Patan Krushi Utpanna Bazar Samittee, Patan V. ITO, Ward 1, Satara, Satara

ITA 1343/PUN/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49980 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 30-11-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K AMBASTHA
• Keywords: Charitable institution; Reasonable cause; Ignorance of law
• Section: 273B; 142(1); 148; 144; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI I C SUDHIR, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER S. NO. ITA NO A. Y APPELLANT RESPONDENT 1 1343/PN/09 2003-04 PATAN KRUSI UTPANNA BAZAR SAMITEE, PATAN, DIST. SATARA INCOME-TAX OFFICER, WD. 1 SATARA 2 1344/PN/09 2003-04 -DO- -DO- 3 1345/PN/09 2003-04 -DO- -DO- 4 1346/PN/09 2003-04 -DO- -DO- 5 1347/PN/09 2003-04 -DO- -DO- 6 1348/PN/09 2004-05 -DO- -DO- 7 1349/PN/09 2004-05 -DO- -DO- 8 1350/PN/09 2004-05 -DO- -DO- APPELLANT BY : SHRI M K KULKARNI RESPONDENT BY : SHRI S.K. AMBASTHA ORDER PER BENCH: THESE ARE GROUP OF EIGHT APPEALS, ALL PREFERRED BY T HE SAME ASSESSEE. SINCE THE APPEALS RELATE TO SAME ASSESSEE AND INVOLVE CERT AIN COMMON FACTORS, THE SAME WERE HEARD TOGETHER AND A CONSOLIDATED ORDE R IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. ITA NO 1343/PN/09 IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) DATED 17.9.200 9,WHICH IN TURN, HAS ARISEN FROM THE ORDER DATED 17.12.2007 PASSED BY THE ASSESSING OFFICER UNDER SECTION 144 READ WITH SECTION 167B OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) FOR THE ASSESSMENT YEAR 2003-04. 3. IN THIS APPEAL, THE ASSESSEE HAS RAISED FOLLOWING TWO GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, LD. CIT(A) WAS NOT JUSTIFIED IN DISMISSING THE APPEAL AS BARRED BY LIM ITATION INVOLVING THE PROVISIONS OF S. 249(3) OF THE ACT. THE APPELLANT-SOCIETY HAVI NG EXPLAINED THE DELAY CONSIDERING THE HUMAN PROBABILITIES THE DELAY OUGHT TO HAVE BEEN CONDONED. IN VIEW OF THE GROUND NO. 2 OF THIS APPEAL, THE LD CIT (A) BE DIRECTED TO CONDONE THE DELAY OCCURRED IN FILING OF THE APPEAL BEFORE HIM A ND IN THE INTEREST OF JUSTICE DECIDE THE ISSUES ON MERITS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ASSESSEE-THE KRUSHI UTPANNA BAZAR SAMITTEE DULY ESTABLISHED UNDE R THE STATUTORY PROVISIONS OF APMC ACT, 1963 AND WORKING IN REMOTE RURAL AREA HAD ALL THE WHILE NURSED A BONA FIDE IMPRESSION THAT ITS INCOME WAS NOT LIABLE TO ANY TAXATION. THE SAME 2 ALSO COULD NOT HAVE BEEN TAXED BUT FOR REGISTRATION U/S 12AA(1) OF THE ACT WHICH COULD NOT BE OBTAINED DUE TO IGNORANCE OF LAW ONLY. THE INCOME BEING EXEMPT THE ASSESSEE-SOCIETY REMAINED UNDER BONA FIDE IMPRE SSION THAT NO RETURN WAS REQUIRED TO BE FILED. 