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Judgment
PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
In this case, there is a delay of 191 days which has been requested to be condoned through a detailed affidavit. The relevant portions from the said affidavit are extracted as under: -
1.“That the Appellant has preferred an appeal in Form No.36 against the order dated 26.09.2025 passed by the Ld. CIT(Appeals) under Section 271FA of the Income Tax Act, 1961.
2.That the impugned order of the CIT(A) was dated 26.09.2025, and accordingly, the prescribed period of two months in terms of Section 253(3) of the Income Tax Act, 1961 (from the end of the month in which the order was communicated) for filing the appeal before this Hon’ble Tribunal expired on 30.11.2025. There is a delay of approximately 190 days beyond the limitation period.
3.That the delay in preferring the present appeal was purely unintentional, inadvertent, and due to factors beyond the control of the Appellant.
4.That the Ld.CIT(A) dismissed the first appeal inlimine on procedural/maintainability grounds rather than looking into the merits. Following this unexpected dismissal, the Appellant – operating with less computer-savvy staff and a lack of in-house legal expertise on the Provisions of Income Tax Act – was severely misdirected regarding further legal remedies.
5.That the Appellant’s administrative office was completely under the impression that since the CIT(A) declared the matter “non-maintainable” under the Income Tax Act’s appeal provisions, no further statutory appellate remedy existed under the Act.
6.That the Appellant only recently obtained competent legal counsel and specialized advice, through which they were made aware of the judicial error committed by the CIT(A) and the availability of a remedy before this Hon’ble Tribunal. Immediately upon receiving proper guidance, the Appellate took steps to compile the records, arrange the Tribunal fee, and draft this affidavit cum application.
7.That it is a settled position of law, as laid down by the Hon’ble Supreme Court in the landmark judgment in the case of Collector, Land Acquisition Anantnag and Another vs. Mst. Katiji and Others [1987] A.I.R (SC) 1353, that a hyper-technical approach should not be adopted in matters of delay, and substantial justice must prefer over technical flaws.
8.That no prejudice or loss will be caused to the Revenue if the delay is condoned, whereas the Appellant will suffer irreparable financial hardship by way of an unjust penalty of Rs.85,700/- is the matter is not heard on its legal merits.”
Considering the reasons given in the affidavit, the delay is hereby condoned and the appeal is admitted for adjudication.
This appeal arises from order dated 26.02.2025, passed u/s 250 of the Income Tax Act, 1961 (hereafter as “the Act”), by NFAC, Delhi.
In this case, a penalty u/s 271FA has been imposed at Rs.85,700/-. This penalty has been imposed for not filing the Statement of Financial Transaction within the prescribed time.
The assessee approached the Ld. CIT(A) where also he could not succeed on the basis of finding on page 8 that a penalty u/s 271FA of the Act is not an appealable order before the CIT(Appeals).
The aggrieved assessee has now approached the ITAT with grounds challenging this action of Ld. CIT(A).
On the last date of hearing, none appeared on behalf of the assessee, but it was decided to proceed ahead with the adjudication with the help of Ld. DR.
Before us the Ld. DR took us through the penalty order and also the statement of facts, extracted in the impugned order at pages 2 to 3. On being prompted by the Bench, the Ld. DR read the prayer contained in the averments before the CIT(A) in the shape of “statement of facts”. Briefly, the reasons for non-compliance was stated to be limited infrastructure at Sub-Registrar Office and also due to lack of knowledge about the responsibilities of the Sub-Registrars as per the Act.
We have considered the submissions of Ld. DR and have gone through the records before us. While the Ld. DR has vehemently supported the orders of authorities below, we are inclined to take a liberal view in the matter considering the provisions of Section 273B of the Act, whereby certain penalties, including the present one, are not to be levied in case “reasonable cause” has been demonstrated. In this case, it is felt that the detailed reason given by the assessee, as extracted on pages 2 & 3 of the impugned order, constitute “reasonable cause” and therefore we direct that the penalty imposed be deleted.
In the result, the appeal is allowed.