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This appeal is filed at the instance of the assessee pertaining to Assessment Year 2016-17 and is directed against the order of Ld. Director of Income Tax(I&CI) (in short 'DIT(I&CI), Bhopal dated 19.02.2018 framed u/s 271FA r.w.s. 274 of the Income Tax Act 1961(In short the 'Act').

2. The assessee has raised following grounds of appeal;

That on the facts and in the circumstances of the case and in law, the learned DIT(I&CI) has erred in imposing penalty of Rs.33,000/- u/s 271FA of the Act for non filing of AIR return without considering Sub Registrar Sarangpur reasonable cause.

The appellant craves, leave to add, alter or amend any of the foregoing grounds of appeal if and when necessary.

3. The assessee has solely challenged the levy of penalty of Rs.33,000/- u/s 271FA of the Act.

4. Brief facts as culled out from the records are that the assessee is a State Government authority i.e. Officer of Sub-Registrar of Sarangpur, A.B. Road, Sarangpur, Rajgarh which was under a legal obligation to file Annual Information Report but did not file the report. Ld. Director of Income Tax (I & CI) primarily issued notice u/s 285BA(1) of the Act which remained unattended. Thereafter notice u/s 285BA(5) of the Act was issued for non-compliance of the provisions of section 271FA and finally penalty @ 500 per day was imposed for delay of 66 days running from 29.11.2017 to 02.02.2018, totalling to Rs.33,000/-.

Sub Registrar Sarangpur

7. Per contra Ld. Departmental Representative vehemently argued and supporting the order of Ld. Director of Income Tax (I&CI).

8. We have heard rival contentions and perused the records placed before us. The assessee has challenged the levy of penalty u/s 271FA of the Act at Rs.33,000/- computed for delay of 66 days @ 500 per day.

9. We observe that the assessee is required to file Annual Information Report (in short AIR) to the Income Tax Department. For F.Y. 2014-15, the report has been duly filed on 27.08.2015 but for financial year 2015-16 the assessee could not file. From perusal of the paper book we observe that on 08.08.2016 there was a communication from Chief Registering Authority to all the sub- registrar informing that e-registration facility will be commenced from 01.07.2015 and for the period 01.04.2015 to 31.07.2015 and information is to be provided to the Income Tax Department through AIR. Again there was a communication in July 2018 by Chief Registering Authority to the Income Tax Department relating to information in respect of properties registered and also discussing about the problem faced in integration of the Income Tax Department with e-registering portal. Again on 22.11.2017 was a letter issued by Pr. Secretary Department of Commercial Tax to the Chief commissioner of Income Tax about the problem faced in the integration of income Tax Department E-portal and department of Registration for a web enabled portal for e-registration of the document pertaining to immovable properties since July 2015.

10. In our considered view the case of the assessee clearly u/s 273B of the Act as the assessee had a reasonable cause for the said failure to file Annual Information Report on time which was finally submitted on 29.08.2018. Therefore, in these circumstances no penalty should have been imposed on the assessee u/s 271FA of the Act. We, accordingly delete the penalty levied u/s 271FA of the Act of Rs.33,000/- and allow the sole ground raised by the assessee.

11. In the result the appeal of the assessee is allowed.