3. AS IS EVIDENT FROM THE AFORESAID, THE SUM AND SUBSTA NCE OF THE GRIEVANCE OF THE ASSESSEE IS THAT THE COMMISSIONER OF INCOME-TAX (AP PEALS) WAS NOT JUSTIFIED IN TREATING THE APPEAL FILED BY THE ASSESSEE A S BARRED BY LIMITATION IN TERMS OF SECTION 249(3) OF THE ACT. 4. THE COMMISSIONER OF INCOME-TAX (APPEALS) NOTED THAT THE IMPUGNED ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 144 READ WITH SECTION 167B WAS PASSED ON 17.12.2007 AND DULY SERVED ON THE ASSESSEE ON 31.12.2007. THE ASSESSEE FILED AN APPEAL BEFORE THE COM MISSIONER OF INCOME- TAX (APPEALS) ON 1.8.2008, WHICH WAS BELATED BY APPROX IMATELY SIX MONTHS. THE COMMISSIONER OF INCOME-TAX (APPEALS) NOTICED THAT THE A SSESSEE DID NOT FILE ANY DELAY CONDONATION PETITION AND IT WAS ONLY THROUGH TH E GROUND OF APPEAL NO. 1 BEFORE HIM, WHICH IS AS UNDER, THAT THE DELAY WAS SOUGH T TO BE CONDONED: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW AND CONSIDERING THE STATUS OF THE SAMITTEE WORKING IN REMOTE AREA THE D ELAY OCCURRED IN FILING OF THE APPEAL BE CONDONED AND APPEAL BE ADMITTED FOR HEARI NG IN ACCORDANCE WITH THE PROVISIONS OF LAW. AS PER THE COMMISSIONER OF INCOME-TAX (APPEALS), THE ON LY REASON MENTIONED BY THE ASSESSEE FOR THE DELAY WAS THAT IT WAS WORKING IN A RE MOTE AREA. THE COMMISSIONER OF INCOME-TAX (APPEALS) DID NOT CONSTRUE THE SAME AS A SUFFICIENT CAUSE AS PROVIDED IN SECTION 249(2) OF THE ACT AND, THER EFORE, HELD THE APPEAL AS BELATED AND UNADMITTED. ACCORDINGLY, THE APPEAL HAS BE EN DISMISSED. 5. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE HAS M ERELY REITERATED THE POSITION SET OUT IN THE GROUNDS OF APPEAL, WHICH HAS BE EN EXTRACTED BY US IN EARLIER PART OF THIS ORDER IN SUPPORT OF THE PLEA THA T THE COMMISSIONER OF INCOME- TAX (APPEALS) ERRED IN NOT CONDONING THE DELAY OF APP EAL. IT IS CONTENDED BEFORE US THAT THE DELAY OCCURRED ON ACCOUNT OF THE HUMAN PROB ABILITIES AND ALSO THE FACT THAT THE ASSESSEE WAS WORKING IN A REMOTE RURAL AREA AND WAS NURSING A BONA FIDE IMPRESSION THAT ITS INCOME WAS NOT LIABLE TO A NY TAXATION. 3 6. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPR ESENTATIVE, APPEARING FOR THE REVENUE, HAS STRONGLY SUBMITTED THAT THE REASON ADVANCED FOR THE DELAY BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS) WAS VAG UE AND HAS BEEN RIGHTLY DISREGARDED BY THE COMMISSIONER OF INCOME-TAX ( APPEALS). 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. FRO M A PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW, IT IS QUITE EVIDENT THAT NO SPECIFIC REASON HAS BEEN ADVANCED BY THE ASSESSEE TO EXPLAIN THE DELAY IN FI LING OF THE APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS). THE CASUAL APP ROACH OF THE ASSESSEE IS ALSO EVIDENT FROM THE FACT THAT NO SPECIFIC CONDON ATION PETITION WAS SOUGHT TO BE MOVED BEFORE THE COMMISSIONER OF INCOME-TA X (APPEALS) AND REFERENCE WAS MADE ONLY TO THE GROUND OF APPEAL RAISE D BEFORE HIM. WE ALSO NOTICE THAT NONE OF THE REASONS SOUGHT TO BE ARTICULATE D BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS) OR EVEN BEFORE US ARE SUPPORTE D BY ANY AVERMENTS IN AN AFFIDAVIT ALSO. MOREOVER, WE FIND THAT THE REASONS AD VANCED ARE ALSO NOT GERMANE SO AS TO