IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH : BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE – PRESIDENT AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER Assessment Year : 2021-22 Senior Sub-Registrar, Malleshwaram, Office of the Sr.Sub Registrar, The Joint / Additional No. 11 & 12, 1^st and 2^nd Director of Income Tax Main Road (I & CI), Palace Guttahalli, Bangalore.

Malleshwaram, Vs.

Bangalore North, Bangalore – 560 003.

PAN: BLRS32826D APPELLANT RESPONDENT Assessee by : Shri Suresh Rao, CA Revenue by : Shri Subramanian .S, JCIT-DR Date of Hearing : 12-02-2026 Date of Pronouncement : 19-02-2026

ORDER

PER SOUNDARARAJAN K., JUDICIAL MEMBER This is an appeal filed by the Appellant challenging the order of the NFAC, Delhi dated 31/08/2025 in respect of the A.Y. 2021-22 and raised the following grounds:

“1) The order of the Ld CIT(A) NFAC Delhi is arbitrary, against the provisions of law, Principles of Natural Justice and contrary to the facts of the case and is therefore unsustainable.

2) The Ld CIT(A) erred in not condoning the delay in filing the appeal which was due to genuine and bona fide reasons against an arbitrary Penalty Order.

3) The Ld CIT(A) erred in dismissing the appeal in limine without adjudicating on the merits and without giving an opportunity to the Appellant to make submission on facts of the case.

4) The Ld CIT(A) erred in dismissing the appeal without considering that the Ld Jt./Addl.DIT(I&CI) Bangalore has erred in levying penalty u/s 271FAA of the I T Act, 1961 for the failure to furnish the correction Statement of Financial Transactions (SFT) without appreciating the facts and circumstances of the case.

5) The Ld CIT(A) erred in dismissing the appeal without considering that the Ld Jt/Addl DIT(I&CI) has erred in levying the penalty against the principle of Nature Justice and Equity without appreciating the various technical glitches/difficulties faced by the appellant in filing the said correction Statement of Financial Transaction and therefore the penalty order needs to be quashed.

6) The Ld CIT(A) erred in dismissing the appeal without considering that the Ld Jt/Addl.DIT(I&CI) Bangalore has erred in levying penalty u/s 271 FAA of the I T Act, 1961 without appreciating the fact that the appellant has got reasonable cause for the said failure of submitting the report within the specified date.

7) For these and such other grounds as may be advanced on or before the date of hearing. it is prayed that the order of CIT(A) confirming the penalty levied u/s 271FAA of the IT Act, 1961 be deleted and justice rendered.

8) The appellant craves leave to amend, alter or delete any of the grounds of appeal.”

2. The brief facts of the case are that the appellant is a State Government authority in the registration department. The IT Act mandates that the registering authorities should file the details of the registration of properties having a value of more than Rs. 30 Lakhs to the Income Tax department by filing a statement of financial transaction in form 61A. The appellant is a specified reporting entity u/s. 285BA and registered with the IT department for furnishing the statement of financial transaction. The appellant for the period 2020-21 (Assessment Year 2021-22), had to file the form 61A on or before 30/06/2021. The appellant filed the said form on 26/07/2021 and the said statement was treated as defective and the Joint / Additional Director of Income Tax issued a notice u/s. 285BA(4) of the Act on 09/03/2022. The appellant could not generate the DQR (Data Quality Report) due to some technical glitches in its system and therefore the corrected statement could not be filed within the time granted. Another notice dated 13/02/2024 was issued and one more notice was issued on 31/01/2025. Thereafter the appellant received a show cause notice dated 14/02/2025. The appellant could not get the required data within the above said date and therefore no reply has been filed to the show cause notice also. Therefore the appellant had sent