SHREE KADI NAGARIK SAHAKARI BANK LTD,KADI vs. ADDL/JDIT(I&CI), AHMEDABAD, AHMEDABAD

ITA 1257/AHD/2026Status: DisposedITAT Ahmedabad06 October 2026AY 2019-205 pages
AI SummaryRemanded

What were the facts?

The assessee, Shree Kadi Nagarik Sahakari Bank Ltd, filed two appeals before the ITAT against orders of the NFAC (CIT(A)) for AY 2019-20. The appeals challenged penalties imposed under Section 271FA of the Income Tax Act. The assessee was required to file a Statement of Financial Transactions (SFT) under Section 285BA for FY 2018-19 by May 31, 2019, but filed it on October 7, 2019, with a delay of 129 days. The Addl. CIT initiated penalty proceedings and imposed a penalty of Rs. 64,500 at Rs. 500 per day of delay. The assessee did not comply during penalty proceedings. The CIT(A) dismissed the assessee's appeal due to a delay of 221 days in filing the appeal before him, without adjudicating on merits. The assessee sought condonation of delay and adjudication on merits.

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred by dismissing the assessee's appeal solely on the ground of delay without adjudicating the grounds on merits. The Tribunal noted that the assessee's request for condonation of delay before the CIT(A) was not granted, leading to the dismissal of the appeal without considering the merits of the penalty levied under Section 271FA. The Tribunal acknowledged the assessee's submission that the delay in filing the SFT was technical and that no opportunity was provided to explain the reasons for the delay. Citing the Gujarat High Court's decision in Vareli Textile Industries v. CIT, the Tribunal emphasized that meritorious cases should not be dismissed on limitation grounds. The levy of penalty under Section 271FA is subject to the reasonable cause defense under Section 273B. Since the circumstances leading to the 129-day delay in filing the SFT were not examined, and the assessee was not afforded an opportunity to present its explanation and supporting evidence for reasonable cause, the matter was set aside to the CIT(A) for fresh adjudication. The CIT(A) was directed to condone the delay, afford the assessee a reasonable opportunity to explain the delay in furnishing the SFT and produce evidence, and then decide the penalty issue under Section 271FA afresh in accordance with law, considering Section 273B. The CIT(A) was also directed to pass a single order for the set-aside proceedings, as the appeals were duplicate.

What were the issues?

1. Whether the CIT(A) erred in law and facts by dismissing the assessee's appeal on the ground of a 221-day delay in filing the appeal, without considering reasonable cause, thereby not admitting the appeal for adjudication on merits? 2. Whether the CIT(A) erred in law and facts by not considering the assessee's grounds of appeal for dropping the penalty of Rs. 64,500 levied under Section 271FA by the Additional CIT? Assessee's Contentions: The assessee argued that the delay in filing the SFT was a technical and venial breach, and no opportunity was given to explain the delay. They relied on the Gujarat High Court's decision in Vareli Textile Industries v. CIT, stating that a meritorious case should not be thrown out on limitation. The assessee requested the matter be set aside to the CIT(A) for condonation of delay and adjudication on merits. Revenue's Contentions: The Revenue, through the SR-DR, had no objection if the matter was set aside to the CIT(A).

Which sections of the Income-tax Act were involved?

Section 271FA,Section 285BA,Section 273B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: SHRI NARENDRA PRASAD SINHA & SHRI SANJAY KUMAR

For Respondent: Shri Sachin Kumar, SR-DR
Hearing: 01.09.2026Pronounced: 06.10.2026

PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:

These two appeals are filed by the assessee against the separate orders of National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] both dated 09.01.2026 for the Assessment Year (A.Y.) 2019-20 in the proceeding u/s. 271FA of the Income Tax Act [hereinafter referred as “the Act”]. In fact, both the appellate orders are against the same order u/s. 271FA of the Act but passed under different DIN. Since, the issue involved in the two orders is the same, both the appeals are being disposed of vide this common order.

ITA No.1257 & 1258/Ahd/2026 Shree Kadi Nagarik Sahakari Bank Ltd Vs Add/JCIT, AY- 2

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 271FA

All 190 judgments and leading authorities on Section 271FA →

Recent GST High Court judgments

Search GST case law →