DISTRICT COOPERATIVE BANK LIMITED, SHAHJAHANPUR,SHAHJAHANPUR vs. ADDL/JDIT (I & CI), LUCKNOW

ITA 79/LKW/2025Status: DisposedITAT Lucknow30 January 2026AY 2021-202210 pages
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What did the Tribunal hold?

The Tribunal held that no penalty is leviable under Section 271FA if there are no specified financial transactions to report. For Section 271FAA, the Tribunal found the failure to rectify defects within the stipulated time to be a technical breach, especially since the defects were rectified shortly thereafter and before the penalty was levied.

What were the facts?

The assessee failed to file statements of specified financial transactions (SFT) for AY 2019-20 and filed defective SFTs for AY 2021-22, leading to penalties under sections 271FA and 271FAA respectively. The assessee contended that there were no reportable transactions for AY 2019-20 and faced technical issues and delays in rectifying defects for AY 2021-22.

What were the issues?

Whether penalty under Section 271FA is leviable for non-filing of SFT when no reportable transactions exist, and whether penalty under Section 271FAA is justified for a technical breach in rectifying defective SFTs.

Which sections of the Income-tax Act were involved?

Section 271FA,Section 271FAA,Section 285BA

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Income Tax Appellate Tribunal, LUCKNOW ‘B’ BENCH, LUCKNOW

Before: SH. SUDHANSHU SRIVASTAVA & SH. NIKHIL CHOUDHARY

Hearing: 09.12.2025Pronounced: 30.01.2026

PER NIKHIL CHOUDHARY, A.M.: These two appeals have been filed by the assessee against the orders of the ld. CIT(A), NFAC for the Assessment Years 2019-20 and 2021-22 wherein the ld. CIT(A), NFAC has confirmed the penalty levied under section 271FA of the Income Tax Act, amounting to Rs. 9,73,000/- for the Assessment Year 2019-20 and under section 271FAA amounting to Rs. 50,000/- for the Assessment Year 2021-22 that was levied by the ld. AO for failure to file statement of financial transactions / furnishing of incorrect information in the statement of financial transactions. The grounds of appeal are as under:- A.Y. 2019-20 “1.1 The Learned Commissioner of Income Tax (Appeals), NFAC, Delhi (here

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