Penalty appeal dismissed for delay in filing Form SFT under section 271FA. Upheld penalty due to lack of reasonable cause.

The appeal challenging the penalty under section 271FA for delay in filing Form SFT was dismissed. The Bench upheld the penalty imposed by the AO, finding no reasonable cause for the delay. The assessee's arguments of miscommunication, change in management, and lack of qualified staff were deemed insufficient justification. The order of the ld. CIT(A) was upheld, resulting in the dismissal of the appeal.

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Issues:
1. Imposition of penalty u/s 271FA for delay in filing Form SFT.
2. Reasonable cause for the delay in filing Form SFT.

Analysis:
1. The appeal was against the order confirming the penalty under section 271FA for a delay in filing Form SFT. The assessee argued that the penalty was unjustified as they had a reasonable cause for the delay. The Bench noted the failure of compliance by the assessee falling under Section 285BA for the A.Y. 2018-19. Despite the delay of 264 days in furnishing the Statement of Financial Transaction (SFT), the assessee claimed miscommunication with their consultant and a change in management as reasons for the delay. The assessee, a small urban bank, lacked qualified staff for compliance. The Bench found that under Section 271FA, failure to furnish a statement of financial transaction attracts penalties. The assessee's arguments of ignorance of the law or casual attitude were deemed insufficient. The order of the ld. CIT(A) was upheld, dismissing the appeal.

2. The assessee contended that they had a reasonable cause for the delay in filing Form SFT, citing miscommunication with their consultant and a change in management affecting awareness of compliance requirements. They argued that upon becoming aware, immediate action was taken to file the necessary reports. The assessee emphasized their lack of mala fide intent and the subsequent compliance with the income tax notice. However, the Bench found that as per Section 285BA, it was a statutory obligation for the assessee to furnish the Annual Information Return (AIR). The delay in compliance was not considered justified, and the ld. CIT(A)'s decision to uphold the penalty was supported. The appeal was ultimately dismissed with no costs awarded.

3. In conclusion, the appeal filed by the assessee challenging the penalty under section 271FA for the delay in filing Form SFT was dismissed. The Bench found no reasonable cause for the delay and upheld the penalty imposed by the AO. The assessee's arguments regarding miscommunication, change in management, and lack of qualified staff were not considered sufficient justification for the delay. The order of the ld. CIT(A) was deemed well-reasoned, leading to the dismissal of the appeal.

Order pronounced in the open court on 01/09/2022.

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