BE CONSTRUED AS A SUFFICIENT CAUSE FOR THE DELAY IN FILING OF THE APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS). CONSIDE RING THE TOTALITY OF CIRCUMSTANCES AND THE FAILURE ON THE PART OF THE ASSESSEE TO DEMONSTRATE BONA FIDES OF THE REASONS FOR DELAY, IN OUR VIEW, THE COMM ISSIONER OF INCOME-TAX (APPEALS) MADE NO MISTAKE IN REFUSING TO CONDONE THE DEL AY IN FILING OF THE APPEAL. AS A RESULT THEREOF, WE HEREBY AFFIRM THE ORD ER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AND THE APPEAL RAISED BY THE ASSESSE E IS DISMISSED. 8. IN THE RESULT, ITA NO 1343/PN/09 IS DISMISSED. 9. IN ITA NO 1350/PN/09 PERTAINING TO THE ASSESSMENT Y EAR 2004-05, THE ISSUE RAISED IS SIMILAR TO THAT CONSIDERED BY US IN ITA NO 1343/PN/09 FOR THE ASSESSMENT YEAR 2003-04. THEREFORE, ON SIMILAR PARITY OF REASONING, THIS APPEAL OF THE ASSESSEE IS DISMISSED. 10. IN THE RESULT, ITA NO. 1350/PN/09 IS DISMISSED. 11. ITA NO 1345/PN/09 IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) DATED 18.9.200 9,WHICH IN TURN, HAS 4 ARISEN FROM THE PENALTY ORDER DATED 7.05.2008 PASSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(B) OF THE ACT FOR THE ASSESSMENT YE AR 2003-04. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE READ AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, LD. CIT(A) WAS NOT JUSTIFIED IN DISMISSING THE APPEAL CONFIRMING THE P ENALTY LEVIED U/S 271(1)(B) OF THE ACT OF RS 10,000/-. THE PENALTY LEVIED BE DELET ED WHICH WAS SO LEVIED WITHOUT CONSIDERING THE REASONABLE CAUSE PLEADED WITHIN T HE MEANING OF S. 273B OF THE ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ASSESSEE-THE KRUSHI UTPANNA BAZAR SAMITTEE DULY ESTABLISHED UNDE R THE STATUTORY PROVISIONS OF APMC ACT, 1963 AND WORKING IN REMOTE RURAL AREA HAD ALL THE WHILE NURSED A BONA FIDE IMPRESSION THAT ITS INCOME WAS NOT LIABLE TO ANY TAXATION. THE SAME ALSO COULD NOT HAVE BEEN TAXED BUT FOR REGISTRATION U/S 12AA(1) OF THE ACT WHICH COULD NOT BE OBTAINED DUE TO IGNORANCE OF LAW ONLY. THE INCOME BEING EXEMPT THE ASSESSEE-SOCIETY REMAINED UNDER BONA FIDE IMPRE SSION THAT NO RETURN WAS REQUIRED TO BE FILED. IN VIEW OF THIS THE PENALTY L EVIED IS NOT JUSTIFIED AND IT BE DELETED. 12. THE ONLY GRIEVANCE OF THE ASSESSEE IS THAT THE COMMISSI ONER OF INCOME- TAX (APPEALS) ERRED IN CONFIRMING THE PENALTY LEVIED UNDER SECTION 271(1)(B) OF THE ACT AMOUNTING TO RS 10,000/-. IN THE PENALTY ORDER, I T IS NOTED BY THE ASSESSING OFFICER THAT A NOTICE UNDER SECTION 142(1) OF THE ACT D ATED 26.11.2007 WAS ISSUED AND SERVED ON THE ASSESSEE REQUIRING THE ASSESSEE TO APPEAR ON 4.12.2007 IN CONNECTION WITH ON-GOING ASSESSMENT PROCEEDINGS. HOWEVER, THE ASSESSEE FAILED TO APPEAR ON THE SAID DATE. ACCORDINGLY, A SHOW CA USE NOTICE UNDER SECTION 271(1)(B) OF THE ACT WAS ISSUED REQUIRING THE ASSESSEE TO SHOW AS TO WHY PENALTY SHOULD NOT BE LEVIED FOR NON-COMPLIANCE OF THE NOTICE ISSUED UNDER SECTION 142(1) OF THE ACT. THE ASSESSING OFFICER HAS RECORD ED THAT THE ASSESSEE HAS NOT RESPONDED TO THE SHOW CAUSE NOTICE AND, THEREFORE , HE PRESUMED THAT THE ASSESSEE HAD NO EXPLANATION FOR NON-COMPLIANCE OF TH E NOTICE ISSUED UNDER SECTION 142(1) OF THE ACT. HE ACCORDINGLY LEVIED A PENAL TY OF RS 10,000/-. 