M/s.Sri Anjanadri Education Trust, Davangere V. Deputy Commissioner of Income Tax, Davangere

ITA 1669/BANG/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7634 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 19-09-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI
• Keywords: Charitable institution; Reasonable cause; Ignorance of law
• Section: 143(3); 12AA; 12; 11; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, B ENGALURU BEFORE S HRI N.V.VASUDEVAN , JUDICIAL MEMBER AND SHRI INTURI RAMA RAO , ACCOUNTANT MEMBER I TA NO. 1669 / BANG/2 0 1 6 (ASSESSMENT YEAR: 2009 - 10 ) SRI ANJANADRI EDUCATION TRUST, # 1832/10, LIC COLONY , BIET, VIDYANAGAR ROAD, DAVANGERE - 577 004. PAN:AAHTS 6698 H VS. APPELLANT DEPUTY COMMISSIONER OF INCOME - TAX, CIRCLE 1(1), DAVANGERE. RESPONDENT APPELLANT BY : SHRI RAVISHANKAR, ADVOCATE. RESPONDENT BY : SMT.PADMAMEENAKSHI, JCIT (DR) DATE OF HEARING : 16/07/2018 DATE OF PRONOUNCEMENT : 20 /07/2018 O R D E R PER INTURI RAMA RAO, JM : THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS), DAVANGERE, DA TED 27/07/2016 FOR THE ASSESSMENT YEAR 2009 - 10. 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL: ITA NO . 1669 /BANG/20 16 PAGE 2 OF 5 3. BRIEFLY FACTS OF THE CASE ARE THAT THE ASSESSEE IS A TRUST DULY REGISTERED UNDER THE PROVISIONS OF SECTION 12AA OF THE INCOME - TAX ACT, 1 961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT] WITH THE LD. COMMISSIONER OF INCOME - TAX, VIDE LETTER F.NO.T - 1158/12AA/CIT - ITA NO . 1669 /BANG/20 16 PAGE 3 OF 5 DVG/2008 - 09 DATED 20/03/2009. THE R/ FOR THE ASSESSMENT YEAR 2009 - 10 WAS FILED ON 25/03/2011 DECLARING NIL INCOME AFTER CLAIMI NG EXEMPTION U/S 11 OF THE ACT. AGAINST SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY THE ASSESSING OFFICER (AO) VIDE ORDER DATED 21/12/2011 PASSED U/S 143(3) ACCEPTING THE RETURN ED INCOME. HOWEVER, AO ON NOTICING THAT THE APPELLANT HAD NOT FILE D RETURN OF INCOME IN TERMS OF PROVISIONS OF SUB - SECTION (4A) OF SECTION 139 OF THE ACT, HAD ISSUED SHOW CAUSE NOTICE DATED 26/06/2013 CALLING UPON THE APPELLANT - TRUST TO SHOW CAUSE WHY AN ORDER IMPOSING PENALTY U/S 272A(2)(E) OF THE ACT SHOULD NOT BE LEV IED. IN RESPONSE TO THE SAID SHOW CAUSE NOTICE, AN EXPLANATION WAS FILED BEFORE AO STATING THAT THE RETURN WAS NOT F I IED WITHIN DUE DATE PRESCRIBED U/S 139(4A) FOLLOWING THE ADVICE GIVEN BY THE ACCOUNTS MANGER OF THE TRUST VIZ., SHRI OBAIAH. THE SAID EXP LANATION WAS REJECTED BY THE AO BY HOLDING THAT PLEA OF IGNORANCE OF LAW CANNOT BE ACCEPTED. THEN HE PROCEEDED WITH LEVY OF PENALTY AS PROVIDED U/S 272A(2)(E) OF THE ACT AT THE RATE OF RS.100/ - PER DAY VIDE ORDER DATED 17/10/2013 AND ACCORDINGLY LEVIED P ENALTY OF RS.54,100/ - FOR DELAY OF 541 DAYS. 4. BEING AGGRIEVED, AN APPEAL WAS PREFERRED BEFORE THE LD.CIT(A) WHO VIDE IMPUGNED ORDER, HAD CONFIRMED THE PENALTY PLACING RELIANCE ON THE DECISION OF THE HON BLE BOMBAY HIGH COURT IN THE CASE OF DIRECTOR OF IN COME - TAX VS. MALAD JAIN YUVK MANDAL MEDICAL RELIEF CENTRE DATED 30/03/2001 WHEREIN THE HON BLE BOMBAY HIGH COURT, AFTER REFERRING TO THE DECISION OF THE HON BLE APEX COURT IN THE CASE OF ADITANAR EDUCATIONAL INSTITUTION VS. ADDL.JCIT (224 ITR 311) HAD CONF IRMED LEVY OF PENALTY BY HOLDING THAT THE PROVISIONS OF SECTION 139(4A) REQUIRE D TO BE INTERPRETED STRICTLY. 5. BEING AGGRIEVED, THE ASSESSEE IS BEFORE US IN THE PRESENT APPEAL. 5.1 LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE - TRUST WAS UND ER BONA FIDE BELIEF THAT THE RETURN OF INCOME WAS NOT REQUIRED TO BE FILED BASED ON THE ADVICE GIVEN BY THE ITA NO . 