NIRGUDKAR FOUNDATION, MUMBAI V. ADDL CIT (E) RG I, MUMBAI

ITA 4992/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54859 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2002-2003
• Appeal Filed On: 16-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P C MAURYA
• Assessee Lawyers: SANJAY R PARIKH
• Keywords: Reasonable cause
• Section: 11; 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B : MUMBAI BEFORE SHRI D.K. AGARWAL, (JUDICIAL MEMBER) AND SHRI RAJENDRA SINGH,(ACCOUNTANT MEMBER) ITA NO.4992 TO 4994/MUM/2010 ASSESSMENT YEARS : 2002-03; 2003-04 AND 2004-05 NIRGUDKAR FOUNDATION 1-736A, RATAN JYOTI PARSI COLONY, RD. NO.4 DADAR MUMBAI-400 014. ..( APPELLANT ) P.A. NO. (AAATN 0171 D) VS. ADDL. DIT(E) RANGE-II MUMBAI. ..( RESPONDENT ) APPELLANT BY : SHRI SANJAY R. PARIKH RESPONDENT BY : SHRI P. C. MAURYA DATE OF HEARING : 12.8.2011 DATE OF PRONOUNCEMENT : 17 TH AUGUST, 2011 O R D E R PER BENCH. THESE APPEALS OF THE ASSESSEE ARE DIRECTED AGAINST DIFFERE NT ORDERS OF CIT(A) ALL DATED 19.1.2010 FOR THE ASSESSMENT YEARS 2002- 03 TO 2004-05. THE ONLY DISPUTE RAISED THESE APPEALS I S REGARDING LEVY OF PENALTY UNDER SECTION 272 (A)(2)(E). SINCE I DENTICAL ISSUE IS RAISED IN ALL THE APPEALS, THESE ARE BEING DISPOSED OF B Y SINGLE CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.4992-94/M/10 A.Y:02-03 TO 04-05 2 2. BRIEFLY STATED, FACTS OF THE CASE ARE THAT THE ASSESSEE FOR THE ASSESSMENT YEARS 2002-03 , 2003-04 AND 2004-05 HAD FILED RETURNS OF INCOME ON 29.3.2006 WHEN AS PER PROVISIONS OF LAW RETU RNS WERE DUE TO BE FILED ON 31.10.2003, 31.10.2004 AND 31.10.200 5 RESPECTIVELY. THE AO, THEREFORE, INITIATED PENALTY PROCEEDINGS FOR LEVY OF PENALTY UNDER SECTION 272 (A)(2)(E) FOR DELAY IN FILING OF RE TURNS OF INCOME. HOWEVER, NO ONE APPEARED ON BEHALF OF THE ASSESSEE TO EX PLAIN THE DELAY AND AO THEREFORE, PRESUMED THAT THE ASSESSEE HAD NO REASONABLE CAUSE FOR DELAY IN FILING OF RETURNS AND ACCOR DINGLY HE LEVIED PENALTY @ 100/- PER DAY WHICH CAME TO RS.1,24,100/-, 8 7,700/- AND 51,300/- FOR THE THREE YEARS UNDER REFERENCE. THE ASSE SSEE DISPUTED THE DECISION OF THE AO AND SUBMITTED BEFORE THE CIT(A) THAT THE ASSESSEE HAD CARRIED OUT CHARITABLE ACTIVITIES AND THEREFOR E IN CASE PENALTY ARE IMPOSED THE ACTIVITY WILL HAVE TO BE CLOSE D. IT WAS SUBMITTED THAT THE DELAY WAS BECAUSE OF THE FACT THAT T HE ASSESSEE WAS NOT HAVING AN ACCOUNTANT FOR A LONG TIME AS CAPABLE PERSONS WERE NOT READY TO TAKE UP SMALL JOBS. IT WAS ALSO POINTED O UT THAT THERE WAS NO LOSS TO THE REVENUE AS INCOME WAS NOT TAXABLE. TH E TRUSTEES OFFERED SINCERE APOLOGY AND REQUESTED THAT THE SAME MAY BE CONDONED AND NO PENALTY SHOULD BE LEVIED. THE CIT(A) WAS HOW EVER NOT SATISFIED BY THE ARGUMENTS ADVANCED AND OBSERVED THAT TH ERE WAS NO ITA NO.4992-94/M/10 A.Y:02-03 TO 04-05 3 DOCUMENTARY EVIDENCE TO SHOW A REASONABLE CAUSE OF DELAY. HE, THEREFORE CONFIRMED THE PENALTY LEVIED BY AO AGGRIEV ED BY WHICH THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 2.1 BEFORE US, THE LD. AR FOR THE ASSESSEE SUBMITTED THAT THE ACCOUNTS FOR THREE YEARS HAD BEEN PREPARED ON TIME. TH E THEN PART- TIME ACCOUNTANT HAD INFORMED THE TRUSTEES THAT THE RET URNS HAD BEEN FILED. HOWEVER, AFTER