13. THE COMMISSIONER OF INCOME-TAX (APPEALS) ALSO NOTICED THAT BEFORE HIM NO SUBMISSION HAS BEEN MADE TO EXPLAIN AS TO WHY AND UND ER WHAT CIRCUMSTANCES THE ASSESSEE FAILED TO COMPLY WITH THE NOTICE I SSUED UNDER SECTION 142(1) OF THE ACT OR EVEN IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED UNDER SECTION 271(1)(B) OF THE ACT. THEREFORE, PENALTY LEVIE D BY THE ASSESSING OFFICER HAS BEEN SUSTAINED. 5 14. BEFORE US, THE LEARNED COUNSEL HAS RELIED ON THE GROUND OF APPEAL RAISED BY THE ASSESSEE, WHICH HAS BEEN EXTRACTED BY US IN THE EARL IER PART OF THIS ORDER IN SUPPORT OF THE CASE OF THE ASSESSEE. ACCORDING TO THE L EARNED COUNSEL, THE ASSESSEE WAS WORKING IN A REMOTE RURAL AREA AND IT WAS UN DER A BONA FIDE IMPRESSION THAT ITS INCOME WAS NOT LIABLE TO TAXATION A ND, THEREFORE, IT HAD REASONABLE CAUSE WITHIN THE MEANING OF SECTION 273B FO R NON-COMPLIANCE WITH THE NOTICE UNDER SECTION 271(1)(B) OF THE ACT. 15. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REP RESENTATIVE HAS DEFENDED THE IMPOSITION OF PENALTY UNDER SECTION 271( 1)(B) OF THE ACT BY PLACING RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. 16. HAVING CONSIDERED THE RIVAL SUBMISSIONS, WE FIND THAT NO COGENT REASON HAS BEEN ADVANCED BY THE ASSESSEE TO SHOW THAT THERE WAS REASONABLE CAUSE FOR NON-COMPLIANCE WITH THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 142(1) OF THE ACT DATED 26.11.2007.IN FACT BEFORE US T HE REASON ADVANCED IS NOT AT ALL GERMANE SO AS TO CONSTITUTE ANY CAUSE FOR NON-COMP LIANCE WITH THE NOTICE ISSUED UNDER SECTION 142(1) OF THE ACT. IN VIEW OF THE A BOVE, WE HEREBY AFFIRM THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) SUSTA INING THE PENALTY IMPOSED UNDER SECTION 271(1)(B) OF THE ACT AMOUNTING TO RS 10,000/-. 17. IN THE RESULT, ITA NO 1345/PN/09 IS DISMISSED. 18. IN ITA NO 1348/PN/09 PERTAINING TO THE ASSESSMENT YEAR 2004-05, THE ISSUE RAISED IS SIMILAR TO THAT CONSIDERED BY US IN ITA NO 1345/PN/09 FOR THE ASSESSMENT YEAR 2003-04. THEREFORE, ON SIMILAR PARITY OF REASONING, THIS APPEAL OF THE ASSESSEE IS ALSO DISMISSED. 19. IN THE RESULT, ITA NO. 1348/PN/09 IS DISMISSED. 20. ITA NO 1346/PN/09 IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) DATED 18.9.200 9,WHICH IN TURN, HAS ARISEN FROM THE PENALTY ORDER DATED 7.05.2008 PASSED BY THE ASSESSING OFFICER UNDER SECTION 271F OF THE ACT FOR THE ASSESSMENT YEAR 20 03-04. