RATNAGIRI JILLHA MARATHA DNYATI SAMAJ, MUMBAI V. ADDL DIT (E) RG 1, MUMBAI

ITA 487/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3549 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2004-2005
• Appeal Filed On: 18-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PEEYUSH SONKAR
• Section: 80G; 10

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI . . !' #$%& , !' () ! BEFORE SHRI H.L. KARWA, PRESIDENT AND SHRI N.K. BILLAIYA, AM ./I.T.A. NOS.487 & 488/MUM/2011 ( * * * * / ASSESSMENT YEARS : 2004-05 & 2005-06 RATNAGIRI JILLHA MARATHA DNYATI SAMAJ, C/O BALVIKAS VIDYA MANDIR, MEFHWADI, JOGESHWARI EAST, MUMBAI-400 060 / VS. THE ADDL DIT(E), RANGE-1, PIRAMAL CHAMBERS, PAREL, MUMBAI-400 017 )+ !' ./ ,- ./PAN/GIR NO. : AAATR 0602D ( +. /APPELLANT ) .. ( /0+. / RESPONDENT ) +. 1 ! / APPELLANT BY: NONE /0+. 2 1 ! / RESPONDENT BY : SHRI PEEYUSH SONKAR 2 3' / DATE OF HEARING : 28.05.2013 45* 2 3' / DATE OF PRONOUNCEMENT :28.05.2013 (!6 / O R D E R PER N.K. BILLAIYA, AM: THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGA INST TWO SEPARATE ORDERS OF THE LD. CIT(A)-1, MUMBAI PERTAI NING TO TWO DIFFERENT ASSESSMENT YEAR I.E. ASSESSMENT YEARS 2004-05 AND 2 005-06. AS BOTH THESE APPEALS INVOLVED COMMON ISSUES, THEY WERE HEA RD TOGETHER AND DISPOSE OFF BY THIS COMMON ORDER FOR THE SAKE OF CO NVENIENCE AND BREVITY. ITA NO. 487/M/2011 A.Y. 2004-05 ITA NOS. 487 & 488/MUM/2011 2 2. THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE L D. CIT(A) ERRED IN CONFIRMING THE PENALTY LEVIED BY THE AO FOR BELATED FILING OF RETURN OF INCOME U/S. 139(4C) OF THE ACT. 3. THE ASSESSEE WAS REPRESENTED BY NONE THEREFORE W E HAVE PROCEEDED ON THE BASIS OF MATERIAL FACTS ON RECORD AND THE SU BMISSIONS OF THE LD. DEPARTMENTAL REPRESENTATIVE. 4. THE ISSUE RELATES TO LEVY OF PENALTY U/S. 272A(2 )(E) OF THE I.T. ACT. IT IS THE SAY OF THE ASSESSING OFFICER THAT THE ASS ESSEE WAS LIABLE TO FILE THE RETURN OF INCOME ON OR BEFORE 31.10.2004 WHEREA S THE ASSESSEE HAS FILED ITS RETURN ON 6.9.2007 WHICH RESULTED INTO A DELAY OF 1039 DAYS. THE AO ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE ASKING IT WHY PENALTY OF RS. 100/- FOR EVERY DAY OF DELAY BE NOT LEVIED FOR FAIL URE TO COMPLY WITH THE PROVISIONS OF SEC. 139(4C) OF THE ACT. ON RECEIVING NO RESPONSE THE AO WENT ON TO LEVY PENALTY @ RS.100 PER DAY OF DELAY I N DEFAULT AMOUNTING TO RS.103900/- 5. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A). IT WAS EXPLAINED THAT THE ASSESSEE RUNS SCHOOLS CATERING T O EDUCATION TO PREPRIMARY, PRIMARY, SECONDARY CLASS STUDENTS. THE PRIMARY & SECONDARY SCHOOLS ARE AIDED BY THE GOVT. OF MAHARASHTRA FROM WHICH THE TRUST RECEIVES GRANT. IT WAS FURTHER EXPLAINED THAT SINC E THE TRUST IS AN EDUCATIONAL INSTITUTION SUBSTANTIALLY FINANCED BY T HE GOVT. OF MAHARASHTRA, THEREFORE, ITS INCOME IS EXEMPT U/S. 1 0(23C)(IIIAB). THEREFORE, THERE IS NO MANDATE U/S. 139(4C) OF THE ACT TO FILE THE RETURN. SINCE THERE IS NO MANDATE TO FILE THE RETURN, THE R ETURN WAS FILED VOLUNTARILY FOR AVAILING THE BENEFIT OF SECTION 