Senior Sub-Registrar Vs Joint /Additional Director of Income Tax (ITAT Bangalore)
Penalty u/s 271FAA Deleted – Delay in Filing SFT Correction Due to Technical & Administrative Difficulties Held Reasonable – ITAT Bangalore Grants Relief to Govt. Authority
In ITA No.2312/Bang/2025, AY 2021-22, the Senior Sub-Registrar, a State Government reporting entity u/s 285BA, challenged penalty of ₹50,000 levied u/s 271FAA for failure to submit corrected Statement of Financial Transactions (Form 61A). CIT(A) had dismissed the appeal in limine by refusing to condone a delay of 102 days.
The Tribunal observed that the appellant had demonstrated genuine technical and administrative difficulties in generating DQR reports, PAN validation, ITDREIN activation, staff transfers, DSC issues and data conversion problems . Considering that the authority is a Government organisation with procedural constraints and that the correction statement was ultimately filed with nil defects, ITAT held that the failure was not willful.
ITAT also noted that penalty u/s 271FAA is discretionary (“may”) and quasi-criminal in nature; therefore reasonable cause and absence of malafide intention warranted leniency. The Tribunal set aside the CIT(A)’s order as well as the penalty order, holding that denial of delay condonation and levy of penalty violated principles of natural justice. Accordingly, the appeal was allowed and penalty deleted.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
