Where was this scene filmed?

IIRC it's somewhere on the Great St Bernard pass between Switzerland and Italy. Follow it on Google street view and you might come across it. Chances are it's changed a bit over time.

"if it was any good they'd have made an American version by now." Hank Hill

This was filmed in the Val Di Cogne on the SR47 road south of Aymavilles on the way to the village of Cogne. This road was also used for the overhead shot of the three fast cars when the gang splits up after they arrived in Italy. The road has since been widened at the actual spot where the Mafia confront Charlie.

My film location pictures are at: www.flickr.com/photos/mrlocation/sets/
and I have now put up all my Italian Job photos.

There's a fantastic website called "Mitteleuropa" which has a feature on The Italian Job complete with tonnes of pictures and detailed research.

The author describes the location as the road "from Aosta to Cogne SR47, at Pont D'Ael, after Pondel and before Chevril", and he even pinpoints it on the map.

It looks as if the location is 45.6709837N, 7.228363E, at a kink in the road. If you pop that into Google Earth it takes you to the right place. Google Street View reveals that the bank has been held up with sandbags since then:
http://tinyurl.com/pwdqzrf