Vaidic Shiksha Samiti, Narnaul V. Addl.CIT, Range-2, Chandigarh

ITA 6049/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3881 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2014-2015
• Appeal Filed On: 20-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GOVIND SINGHAL
• Assessee Lawyers: DHARAMPAL
• Keywords: Bonafide belief; Reasonable cause
• Section: 143(3); 139(1); 10; 2; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DLEHI BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER ITA NO.6049 & 6050/DEL/2018 ASSESSMENT YEAR: 2014-15 & 2015-16 VAIDIC SHIKSHA SAMITI, VS. ADDL.CIT, RANGE-2, CHINDALIA NANGAL KATHA, CHANDIGARH. NARNAUL (HARYANA) PAN : AAACM7069C (APPELLANT) (RESPONDENT) APPELLANT BY : SH. DHARAMPAL, RESPONDENT BY: SH. GOVIND SINGHAL, SR. DR DATE OF HEARING: 30/09/2021 DATE OF ORDER : 30/09/2021 ORDER PER K. NARASIMHA CHARY, J.M. AGGRIEVED BY THE ORDERS DATED 27/6/2018 AND 28/6/20 18 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS), ROHTAK (LD. CIT(A)) IN THE CASES OF VAIDIC SIKSHA SAMITI, NARNAUL, HARYANA (THE ASSESSEE) FOR THE ASSESSMENT YEAR 20 14-15 AND 2015- 16 RESPECTIVELY, ASSESSEE PREFERRED THESE TWO APPEA LS. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A SOCIETY IMPARTING EDUCATION. ACCORDING TO THEM THE RECEIPTS FOR THE ASSESSMENT YEAR 2014-15 AND 2015-16 WERE LESS THAN RUPEES ONE CRORE AND THE INCOME OF THE SOCIETY WAS EXEMPT UNDE R SECTION 10 2 (23C) (IIIAD) OF THE INCOME TAX ACT, 1961 (FOR SHOR T THE ACT) AND AFTER CLAIMING EXEMPTION THEREUNDER, THE INCOME OF THE ASSESSEE WAS NIL, AND THEREFORE, THE ASSESSEE WAS UNDER THE IMPRESSION THAT IT WAS NOT OBLIGATED FOR THEM TO FILE THE RETURN OF IN COME AND THEREFORE THEY DID NOT FILE THE RETURN IN TIME. SUBSEQUENTLY WHEN THEY CAME TO KNOW OF THE LEGAL REQUIREMENT, THEY FILED THEIR RET URNS OF INCOME AND THE INCOME OF THE ASSESSEE WAS DETERMINED UNDER SEC TION 143(3) OF THE ACT. LEARNED ASSESSING OFFICER, HOWEVER, OBSERV ING THAT THE ASSESSEE FAILED TO FULFIL THE RESPONSIBILITY TO FIL E A RETURN IN TIME AS PER THE REQUIREMENT OF SECTION 139 (4A)/(4C) OF THE ACT, LEVIED PENALTY OF RS. 51,600/-AND RS. 18,300/- FOR THESE 2 YEARS RESPECTIVELY. 3. AGGRIEVED BY SUCH LEVY OF PENALTY, ASSESSEE PREF ERRED APPEALS BEFORE THE LD. CIT(A) AND THE LD. CIT(A) UPHELD THE PENALTY ON THE GROUND THAT THERE WAS NO REASONABLE CAUSE WHICH PRE VENTED THE ASSESSEE FROM PERFORMING THEIR STATUTORY OBLIGATION OF FILING THE RETURN OF INCOME IN TIME AND THEREFORE, PENALTY WAS PROPERLY LEVIED. 4. ASSESSEE IS THEREFORE BEFORE US CONTENDING THAT INASMUCH AS THE RECEIPTS OF THE ASSESSEE FOR BOTH THE YEARS ARE LESS THAN ONE CRORE OF RUPEES, THE ASSESSEE WAS UNDER THE BONA FIDE IMPRESSION THAT THEY DID NOT MANDATE REALLY TO FILE THE RETURN OF INCOME AND THE MOMENT THEY COME TO KNOW OF THEIR LEGAL OBLIGATION, THE RETURN OF INCOME WAS FILED AND WAS PROPERLY PROCESSED. ACCORD ING TO THE ASSESSEE, THIS CONSTITUTES A SUFFICIENT CAUSE BECAU SE THE ASSESSEE 3 DOES NOT STAND TO GAIN BY NOT FILING THE RETURN OF INCOME. RELIANCE IS PLACED ON THE DECISION OF THE RAIPUR BENCH OF THE T RIBUNAL IN THE CASE OF SHEETAL ANUSANDHAN VS. JCIT IN ITA NO. 146 AND 1 47/RPR/2014 IN WHICH THE DECISIONS OF THE HONBLE DELHI HIGH COURT IN THE CASE OF AZADI BACHAO ANDOLAN, 252 ITR 471 AND THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD VS . THE STATE OF ORISSA 83 ITR 26 WERE FOLLOWED. FURTHER IT IS SUBMI TTED THAT THE LD. CIT(A) IN THE CASE OF M/S BHAGWAN PARSHURAM SIKSHA SAMITI IN APPEAL NO. 169/2012-13 BY ORDER DATED 21/8/2018 ACCEPTED T HE VERY SAME CAUSE AND DELETED THE PENALTY. LD. DR PLACE HEAVY R ELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF THE SUBMISSIONS MADE ON EITHER SIDE. ACCORDING TO THE A SSESSEE, THE TOTAL RECEIPTS FOR THE ASSESSMENT YEARS 2014-15 AND 2015- 16 WERE LESS THAN RUPEES ONE CRORE AND THEREFORE, THE SOCIETY WA S EXEMPT UNDER SECTION 10 (23C) (IIIAD) OF THE ACT; THAT AFTER CLA IMING EXEMPTION UNDER SECTION 10 (23C) (IIIAD) OF THE ACT, THE INCO ME OF THE ASSESSEE WAS NIL; AND IN THE CIRCUMSTANCES THE BONA FIDE BELIEF OF THE ASSESSEE WAS THAT THEY NEED NOT TO FILE THE RETURN OF INCOME . 