Bona fide explanation and surrounding facts supported condonation of delay and deletion of penalty for alleged cash consideration.

A bona fide and plausible explanation, supported by affidavits and surrounding circumstances, warrants liberal acceptance both for condonation of delay and for resisting penal consequences under section 271D. Here, the explanation for a 366-day delay was accepted because there was no deliberate inaction, so the appeal was admitted on merits. On the penalty issue, the recital of cash consideration in the sale deed was treated as inadvertent, as the parties showed that no cash was actually exchanged and the transfer was within the family; the penalty under section 271D was therefore deleted.

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Issues: (i) Whether the delay of 366 days in filing the appeal should be condoned. (ii) Whether penalty under section 271D of the Income-tax Act, 1961 was leviable on the alleged cash consideration recorded in the sale deed.

Issue (i): Condonation of delay was considered on the settled principle that expressions such as "sufficient cause" deserve a liberal construction where the explanation is bona fide and no deliberate inaction is shown.

Conclusion: The delay was condoned and the appeal was admitted for adjudication on merits.

Issue (ii): The explanation that no cash was actually exchanged, that the property transfer was within the family, and that the recital of cash payment in the sale deed was inadvertent was supported by affidavits and surrounding facts. On that basis, the explanation was found plausible and the penalty proceedings under section 271D were held unsustainable.

Conclusion: The penalty was deleted.

Final Conclusion: The assessee succeeded in obtaining condonation of delay and in securing deletion of the penalty, resulting in complete relief in the appeal.

Ratio Decidendi: A bona fide and plausible explanation for delay or for the absence of actual cash consideration, when supported by surrounding circumstances and affidavits, warrants liberal acceptance and can defeat penal consequences under section 271D.

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