Sondhi Charitable Hospital Society, New Delhi V. ADIT(E), New Delhi

ITA 4865/DEL/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5583 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2005-2006
• Appeal Filed On: 29-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BANITA DEVI
• Assessee Lawyers: SEKHON

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G: NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI K.D. RANJAN, ACCOUNTANT MEMBER ITA NO. 4865/DEL/2009 ASSESSMENT YEAR: 2005-06 SONDHI CHARITABLE HOSPITAL SOCIETY, JEEVAN ANMOL HOSPITAL, MAYUR VIHAR, PHASE-1, NEW DELHI. AACTS4226N VS. ADIT (E), RANGE-II, AAYAKAR BHAWAN, LAXMI NAGAR, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : M.S. SEKHON, CA RESPONDENT BY: BANITA DEVI, SR. DR O R D E R PER I.P. BANSAL, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DI RECTED AGAINST THE ORDER OF CIT(A) DATED 29 TH OCTOBER, 2009 FOR A.Y. 2005-06. GROUNDS OF APPEAL READ AS UNDER: - 1. THAT THE LD. CIT(A)-XXI, NEW DELHI, HAS ERRED I N CONFIRMING THE PENALTY OF RS. 15,000/- WHICH WAS IMPOSED BY THE AD DITIONAL DIRECTOR OF INCOME TAX (EXEMPTION), RANGE-II, NEW D ELHI, U/S 272A(2)(E) OF THE INCOME TAX ACT, 1961. 2. THAT THE ORDER OF THE LD. CIT(A) IS BAD IN LAW A ND ON THE FACTS OF THE CASE, AND, 3. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, A MEND OR WITHDRAW ANY OF THE GROUNDS OF APPEAL AT ANY TIME BEFORE OR AT THE TIME OF HEARING OF THIS APPEAL. 2 ITA NO. 4865/DEL/2 009 2. THE RETURN OF INCOME WAS FILED BY THE ASESSEE ON 31.3.06 WHICH WAS LATE BY 150 DAYS. IN RESPONSE TO SHOW CAUSE AG AINST LEVY OF PENALTY U/S 272A(2)(E) OF THE INCOME TAX ACT, 1961, IT WAS SUBMITTED BY THE ASSESSEE AS UNDER: - DURING THE ASSESSMENT YEAR IN QUESTION THE ACCOUNT S OF THE ASSESSEE SOCIETY WHICH WERE FINALIZED AND AUDITED I N THE THIRD WEEK OF MARCH, 2006, WERE ADOPTED BY THE GOVE RNING BODY ONLY ON 27.03.06 ON THEIR ADOPTION THE ASSESSE E TOOK IMMEDIATE STEPS TO FINALIZE AND FILE THE RETURN OF INCOME ON 31.03.06. 3. FURTHER THE CHARTERED ACCOUNTANT OF THE ASSESSEE SUBMITTED FOLLOWING REPLY VIDE LETTER DATED 22.02.08: THE ACCOUNTS FOR YEAR ENDED 31.03.05 WERE FINALIZE D AND AUDITED IN THE THIRD WEEK OF MARCH AND WERE ADOPTED BY THE GOVERNING BODY ONLY ON 27.03.06. 4. HOWEVER, AO FOUND THAT THE EXPLANATION SUBMITTED BY THE ASSESSEE WAS NOT SATISFACTORY. THEREFORE, HE LEVIE D PENALTY OF RS. 15,000/- @ 100 PER DAY. AGGRIEVED ASSESSEE FILED A N APPEAL BEFORE CIT(A). DURING THE COURSE OF APPELLATE PROCEEDINGS , IT WAS ALSO SUBMITTED THAT THE DELAY IN FINALIZATION OF ACCOUNT WAS MAINLY FOR THE REASON THAT DR. J.C. SONDHI WHO IS THE CHAIRMAN AND PATRIARCH OF THE HOSPITAL SOCIETY WAS NOT KEEPING WELL AND WAS IN AN D OUT OF HOSPITAL BECAUSE OF CARDIAC AND LEVER PROBLEMS. HE ALSO UND ER WENT BY-PASS SURGERY DURING THIS PERIOD. 3 ITA NO. 4865/DEL/2 009 5. THE CIT(A) DID NOT ACCEPT SUCH SUBMISSION ON THE GROUND THAT THIS FACT WAS NEVER BROUGHT TO THE NOTICE. ADIT DU RING THE COURSE OF PENALTY PROCEEDINGS THE EVIDENCE SUBMITTED BY THE A SSESSEE SHOWING THAT DR. J.C. SONDHI WAS DISCHARGED FROM THE HOSPIT AL, IT WAS OBSERVED BY LD. CIT(A) THAT DR. J.C. SONDHI WAS IN HOSPITAL BETWEEN 28.11.05 TO 11.12.05. THUS, HE OBSERVED THAT THE DELAY ALSO CO ULD NOT BE PROPERLY EXPLAINED BY THE ASSESSEE AS THE RETURN WAS FILED O N 31.3.06 AND HE HAS UPHELD THE PENALTY. THE ASSESSEE IS AGGRIEVED, HEN CE IN APPEAL. 6. FURTHER NARRATING THE FACTS IT WAS PLEADED BY LD . AR THAT THE ASSESSE IS A VERY OLD INSTITUTION CARRYING ON THE C HARITABLE ACTIVITY IN THE NATURE OF HOSPITAL AND IN THE PAST ASSESSEE HAS NEV ER DEFAULTED FOR FILING BELATED RETURNS. DURING THE YEAR UNDER CONSIDERATI ON DUE TO THE HEALTH PROBLEMS FACE BY DR. J.C. SONDHI THE RETURN WAS FIL ED LATE AS DUE TO ILL HEALTH OF DR. J.C. SONDHI ACCOUNTS COULD NOT BE GOT AUDITED. HE CONTENDED THAT LD. CIT(A) WAS WRONG IN NOT ACCEPTIN G THE SAID EXPLANATION. HE CONTENDED THAT THE DELAY IN FILING THE RETURN WAS SUPPORTED BY A REASONABLE AND SUFFICIENT CAUSE, THE REFORE, PENALTY SHOULD BE DELETED. 7. ON THE OTHER HAND, LD. DR RELYING ON THE ORDER O F AO AND CIT(A). 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS IN THE LIGHT OF MATERIAL PLACED BEFORE US. THE ASSESSEE HAS BEEN A BLE TO EXPLAIN THE DELAY AS ACCORDING TO ASSESSEE THE ILL HEALTH OF DR . J.C. SONDHI WAS THE 4 ITA NO. 4865/DEL/2 009 MAIN REASON FOR NOT GETTING THE ACCOUNTS AUDITED. IN OUR OPINION SUCH EXPLANATION OF THE ASSESSEE SHOULD HAVE BEEN ACCEPT ED. MOREOVER, THE ASSESSEE IS NOT HABITUAL DEFAULTER. THEREFORE, WE SEE NO JUSTIFICATION IN LEVY OF PENALTY, WHICH WE DELETE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 5.3.2010 (K.D. RANJAN) ACCOUNTANT MEMBER (I.P. BANSAL) JUDICIAL MEMBER DATED: 5.3.2010 *KAVITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER DEPUTY REGISTRAR