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE READ AS UNDER: 6 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, LD. CIT(A) WAS NOT JUSTIFIED IN DISMISSING THE APPEAL CONFIRMING THE P ENALTY LEVIED U/S 271F OF THE ACT OF RS 5,000/-. THE PENALTY LEVIED BE DELETED WHICH WAS SO LEVIED WITHOUT CONSIDERING THE REASONABLE CAUSE PLEADED WITHIN T HE MEANING OF S. 273B OF THE ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ASSESSEE-THE KRUSHI UTPANNA BAZAR SAMITTEE DULY ESTABLISHED UNDE R THE STATUTORY PROVISIONS OF APMC ACT, 1963 AND WORKING IN REMOTE RURAL AREA HAD ALL THE WHILE NURSED A BONA FIDE IMPRESSION THAT ITS INCOME WAS NOT LIABLE TO ANY TAXATION. THE SAME ALSO COULD NOT HAVE BEEN TAXED BUT FOR REGISTRATION U/S 12AA(1) OF THE ACT WHICH COULD NOT BE OBTAINED DUE TO IGNORANCE OF LAW ONLY. THE INCOME BEING EXEMPT THE ASSESSEE-SOCIETY REMAINED UNDER BONA FIDE IMPRE SSION THAT NO RETURN WAS REQUIRED TO BE FILED. IN VIEW OF THIS THE PENALTY L EVIED IS NOT JUSTIFIED AND IT BE DELETED. 21. SECTION 271F OF THE ACT PRESCRIBES FOR LEVY OF PENAL TY FOR THE FAILURE ON THE PART OF THE ASSESSEE TO FURNISH A RETURN OF INCOME AS REQ UIRED BY SECTION 139(1) OR THE PROVISOS THEREOF, BEFORE THE END OF THE RELEVA NT ASSESSMENT YEAR. IN THIS CASE, ASSESSEE WAS REQUIRED TO FURNISH A RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT ON OR BEFORE 31.10.2003, BUT NO SUCH RETUR N HAS BEEN FILED. THE ASSESSING OFFICER HAS NOTICED THAT THE ASSESSEE WAS ALSO ISSUED A NOTICE UNDER SECTION 142(1) OF THE ACT ON 4.3.2005 REQUIRING HIM TO FURNISH A RETURN OF INCOME FOR THE ASSESSMENT YEAR IN QUESTION. THE SAID NOTICE ALSO REMAINED UNCOMPLIED WITH. EVEN A NOTICE ISSUED UNDER SECTION 148 OF THE ACT D ATED 2.3.2006 ALSO REMAINED UNCOMPLIED WITH. FOR ALL THE ABOVE REASONS, T HE ASSESSING OFFICER LEVIED A PENALTY UNDER SECTION 271F OF THE ACT AMOUNTI NG TO RS 5,000/-. 22. THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS ALSO SUSTA INED THE SAME AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 23. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMIT TED THAT UPTO THE PRECEDING ASSESSMENT YEAR 2002-03, THE ASSESSEE WAS REGARDED STATUS OF A LOCAL AUTHORITY AND WAS ENJOYING EXEMPTION UNDER SECT ION 10(20) OF THE ACT. IN TERMS OF THE AMENDMENT MADE TO EXPLANATION BELOW SECTI ON 10(20) BY THE FINANCE ACT 2002 WITH EFFECT FROM 1.4.2003, THE DEFIN ITION OF LOCAL AUTHORITY WAS SO AMENDED WHICH EXCLUDED THE ASSESSEE FROM ITS PURVIEW. AS A RESULT THEREOF, FROM THE ASSESSMENT YEAR 2003-04 ONWARDS THE ASSESSEE WAS L IABLE FOR TAXATION AND WAS THEREFORE REQUIRED TO FILE A RETURN OF INCOME . THE ASSESSEE BEING UNAWARE OF SUCH PROVISION WAS UNDER A BONA FIDE IMPRESSI ON THAT ITS INCOME CONTINUED TO BE EXEMPT UNDER SECTION 10(20) OF THE ACT AND IN ANY CASE, IT WAS 7 SUBMITTED THAT THE ACTIVITIES OF AN AGRICULTURAL PRODUCE MARKETING COMMITTEE ARE TO BE LOOKED UPON AS ADVANCEMENT OF OBJECT OF GENERAL P UBLIC UTILITY AND, THEREFORE, THEY ARE COVERED WITHIN THE MEANING OF CHARITABLE PURPOSE UNDER SECTION 2(15) OF THE ACT. FOR ALL THE ABOVE REASONS, THE ASSESSEE WAS UNDER A BONA FIDE IMPRESSION THAT ITS INCOME WAS EXEMPT FROM TA XATION. THEREFORE, RETURN OF INCOME WAS NOT FILED. 24. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REP RESENTATIVE HAS DEFENDED THE ORDERS OF THE AUTHORITIES BELOW BY PLACIN G RELIANCE THEREOF AND POINTED OUT THAT THE REASONS ADVANCED ARE CONTRARY TO THE LEGAL POSITION AND ARE NOT BONA FIDE. 25. IN OUR CONSIDERED OPINION, THE ONLY DEFAULT TO BE RECKONED FOR THE PURPOSES OF SECTION 271F IS THE NON-FILING OF THE RETURN BEFORE THE END OF THE RELEVANT ASSESSMENT YEAR, I.E. BY 31.3.2004. IN FACT, IN THE PRESE NT CASE THE ASSESSEE HAS NOT FILED RETURN OF INCOME AT ALL AND THE ASSESSMENT T HEREOF HAS BEEN COMPLETED UNDER SECTION 144 OF THE ACT. THE AMENDMENT IN LAW EFF ECTED BY THE FINANCE ACT 2002 WITH EFFECT FROM 1.4.2003 EXCLUDED THE ASSESSEE FROM THE PURVIEW OF TAX EXEMPTION UNDER SECTION 10(20) OF THE ACT. QUITE CLEARL Y, IN SUCH A SITUATION AN ASSESSEE CAN BE EXPECTED TO BE UNDER A BONA FIDE IMPRESSION , THOUGH WRONG, THAT IT WAS NOT REQUIRED TO FILE RETURN OF INCOME AS I N THE PAST YEARS, SINCE ITS INCOME WAS CONSIDERED EXEMPT. THOUGH THERE IS NO REASON F OR THE ASSESSEE NOT TO FILE RETURN IN RESPONSE TO NOTICES ISSUED UNDER SECTIO N 142(1) OF THE ACT OR TO NOTICES ISSUED UNDER SECTION 148 OF THE ACT, SO HOWEVER, IN SO FAR AS THE PRESENT PROCEEDINGS ARE CONCERNED, WE ARE ONLY TO EXAMINE AS T O WHETHER THE ASSESSEE HAD A REASONABLE CAUSE FOR NOT FILING A RETURN AS REQU IRED UNDER SECTION 139(1) OF THE ACT BEFORE THE END OF THE RELEVANT ASSESSMENT YEAR. THE RELEVANT ASSESSMENT YEAR ENDED ON 31.3.2004 AND IN SO FAR AS NOTICE S UNDER SECTION 142(1) AND 148 ARE CONCERNED, THE SAME HAVE BEEN ISSUED SUBSEQUENT TO THE SUCH DATE AND ARE NOT RELEVANT TO DECIDE THE EXIGIBILI TY OF PENALTY UNDER SECTION 271F OF THE ACT. THEREFORE, UPTO 31.3.2004 IT CAN BE SAID THAT THE ASSESSEE WAS 8 UNDER A BONA FIDE IMPRESSION, THOUGH ERRONEOUS THAT IT WAS NOT REQUIRED TO FILE RETURN OF INCOME. CONSIDERING ALL THESE ASPECTS, WE FIND THAT THE LEVY OF THE IMPUGNED UNDER SECTION 271F IS QUITE UNJUSTIFIED IN T HIS CASE. AS A RESULT, WE SET ASIDE THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPE ALS) AND DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED PENALTY LEVIED UNDER SECTION 271F OF THE ACT AMOUNTING TO RS 5,000/-. 26. IN THE RESULT, ITA NO.1346/PN/09 IS ALLOWED. 27. IN ITA NO 1347/PN/09 PERTAINING TO THE ASSESSMENT YEAR 2004-05, THE ISSUE RAISED IS SIMILAR TO THAT CONSIDERED BY US IN ITA NO 1346/PN/09 FOR THE ASSESSMENT YEAR 2003-04. THEREFORE, ON SIMILAR PARITY OF REASONING, THIS APPEAL OF THE ASSESSEE IS ALLOWED. 28. IN THE RESULT, ITA NO. 1347/PN/09 IS ALLOWED. 29. ITA NO 1344/PN/09 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) DATED 18.9.2009 CONFIRMING THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT, AMOUNT ING TO RS 77,256/- FOR THE ASSESSMENT YEAR 2003-04. