SHEETAL ANUSANDHAN AND GRAMIN VIKAS SANSTHA, AMBIKAPUR (CG) V. JOINT. CIT, RANGE- KORBA, KORBA(CG)

ITA 147/BIL/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8981 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 25-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS SHEETAL VERMA
• Assessee Lawyers: S R RAO
• Keywords: Bonafide belief; Reasonable cause
• Section: 273B; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NOS.146 & 147/RPR/20 14 ASSESSMENT YEARS : 2008-09 & 2009-2010 SEETAL ANUSANDHAN & GRAMIN VIKAS SANSTHAN, AMBIKAPUR VS. JCIT, KORBA PAN/GIR NO.AAFTS 2990 E (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI S.R.RAO, AR REVENUE BY : MRS SHEETAL VERMA, DR DATE OF HEARING : 12/01/ 2018 DATE OF PRONOUNCEMENT : 15 /01/ 2018 O R D E R PER PAVAN KUMAR GADALE, JM BOTH THE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAIN ST SEPARATE ORDER OF THE CIT(A) BOTH DATED 8.10.2012 OF THE CIT (A)-BILASPUR FOR THE ASSESSMENT YEARS 2008-09 & 2009-2010. 2. IN BOTH THE APPEALS, THE ASSESSEE IS AGGRIEVED BY THE CONFIRMATION OF PENALTY U/S.272(A)(2)(E) OF THE I.T.ACT, 1961 OF RS.15 ,700/- FOR THE ASSESSMENT YEAR 2008-09 AND RS.18,100/- FOR THE ASSESSMENT YEAR 2009- 2010. 2 3. THE ASSESSEE IS A SOCIETY REGISTERED UNDER SOCIETY REGIST RATION ACT AS WELL AS U/S.12A OF INCOME TAX ACT, 1961. THE SOCIETY I S SOLELY ENGAGED IN IMPARTING EDUCATION AND MEDICAL /HEALTH CAMP THROUGH I TS INSTITUTIONS. THE PENALTY PROCEEDINGS WERE INITIATED UNDER SECTION 272A(2 )(E) FOR THE YEARS UNDER CONSIDERATION ON THE GROUND THAT THE ASSESSEE HAD FILED THE RETURN OF INCOME LATE BY 157 DAYS FOR THE ASSESSMENT YEAR 2008-09 AND 181 DAYS FOR THE ASSESSMENT YEAR 2009-2010. THE EXPLANATION OF THE A SSESSEE WAS THAT THE ACTIVITY OF THE SOCIETY IS IMPARTING EDUCATION AND SINCE RECEIPTS OF THE YEARS UNDER CONSIDERATION WERE LESS THAN RS.1 CRORE, THE I NCOME IS EXEMPT U/S.10(23C) (IIIAD) OF THE ACT, THE SOCIETY WAS UNDER B ONAFIDE BELIEF THAT IT IS NOT OBLIGED TO FILE RETURN OF INCOME AND AS SUCH NO P ENALTY CAN BE LEVIED FOR DELAY IN FILING THE RETURNS. THIS EXPLANATION WAS NOT ACCEPTED BY THE ASSESSING OFFICER AND, ACCORDINGLY, PENALTY OF RS.15,700/- FOR THE ASSESSMENT YEAR 2008-09 AND RS.18,100/- FOR THE ASSESSMENT YEAR 2009- 2010 WAS IMPOSED BY THE ASSESSING OFFICER U/S.272A(2)(E) OF THE I.T.ACT, 1961. 4. THE MATTER WAS CARRIED BEFORE THE COMMISSIONER (AP PEALS), WHO HAS HELD THAT THE ASSESSEE-SOCIETY IS EXEMPT UNDER SECTION 10( 23C)(IIIAD) OF THE ACT. AS PER THE TRUST DEED, THERE IS A MANAGING COMMITTE E TO HOLD THE ASSETS OF THE SOCIETY ON BEHALF OF ITS MEMBERS. IT WAS HELD TH AT THE ASSESSEE SOCIETY HAS NOT PLEADED ANY REASONABLE CAUSE FOR DELAY IN FILING THE RETURN OF 3 INCOME BEFORE THE ASSESSING OFFICER IN TRUE SENSE WITHIN TH E MEANING OF SECTION 273B OF THE ACT. THE SOCIETY IS AVAILING BENEFITS OF EXEMPTION U/S.11 & 12 OF THE ACT AND THE BONAFIDE OF BELIEF THAT IT I S NOT REQUIRED TO FILE INCOME TAX RETURN IS BASED ON REGISTRATION GRANTED UND ER THE AFORESAID SECTION, WHICH LAYS DOWN FULFILLMENT OF CERTAIN CONDITION S INCLUDING AUDITING OF ACCOUNT BOOKS AND FILING OF RETURN U/S.139(4A) EVERY YE AR. THE BOOKS OF ACCOUNTS OF THE YEAR WERE AUDITED. THEREFORE, IT CANNOT BE INFERRED THAT THE ASSESSEE SOCIETY IS NOT REQUIRED TO FILE INCOME TAX RETURNS . SINCE THE ASSESSEE SOCIETY HAS FILED INCOME TAX RETURN LATE, THE CIT( A) CONFIRMED THE LEVY OF PENALTY IMPOSED BY THE ASSESSING OFFICER