THE SAID ACCOUNTANT LEFT AND ANOT HER PART-TIME ACCOUNTANT WAS APPOINTED, HE INFORMED THE TRUSTEES THAT NO RETURNS HAD BEEN FILED. THEREAFTER RETURNS WERE FILED VOLUN TARILY. AN AFFIDAVIT TO THE ABOVE FACT HAS BEEN FILED DULY SIGNED BY THE T RUSTEES WHICH HAS BEEN PLACED AT PAGE-29 OF THE PAPER BOOK. THE LD. A R ALSO SUBMITTED THAT THE NET INCOME WAS BELOW TAXABLE LIMIT WHICH HAS B EEN ACCEPTED BY THE DEPARTMENT. HE REFERRED TO THE P&L ACCOUNT FOR THREE YEARS PLACED AT PAGES 2, 10 AND 18 OF THE PAPER BOOK SHOWI NG THAT THERE WAS NET INCOME OF RS.2,875/-, RS.27,677/- AND RS.2,294/- RESPECTIVELY. IT WAS POINTED OUT THAT UNDER THE PROVI SIONS OF SECTION 139(4A), THE TRUST IS REQUIRED TO FILE RETURN OF INCOM E IF INCOME IS ABOVE NON TAXABLE LIMIT WITHOUT CONSIDERING EXEMPTION UNDER SECTION 11. IN THIS CASE TRUST WAS REGISTERED UNDER SECTION 12A AN D INCOME WAS EXEMPT BUT EVEN IF EXEMPTION WAS NOT GIVEN, THE I NCOME WAS WITHIN THE NON TAXABLE LIMIT AND THEREFORE, TECHNICAL LY NO RETURNS WERE ITA NO.4992-94/M/10 A.Y:02-03 TO 04-05 4 REQUIRED TO BE FILED. IT WAS ACCORDINGLY URGED THAT T HE PENALTIES LEVIED SHOULD BE DELETED. THE LD. DR ON THE OTHER HAND PLA CED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. 2.3 WE HAVE PERUSED THE RECORDS AND CONSIDERED THE RIVAL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDING LEVY OF PENALTY UNDER SECTION 272(A)(2)(E) FOR LATE FILING OF RETURNS OF INCO ME. THE RETURNS FOR ALL THE THREE YEARS HAD BEEN FILED ACTUALLY ON 29 .3.2006 WHEN THE DUE DATES WERE 31.10.2003, 31.10.2004 AND 31.10.2005 RESPECTIVELY. THE DELAY HAS BEEN EXPLAINED ON THE GROUND THAT THE TRUSTS PART TIME ACCOUNTANT HAD MIS-INFORMED THE TRUSTEES THAT THE RETU RNS HAD BEEN FILED. THE TRUSTEES CAME TO KNOW OF THE DE-FAULT ONLY WHEN THE SAID ACCOUNTANT LEFT AND NEW PART TIME ACCOUNTANT JOINED TH E TRUST WHO INFORMED THAT NO RETURNS HAD BEEN FILED. THEREAFTER , THE RETURNS WERE FILED VOLUNTARILY. THE TRUST HAS FILED AFFIDAVIT IN SUPPORT OF THE ABOVE CLAIM. WE ALSO NOTE FROM THE P&L ACCOUNTS FOR THE THREE YEARS PLACED ON RECORD THAT NET INCOME WAS RS.2875, RS.27,677/- AND R S.2,294/- RESPECTIVELY FOR THE THREE YEARS. THE TRUST WAS REGISTE RED UNDER SECTION 12A ABOUT WHICH THERE IS NO DISPUTE AND THEREFOR E, THE INCOME OF THE TRUST WAS ELIGIBLE FOR EXEMPTION UNDER SECTION 1 1. HOWEVER, EVEN IF EXEMPTION UNDER SECTION 11 IS NOT CONSIDERED, TH E INCOME IS BELOW THE NON TAXABLE LIMIT. IT HAS ALSO BEEN SUBMIT TED THAT THE ITA NO.4992-94/M/10 A.Y:02-03 TO 04-05 5 RETURNS FILED HAVE BEEN ACCEPTED SHOWING NIL DEMAND AN D THIS CLAIM HAS NOT BEEN CONTROVERTED BEFORE US. THEREFORE, THE TR UST IN FACT WAS NOT REQUIRED TO FILE RETURN UNDER THE PROVISION OF SE CTION 139(4A). CONSIDERING THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES, I N OUR VIEW, LEVY OF PENALTY IS NOT JUSTIFIED. WE, THEREFORE, SET ASIDE THE ORDERS OF THE CIT(A) AND DELETE THE PENALTIES LEVIED. 4. IN THE RESULT ALL THE THREE APPEALS OF THE ASSESSEE AR E ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17.8.2011. SD/- SD/- (D.K. AGARWAL) (RAJENDRA SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 17.8.2011. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.