1669 /BANG/20 16 PAGE 4 OF 5 ACCOUNTS MANAGER OF THE ASSESSEE - TRUST AND THEREFORE, NO PENALTY SHOULD BE LEVIED. IT IS FURTHER SUBMITTED THAT IGNORANCE OF LAW CONSTITUTES REASON ABLE CAUSE FOR NOT FILING RETURN OF INCOME WITHIN DUE DATE PRESCRIBED. RELIANCE IN THIS REGARD WAS PLACED ON THE FOLLOWING DECISIONS: I. MOTILAL PADAMPAT SUGAR MILLS CO. LTD. (118 ITR 326)(SC); II. K.P.V.SHAIK MOHAMMED ROWTHER & CO., (232 ITR 176)(MAD) III. P.V.DEVAS SY (84 ITR 502)(KER) IT WAS FURTHER SUBMITTED THAT IT IS ONLY TECHNICAL BREACH OF LAW WHICH D OES NOT WARRANT LEVY OF PENALTY PLACING RELIANCE ON THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. (83 ITR 26) . IT IS FURTHER ARGU ED THAT PENALTY CAN BE LEVIED ONLY ON THE TRUSTEES OF THE APPELLANT - TRUST IN THE CAPACITY OF THE REPRESENTATIVE ASSESSEE AND NOT ON THE TRUST ITSELF. 5.2 ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY OPPOSED THE SUBMISSIONS OF THE LEARN ED COUNSEL FOR THE ASSESSEE - TRUST. HE SUBMITTED THAT IGNORANCE OF LAW CANNOT BE VALID REASON FOR VIOLATING THE MANDATORY PROVISIONS OF SECTION 139(4A) O F THE ACT. THE PROVISIONS OF SECTION 273 (B) OF THE ACT WHICH PRESCRIBE S REASONABLE CAUSE FOR NON LEVY OF PENALTY DOES NOT INCLUDE PENALTY U/S 272(2)(E) DURING THE RELEVANT PERIOD UNDER CONSIDERATION. 6. WE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ONLY ISSUE IN THE PRESENT APPEAL IS WHETHER LEVY OF PENALTY U/S 272(2)(E) OF THE ACT IS JUSTIFIED, HAVING REGARD TO THE FACT THAT DELAY IN FILING RETURN OF INCOME WITHIN DUE DATE PRESCRIBED U/S 139(4A) IS ON ACCOUNT OF IGNORANCE OF LAW. THE PROVISIONS OF SECTION 139(4A) OF THE ACT LAY DOWN THAT EVERY RELIGIOUS OR CHARITABLE INSTITUTION WHOS E INCOME WAS EXEMPT U/S 11 AND 12 OF THE ACT IS REQUIRE D TO FURNISH RETURN OF INCOME OF THE PREVIOUS YEAR WITHIN DUE DATE PRESCRIBED U/S 139 (1) OF THE ACT. IN THE PRESENT CASE, UNDISPUTEDLY, THERE IS DELAY IN FILING RETURN OF INCOME BY 541 DAYS. ACCORDIN GLY, AO IMPOSED PENALTY OF RS.54 , 10 0 / - AT THE RATE OF ITA NO . 1669 /BANG/20 16 PAGE 5 OF 5 RS.100/ - PER DAY OF DELAY . A S HELD BY THE HON BLE SUPREME COURT IN THE CASE OF ADITANAR EDUCATIONAL INSTITUTION (SUPRA) , THE ASSESSEE CLAIMING EXEMPTION U/SS.11 AND 12 OF THE ACT, SHOULD MANDATORILY FIL E RETURN OF INCOME AS THE ASSESSEE S CLAIM FOR EXEMPTION COULD BE DECIDED BY THE DEPARTMENT ONLY AFTER RELEVANT MATERIAL IS PLACED BEFORE THE DEPARTMENT BY FILING THE RETURN OF INCOME. THE PROVISIONS OF SECTI ON 273 - B MANDATES THAT PENALTY IS NOT TO BE LEV IED IF A REASONABLE CAUSE IS ESTABLISHED . IN THE PRESENT CASE, THE PARLIAMENT HAD INSERTED SECTION 272A IN THE PROVISIONS OF SECTION 273 - B ONLY BY FINANCE ACT, 2012 W.E.F. 01/04/2012. THEREFORE, DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION, LEVY OF PENALTY IS MANDATORY EVEN IF THERE IS A REASONABLE CAUSE . THEREFORE, WE DO NOT SEE ANY MERIT IN THE SUBMISSION MADE BY THE ASSESSEE. THE ACT DOES NOT CONFER ANY DISCRETION ON THE AO NOT TO LEVY PENALTY IN CASE REASONABLE CAUSE IS SH OWN TO EXIST. AS REGARDS THE ALTERNATIVE PLEA THAT PENALTY CAN BE LEVIED ONLY IN CASE OF REPRESENTATIVE ASSESSEE NOT ON THE ASSESSEE - TRUST ITSELF, THERE IS NO GROUND OF APPEAL WAS RAISED ON THIS ISSUE NOR THIS ISSUE WAS RAISED BEFORE THE LOWER AUTHORITIES AND THEREFORE, NO DECISION CAN BE RENDERED ON THIS ISSUE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JU LY , 2018 S D/ - SD/ - (N.V.VASUDEVAN) ( INTURI RAMA RAO) JUDICIAL MEMBER ACCO UNTANT M EMBER PLACE : BENGALURU. D A T E D : / 0 7 /201 8 SRINIVASULU, SPS COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A) 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY INCOME - TAX APPELLATE TRIBUNAL BANGALORE