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This appeal filed by the assessee is directed against the order dated 17.10.2022 of the National Faceless Appeal Centre, Delhi, relating to Assessment Year 2018-19, dismissing the appeal of the assessee filed against the levy of penalty u/s 271FA of the Act, amounting to Rs.81,500/- vide order dated 13.11.2019.

2. The assessee company is engaged in the business of sale and purchase of foreign currency duly authorized by Reserve Bank of India since 2004 having license No.FE.DEL.FFMC./355/2004

4. Aggrieved with the said order, the assessee appealed before the ld. CIT(A). The ld. CIT(A) noted that there was a delay of 255 days in complying to the provisions of section 285BA for which penalty @Rs.100 per day of Rs.25,000/- was levied and a delay of 112 days default for not complying to the notice issued u/s 285BA(5) for which penalty @Rs.500 per day amounting to Rs.56,000/- was levied. The Ld. CIT(A) also took note of the fact that the assessee not only failed to furnish the statement mandated u/s 285BA in time, but even after the notice was issued, it failed to comply for another 112 days. In view of these facts and also considering the fact that the assessee company was incorporated in 2002 and had substantial paid up capital and also employs auditors and consultant to advice from time to time regarding compliance obligation, he held that the assessee was not able to show that there was reasonable cause within the meaning of section 273B of the I.T. Act for the delay in filing the SFT and thereby confirmed the penalty u/s 271FA of the Act.

5. Against the order of the Ld. CIT(A), the assessee is in appeal before us.

5.1. The assessee filed a written submission as appearing on page no.1 to 11 of the Paper Book and made the following submissions:-

"8. Brief contention
9. The primary contention of the assessee is that the penalty u/s 271FA shall not be imposed on the assessee as-
a. The assessee was unaware of the requirement of filing of form SFT b. The portal of the assessee was not working properly due to which there was delay in filing the same and also it could only be filled manually.

imposition of penalty u/s 271FA of Income Tax Act due to aforesaid reason. The relevant para of finding of hon. ITAT is reproduced as under:-

"8. the assessee got the accounts of all branches consolidated and audited, and also filed Income Tax/TDS returns. The order of the Director of Income Tax (Intelligence and Criminal investigation) does not speak as to how the assessee stood to gain by contravening with the provisions of Section 285BA of the Act or the act of assessee resulted in any loss to the Revenue. Further, it is an acknowledged and judicially recognized fact that the tax laws of this country are complex and complicated and often require for compliance, there with the assistance of tax practitioners specialising in this field, is a well known fact, and it is equally well known fact that the legislation in this field undergoes so frequent changes and amendments that it is not possible for even a person specialising in this field, including the tax administrator, to claim that he knows what exactly the law is on a particular given day or period without making references to the history of the enactments. In these circumstances, no mala fides can be attributed to the assessee so as to invoke the penalty proceedings under section 271FA of the Act and the learned Director of Income Tax (Intelligence and Criminal investigation) should have taken note that the breach is only technical or venial breach of the provisions of the Act and such a breach could have flown from a bonafide ignorance of the assessee that he is liable to act in the manner prescribed by the statute, and should not have invoked the penalty proceedings. We find every force in the argument of the learned AR and hold that the Penalty proceedings are liable to be set aside."