80G , THEREFORE THERE WAS A BONA FIDE REASON IN DELAY IN FILING OF THE RETURN, HENCE NO PENALTY SHOULD BE LEVIED. ITA NOS. 487 & 488/MUM/2011 3 5.1. THE SUBMISSIONS OF THE ASSESSEE WERE REJECTED BY THE LD. CIT(A). THE LD. CIT(A) WAS OF THE BELIEF THAT JUST BECAUSE THERE IS NO MANDATE U/S. 139(4C) OF THE ACT TO FILE THE RETURN, IT DOES NOT GIVE RIGHT TO THE TRUST FOR NOT FILING THE RETURN OF INCOME IN TIME. ACCO RDING TO THE LD. CIT(A), THE ASSESSEE TRUST HAS VIOLATED THE PROVISIONS OF L AW IN NOT FILING THE RETURN OF INCOME TIMELY AND WENT ON TO CONFIRM THE PENALTY LEVIED BY THE AO. 6. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUP PORTED THE FINDINGS OF THE LOWER AUTHORITIES. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. IT IS NOT IN DISPUTE THAT THE ASSESSEE IS AN EDUCATIONAL INSTITUTION EXISTING SOLELY FOR EDUC ATIONAL PURPOSE AND NOT FOR THE PURPOSE OF PROFITS. IT IS ALSO NOT IN DISP UTE THAT THE ASSESSEE TRUST IS SUBSTANTIALLY FINANCED BY GOVT. OF MAHARASHTRA. TH ESE BEING THE FACT OF THE MATTER, THE INCOME OF THE ASSESSEE IS EXEMPT U/ S. 10(23C)(IIIAB) OF THE ACT. A PERUSAL OF SEC. 139(4C), SO FAR AS IT RELATE S TO THE ASSESSEE SHOW THAT CLAUSE (E) OF SEC. 139(4C) IN WHICH, FUND OR INSTITUTION REFERRED TO IN SUB-CLAUSE ( IV ) OR TRUST OR INSTITUTION REFERRED TO IN SUB-CLAUSE ( V ) OR ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION REFERRE D TO IN [SUB-CLAUSE ( IIIAD ) OR] SUB-CLAUSE ( VI ) OR ANY HOSPITAL OR OTHER MEDICAL INSTITUTION REFE RRED TO IN [SUB-CLAUSE ( IIIAE ) OR] SUB-CLAUSE ( VIA ) OF CLAUSE ( 23C ) OF SECTION 10 . 8. A PLAIN READING OF THE AFORESAID SECTION SHOW TH AT THOSE TRUST WHO ARE EXEMPT U/S. 10(23C(IIIAB) ARE NOT COVERED BY PR OVISIONS OF SEC. 139(4C). THIS ESTABLISHES THE BONAFIDES OF THE ASS ESSEE FOR NOT FILING THE RETURN. THE ASSESSEE FILED RETURN VOLUNTARILY FOR SEEKING THE BENEFIT OF SEC. 80G. THEREFORE, CONSIDERING THE FACTS IN THE LIGHT OF THE PROVISIONS OF SEC. 139(4C) VIS--VIS 10(23C)(IIIAB), IN OUR HU MBLE OPINION, THE ITA NOS. 487 & 488/MUM/2011 4 ASSESSEE WAS PREVENTED BY A REASONABLE AND SUFFICIE NT CAUSE FOR NOT FILING THE RETURN U/S. 139(4C) ON TIME. BEFORE PARTING , I T WOULD NOT BE OUT OF PLACE TO MENTION THAT EVEN THE PROVISIONS OF SEC.13 9[4A] DOES NOT APPLY ON THE FACTS OF THE CASE AS THE ASSESSEE WAS NOT OB LIGED TO FILE THE RETURN UNDER THAT SECTION ALSO .THEREFORE NO PENALTY IS LE VIABLE ON THIS GROUND ALSO. THEREFORE, REVERSING THE FINDINGS OF THE LD. CIT(A), WE DIRECT THE AO TO CANCEL THE PENALTY SO LEVIED. ITA NO. 488/M/2011 A.Y. 2005-06 9. THE ISSUE INVOLVED IS IDENTICAL WITH THE ISSUE I N ITA NO. 487/M/2011, THOUGH QUANTUM MAY DIFFER, THEREFORE, O N SIMILAR LINES, SIMILAR REASONS, THE APPEAL FILED BY THE ASSESSEE I N ITA NO. 488/M/2011 FOR ASSESSMENT YEAR 2005-2006 IS ALSO ALLOWED. 10. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.05.2013 . (!6 2 5* '! 7 8( 9 28.05.2013 5 2 : SD/- SD/- (H.L. KARWA ) (N.K . BILLAIYA ) /PRESIDENT !' () / ACCOUNTANT MEMBER MUMBAI; 8( DATED 28 /05 /2013 . . ./ RJ , SR. PS