambiguity in the law, and the taxpayer had a reasonable cause for not filing the form, as the remittance itself was not chargeable to tax in India. The tribunal held that a penalty cannot be levied for a procedural lapse when the rules themselves were not clear. This ruling provides relief to taxpayers who may have committed bona fide procedural errors due to a lack of clarity in the law at the time.