CHHATTISGARH SABRI SEWA SANSTHAN, SARGUJA (C.G) V. JOINT. CIT, RANGE- KORBA, KORBA(CG)

ITA 30/BIL/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8939 (ITAT-RAIPUR)
• Duration Of Justice: 2 year(s) 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 30-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P CHAUDHURY
• Assessee Lawyers: G S AGARWAL
• 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.30/RPR/2015 ASSESSMENT YEAR : 2009-2010 CHHATISGARH SABRI SEWA SANSTHAN, BAZARPARA, PO: LAKHANPUR, SARGUJA. VS. JCIT, RANGE, KORBA PAN/GIR NO.AAAAC 3370 Q (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI G.S.AGARWAL, AR REVENUE BY : SHRI O.P.CHAUDHURY, DR DATE OF HEARING : 17/01/ 2018 DATE OF PRONOUNCEMENT : 18 /01/ 2018 O R D E R PER PAVAN KUMAR GADALE, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDE R OF THE CIT(A) DATED 20.10.2014 OF THE CIT(A)-BILASPUR FOR THE ASSESSM ENT YEARS 2009-10. 2. THE SOLE GRIEVANCE IN THIS APPEAL IS THAT THE CIT(A ) ERRED IN CONFIRMING PENALTY U/S.272(A)(2)(E) OF THE I.T.ACT, 1961 OF RS.41 ,100/- FOR THE ASSESSMENT YEAR 2009-2010. 3. THE ASSESSEE IS A SOCIETY REGISTERED UNDER SOCIETY REGI STRATION ACT AS WELL AS U/S.12AA OF INCOME TAX ACT, 1961 AND CLAIMS DEDU CTION U/S.11 & 12 OF THE ACT. THE PENALTY PROCEEDINGS WERE INITIATED UNDER SECTION 272A(2)(E) 2 FOR THE YEAR UNDER CONSIDERATION ON THE GROUND THAT T HE ASSESSEE HAD FILED THE RETURN OF INCOME LATE BY 411 DAYS FOR THE ASSESSMENT YEAR. THE EXPLANATION OF THE ASSESSEE WAS THAT THE INCOME OF THE ASSE SSEE IS BELOW TAXABLE LIMIT AND, THEREFORE, THE SOCIETY WAS UNDER B ONAFIDE BELIEF THAT IT IS NOT OBLIGED TO FILE RETURN OF INCOME AND AS SUCH NO PE NALTY CAN BE LEVIED FOR DELAY IN FILING THE RETURN OF INCOME. THIS EXPLANATIO N WAS NOT ACCEPTED BY THE ASSESSING OFFICER AND, ACCORDINGLY, PENALTY OF RS.41,1 00/- WAS IMPOSED BY THE ASSESSING OFFICER U/S.272A(2)(E) OF THE I.T.ACT, 19 61. 4. THE MATTER WAS CARRIED BEFORE THE COMMISSIONER (AP PEALS), WHO HAS HELD THAT AS PER THE TRUST DEED, THERE IS A MANAGING CO MMITTEE TO HOLD THE ASSETS OF THE SOCIETY ON BEHALF OF ITS MEMBERS. IT WAS HEL D THAT THE ASSESSEE SOCIETY HAS NOT PLEADED ANY REASONABLE CAUSE FOR DELAY IN FILING THE RETURN OF 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 BELIEF THAT IT IS N OT REQUIRED TO FILE INCOME TAX RETURN IS BASED ON REGISTRATION GRANTED UNDER THE AFORESAID SECTION, WHICH LAYS DOWN FULFILLMENT OF CERTAIN CONDITIONS INCLUDI NG AUDITING OF ACCOUNT BOOKS AND FILING OF RETURN U/S.139(4A) EVERY YEAR. T HE BOOKS OF ACCOUNTS OF THE YEAR WERE AUDITED. THEREFORE, IT CANNOT BE INFE RRED THAT THE ASSESSEE SOCIETY IS NOT REQUIRED TO FILE INCOME TAX RETURNS. SI NCE THE ASSESSEE SOCIETY HAS FILED INCOME TAX RETURN LATE, THE CIT(A) CONFIRMED THE LEVY OF PENALTY 3 IMPOSED BY THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR UNDE R CONSIDERATION. AGGRIEVED BY THE SAME, THE ASSESSEE SOCIETY IS IN APPEAL BEFORE THE TRIBUNAL. 4.1 WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE O RDERS 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 RET URN, IMMEDIATELY, ON THE ADVICE OF THE COUNSEL, THE SOCIETY FILED THE SAME. PENALTY CANNOT BE LEVIED UNDER SECTION 272A(2)(E) IF THERE EXISTS SUFFICIE NT OR REASONABLE CAUSE FOR THE DEFAULT. THE MEANING OF THE TERM 'REASONABLE CAUSE' AS ENUNCIATED BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF AZADI BACHAO ANDOLAN V UNION 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'. 4 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'. 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 F ILING OF THE RETURN, THERE WAS NO LOSS OF REVENUE TO THE GOVERNMENT. THE ASSESSEE HAD N O ULTERIOR MOTIVE TO DEFRAUD THE REVENUE AND HAD NOT ACTED DISHONESTLY OR NEGLIGENTLY. THEREFORE, THERE WAS SUFFICIENT/ REASONABLE CAUSE FOR THE DELAY IN FURNISHING THE RETURN OF INCOME. 5 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 RETURN OF INCOME. THEREFORE, WE CANCEL THE PENALT Y OF RS.41,100/- IMPOSED BY THE ASSESSING OFFICER. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 18 /01/2018. SD/- SD/- (N.S SAINI) ( PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIALMEMBER RAIPUR; DATED 18 /01/2018 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, RAIPUR 1. THE APPELLANT : CHHATISGARH SABRI SEWA SANSTHAN, BAZARPARA, PO: LAKHANPUR, SARGUJA 2. THE RESPONDENT. JCIT, RANGE, KORBA 3. THE CIT(A)-BILASPUR 4. PR.CIT-BILASPUR 5. DR, ITAT, RAIPUR 6. GUARD FILE. //TRUE COPY//