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS FOLLOWS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, LD. CIT(A) WAS NOT JUSTIFIED IN DISMISSING THE APPEAL CONFIRMING THE P ENALTY LEVIED U/S 271(1)(C) OF THE ACT OF RS 77,526/-. THE PENALTY LEVIED BE DELET ED WHICH WAS SO LEVIED WITHOUT CONSIDERING THE FACTUAL POSITION THAT THERE WAS NO CONCEALMENT NOR FURNISHING OF ANY INACCURATE PARTICULARS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ASSESSEE-THE KRUSHI UTPANNA BAZAR SAMITTEE DULY ESTABLISHED UNDE R THE STATUTORY PROVISIONS OF APMC ACT, 1963 AND WORKING IN REMOTE RURAL AREA HAD ALL THE WHILE NURSED A BONA FIDE IMPRESSION THAT ITS INCOME WAS NOT LIABLE TO ANY TAXATION. THE SAME ALSO COULD NOT HAVE BEEN TAXED BUT FOR REGISTRATION U/S 12AA(1) OF THE ACT WHICH COULD NOT BE OBTAINED DUE TO IGNORANCE OF LAW ONLY. THE INCOME BEING EXEMPT THE ASSESSEE-SOCIETY REMAINED UNDER BONA FIDE IMPRE SSION THAT NO RETURN WAS REQUIRED TO BE FILED. IN VIEW OF THIS THE PENALTY L EVIED IS NOT JUSTIFIED AND IT BE DELETED. 30. AS STATED IN EARLIER PART OF THIS ORDER, THE ASSESSMEN T IN THIS CASE WAS COMPLETED BY THE ASSESSING OFFICER UNDER SECTION 144 READ WITH SECTION 167B OF THE ACT FOR THE ASSESSMENT YEAR 2003-04. DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER INITIATED PENALTY PROCE EDINGS UNDER SECTION 271(1)(C) OF THE ACT. DURING THE COURSE OF PENALTY PROCE EDINGS, INSPITE OF THE ASSESSING OFFICER GIVING AN OPPORTUNITY OF HEARING TO THE ASSESSEE, THE ASSESSEE 9 DID NOT REMAIN PRESENT NOR WAS ANY EXPLANATION FURNISH ED. IN THESE CIRCUMSTANCES, THE ASSESSING OFFICER PRESUMED THAT THE ASSESSEE HAD NOTHING TO SAY IN THE MATTER AND CONSEQUENTLY LEVIED A PENALTY OF RS 77,526/- UNDER SECTION 271(1)(C) OF THE ACT. 31. IN APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX (A PPEALS), THE ASSESSEE SUBMITTED THAT UPTO THE PRECEDING ASSESSMENT YEAR 2002-0 3, THE ASSESSEE WAS ENJOYING STATUS OF A LOCAL AUTHORITY AND WAS ENJOYING EXEMPTION UNDER SECTION 10(20) OF THE ACT. IN TERMS OF THE AMENDMENT MADE TO EXPLANATION BELOW SECTION 10(20) BY THE FINANCE ACT 2002 WITH EFFECT FROM 1.4.20 03, THE DEFINITION OF LOCAL AUTHORITY WAS SO AMENDED WHICH EXCLUDED THE ASSESSEE FROM ITS PURVIEW. AS A RESULT THEREOF, FROM THE ASSESSMENT YEAR 2003-04 ONWARD S THE ASSESSEE WAS LIABLE FOR TAXATION AND WAS THEREFORE REQUIRED TO FI LE RETURN OF INCOME. THE ASSESSEE BEING UNAWARE OF SUCH PROVISION WAS UNDER A BONA F IDE IMPRESSION THAT ITS INCOME CONTINUED TO BE EXEMPT UNDER SECTION 10 (20) OF THE ACT AND IN ANY CASE, IT WAS SUBMITTED THAT THE ACTIVITIES OF AN AGRICULT URAL PRODUCE MARKETING COMMITTEE ARE TO BE LOOKED UPON AS ADVANCEMENT OF OBJE CT OF GENERAL PUBLIC UTILITY AND, THEREFORE, THEY ARE COVERED WITHIN THE MEANING OF CHARITABLE PURPOSE UNDER SECTION 2(15) OF THE ACT. FOR ALL THE ABOVE REASO NS, THE ASSESSEE WAS UNDER A BONA FIDE IMPRESSION THAT ITS INCOME WAS EXEMPT FROM TAXATION. THEREFORE, THE PENALTY LEVIED WAS NOT JUSTIFIED. 