FOR THE ASSESSMENT YEARS UNDER CONSIDERATION. AGGRIEVED BY THE SAME, THE ASSESSEE SOCIETY IS IN APPEALS BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE OR DERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. PENALTY MAY BE IMPOSED UNDER SECTION 272A(2)(E) FOR FAILURE TO FURNISH THE RETURN OF INCOME IN ACCORDANCE WITH THE PROVISIONS OF SECTION 139(4A) RWS 139(1) OF THE ACT. IN THE PRESENT CASE, THERE WAS NO DELIBERATENESS IN NOT FILING THE RETU RN OF INCOME WITHIN THE PRESCRIBED TIME LIMIT. THE ASSESSEE SOCIETY WAS UNDER A BONAFIDE BELIEF THAT SINCE THE INCOME OF THE SOCIETY IS EXEMPT, IT IS N OT REQUIRED TO FILE INCOME TAX RETURN. HOWEVER, WHEN IT CAME TO THE KNOW LEDGE OF THE ASSESSEE SOCIETY THAT IT IS REQUIRED TO FILE INCOME TAX RE TURN, IMMEDIATELY, 4 THE SOCIETY FILED THE SAME. PENALTY CANNOT BE LEVIED U NDER SECTION 272A(2)(E) IF THERE EXISTS SUFFICIENT OR REASONABLE CAUSE FOR THE DEFAULT. THE MEANING OF THE TERM 'REASONABLE CAUSE' AS ENUNCIATED B Y THE HON'BLE DELHI HIGH COURT IN THE CASE OF AZADI BACHAO ANDOLAN V UNIO N OF INDIA 252 ITR 471 READS AS FOLLOWS:- 'REASONABLE CAUSE CAN BE REASONABLY SAID TO BE A CAUSE WHIC H PREVENTS A MAN OF AVERAGE INTELLIGENCE AND ORDINARY P RUDENCE, ACTING UNDER NORMAL CIRCUMSTANCES, WITHOUT NEGLIGENCE OR INACTION OR WANT OF BONA FIDES'. 5. THE HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. V THE STATE OF ORISSA (83 ITR 26) HELD AS FOLLOWS:- 'AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI-CRIMINAL PROCEEDI NG, AND PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PART Y OBLIGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GU ILTY OF CONDUCT CONTUMACIOUS OR DISHONEST, OR ACTED IN CONSCIOUS DISREGARD TO ITS OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SH OULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDICIALL Y AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO I MPOSE PENALTY WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVI SION OF THE ACT OR WHERE THE BREACH FLOWS FROM A BONA FIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE'. 5 6. IN THE PRESENT CASE, THE ASSESSEE WAS UNDER A BONAFIDE IMPRESSION/BELIEF FOR NOT FILING THE RETURN OF INCOME. THE ASSESSEE DID NOT ACT DISHONESTLY OR NEGLIGENTLY. THE DELAY IN FILING THE R ETURN WAS DUE TO A REASONABLE AND GENUINE CAUSE. IT IS ALSO NOT A CASE THAT THE ASSESSEE DID NOT FILE A RETURN OF INCOME AT ALL. AS A RESULT OF LATE FI LING OF THE RETURNS, THERE WAS NO LOSS OF REVENUE TO THE GOVERNMENT. THE ASSESSEE HA D NO ULTERIOR MOTIVE TO DEFRAUD THE REVENUE AND HAD NOT ACTED DISHO NESTLY OR NEGLIGENTLY. THEREFORE, THERE WAS SUFFICIENT/ REASONABLE CAUSE FOR THE DELAY IN FURNISHING THE RETURN OF INCOME. 7. IN VIEW OF THE ABOVE, WE ARE OF THE VIEW THAT THE ASSESSEE SOCIETY IS NOT LIABLE FOR PENALTY UNDER SECTION 272A(2)(E) OF TH E ACT FOR DELAY IN FILING THE RETURNS OF INCOME. THEREFORE, WE CANCEL THE PENALT Y IMPOSED BY THE ASSESSING OFFICER FOR BOTH THE YEARS UNDER CONSIDERATION. 9. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON 15/01/2018. SD/- SD/- (N.S SAINI) ( PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIALMEMBER RAIPUR; DATED 15 /01/2018 B.K.PARIDA, SPS 6 COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, RAIPUR 1. THE APPELLANT : SEETAL ANUSANDHAN & GRAMIN VIKAS SANSTHAN, AMBIKAPUR 2. THE RESPONDENT. JCIT, KORBA 3. THE CIT(A)-BILASPUR 4. PR.CIT-BILASPUR 5. DR, ITAT, RAIPUR 6. GUARD FILE. //TRUE COPY//