Satbir Kumar Sarlia Vs ITO (ITAT Mumbai)
VSV Settlement for Quantum Does Not Wipe Out Independent 271D Penalty-960-Day Delay Condoned; Penalty u/s 271D Remanded—
Assessee filed appeal against penalty u/s 271D of ₹1,38,00,000 for alleged acceptance of cash loans above ₹20,000 in violation of s.269SS. Appeal was delayed by 960 days. Assessee submitted affidavit explaining that he had opted for Vivad Se Vishwas (VSV) only for quantum proceedings & believed rectification u/s 154 (pending before CIT(A)) would resolve the issue; hence appeal before Tribunal was filed belatedly as a protective measure.
Tribunal examined condonation request & noted:
- Delay was due to bona fide belief;
- No mala fide intention; Section
- Revenue filed no counter-affidavit to oppose condonation;
- Large judicial support exists for liberal condonation—SC in Collector v. Katiji (167 ITR 471), Sandhya Rani Sarkar, Madras HC in K.S.P. Shanmugavel Nadai, ITAT TM in PEEDS (100 ITD 87), etc.
Applying principle that substantial justice prevails over technicalities, Tribunal condoned the delay.
On merits, Tribunal held that penalty u/s 271D is independent of quantum proceedings & cannot be treated as infructuous merely because quantum was settled under VSV. CIT(A)’s dismissal of penalty appeal as “infructuous” was therefore erroneous. Matter remanded to CIT(A) to adjudicate penalty afresh after granting proper opportunity.