32. THE COMMISSIONER OF INCOME-TAX (APPEALS), HOWEVER, WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND HE AFFIRMED T HE ACTION OF THE ASSESSING OFFICER LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT BY HOLDING AS FOLLOWS: I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT AND FIND IT TO BE DEVOID OF ANY MERIT. ALTHOUGH THE APPELLANT HAS TAKEN THE PLE A THAT IT DID NOT FILE THE RETURN OF INCOME AND OFFER THE INCOME FOR TAXATION AS IT WAS IGNORANT ABOUT THE PROVISIONS OF LAW, THE FACT THAT THE APPELLANT DID NOT RESPOND TO THE VARIOUS NOTICES ISSUED BY THE AO REQUIRING THE ASSESSEE TO FILE THE RETURN OF INCOME , PRODUCE BOOKS OF ACCOUNT AND DOCUMENTS RELEVANT FOR ASSESSING THE INCOME OF THE APPELLANT, CLEARLY SHOWS THAT THE APPELLANT DELIBERATELY AND CONSCIOUSLY AVOIDED THE DISCLOSURE OF ITS INCOME. HAD THE APPELLANT BONA FIDES BE GENUINE, IT WOULD HAVE IMME DIATELY RESPONDED TO THE NOTICES ISSUED BY THE DEPARTMENT. THE FACTS OF THE CASE CLE ARLY ESTABLISH THATBY NOT FILING THE RETURN OF INCOME EVEN AFTER BEING SPECIFICALLY REQU IRED BY GTHE AO, THE APPELLANT CONCEALED ITS PARTICULAR OF INCOME AND THEREFORE, T HE AO IS HELD TO BE JUSTIFIED IN VISITING THE APPELLANT WITH THE PENAL PROVISIONS OF SECTION 271(1)(C) OF THE ACT. HIS ACTION IN DOING SO IS UPHELD AND ORDER U/S 271(1)(C) IS CONFIRMED. 10 33. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE REITE RATED THE SUBMISSIONS AS MADE BEFORE THE COMMISSIONER OF INCOME-TAX ( APPEALS) AND PRAYED THAT THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT BE DELETED. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HA ND, DEFENDED THE ORDERS OF THE AUTHORITIES BELOW. 34. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. IN OUR CONSIDERED OPINION, THE COMMISSIONER OF INCOME-TAX (APPEALS) WAS J USTIFIED IN UPHOLDING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT LEVIED BY T HE ASSESSING OFFICER. THE LEARNED COUNSEL FOR THE ASSESSEE HAS NOT BEEN ABLE TO P ERSUADE US TO TAKE A DIFFERENT VIEW FROM THAT OF THE COMMISSIONER OF INCO ME-TAX (APPEALS). ACCORDINGLY, WE CONFIRM THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AND THE ASSESSEE FAILS. 35. IN THE RESULT, ITA NO 1344/PN/09 IS DISMISSED. 36. IN ITA NO.1349/PN/09 FOR THE ASSESSMENT YEAR 2004- 05, SIMILAR ISSUE RELATING TO LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS INVOLVED. ON SIMILAR PARITY OF REASONING AS IN ITA NO 1344/PN/09, T HIS APPEAL IS ALSO DISMISSED. 37. IN THE RESULT, ITA NO 1349/PN/09 IS DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON THE 29 TH DAY OF JULY, 2011. SD/- SD/- (I.C. SUDHIR) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER PUNE: DATED: 29 TH JULY, 2011 B COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEE 2. DEPARTME NT 3. THE CIT(A)-III,PUNE 4. THE CIT, III, PUNE 5. THE D.R, A BENCH, PUNE 6. GUARD FILE TRUE COPY BY ORDER ASSSITANT REGISTRAR ITAT, PUNE BENCHES, PUNE