6. ON A PERUSAL OF THE ORDER DATED 21/8/2018 IN APP EAL NO. 169/2012-13, LD. CIT(A) ACCEPTED THIS VERY REASON C ONSTITUTING SUFFICIENT CAUSE AND DELETED THE PENALTY IN THE IDE NTICAL FACTS IN THE CASE OF SEETAL ANUSANDHAN (SUPRA) AND BY ORDER DATE D 15/1/2018, THE RAIPUR BENCH OF THE TRIBUNAL HELD THAT, IN THE ABSENCE OF ANY 4 ATTRIBUTABLE MOTIVE TO STAND TO GAIN, THE BONA FIDE BELIEF CONSTITUTES SUFFICIENT CAUSE. WE FEEL IT RELEVANT TO EXTRACT TH E OBSERVATIONS OF THE TRIBUNAL, WHICH RUN AS FOLLOWS: 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. PENA LTY 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) R WS 139(1) OF THE ACT. IN THE PRESENT CASE, THERE WAS NO DELIBERATENESS IN NOT FILING THE RETURN OF INCOME WITHIN THE PRESCRIBED TIME LIMIT. THE ASS ESSEE SOCIETY WAS UNDER A BONAFIDE BELIEF THAT SINCE THE INCOME OF TH E SOCIETY IS EXEMPT, IT IS NOT REQUIRED TO FILE INCOME TAX RETURN. HOWEVER, WHEN IT CAME TO THE KNOWLEDGE OF THE ASSESSEE SOCIETY THAT IT IS REQUIR ED TO FILE INCOME TAX RETURN, IMMEDIATELY, THE SOCIETY FILED THE SAME. PE NALTY CANNOT BE LEVIED UNDER SECTION 272A(2)(E) IF THERE EXISTS SUFFICIENT OR REASONABLE CAUSE FOR THE DEFAULT. THE MEANING OF THE TERM 'REASONABLE CA USE' AS ENUNCIATED BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF AZAD I BACHAO ANDOLAN V UNION OF INDIA 252 ITR 471 READS AS FOLLOWS:- 'REASONABLE CAUSE CAN BE REASONABLY SAID TO BE A CA USE WHICH PREVENTS A MAN OF AVERAGE INTELLIGENCE AND ORDINARY PRUDENCE, ACTING UNDER NORMAL CIRCUMSTANCES, WITHOUT NEGLIGEN CE OR INACTION OR WANT OF BONA FIDES'. 5. THE HON'BLE SUPREME COURT IN THE CASE OF HINDUST AN 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 PROCEE DING, AND PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBL IGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST, OR ACTED IN CONSCIOUS DI SREGARD TO ITS OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCR ETION OF THE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON A CONSI DERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENAL TY IS PRESCRIBED, THE AUTHORITY COMPETENT TO IMPOSE THE P ENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISION OF THE ACT OR WHERE THE BREACH FLOWS FROM A BONA FIDE BELIEF THAT THE OFFENDER IS NOT LI ABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE'. 5 6. IN THE PRESENT CASE, THE ASSESSEE WAS UNDER A BO NAFIDE IMPRESSION/BELIEF FOR NOT FILING THE RETURN OF INCO ME. THE ASSESSEE DID NOT ACT DISHONESTLY OR NEGLIGENTLY. THE DELAY IN FILING THE RETURN 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 FILING OF THE RETURNS, THERE WAS NO LOSS OF REVENUE TO THE GOVERNMENT. THE ASSESSEE HAD NO ULTERIOR MOTIVE TO DEFRAUD THE REVENUE AND HAD NOT ACTED DISHONESTLY OR NEGLIGENTLY. THEREFORE, THERE WAS SUFFICIENT/ REASO NABLE CAUSE FOR THE DELAY IN FURNISHING THE RETURN OF INCOME. 7. IN VIEW OF THE ABOVE, WE ARE OF THE VIEW THAT TH E ASSESSEE SOCIETY IS NOT LIABLE FOR PENALTY UNDER SECTION 272A(2)(E) OF THE ACT FOR DELAY IN FILING THE RETURNS OF INCOME. THEREFORE, WE CANCEL THE PENALTY IMPOSED BY THE ASSESSING OFFICER FOR BOTH THE YEARS UNDER CONS IDERATION. 7. SINCE THE FACTS ARE SIMILAR IN BOTH IN THE CASE OF SHEETAL ANUSANDHAN (SUPRA) AND ALSO M/S BHAGWAN PARSHURAM ( SUPRA), WE ARE OF THE OPINION THAT A SIMILAR VIEW COULD BE FOL LOWED IN THIS MATTER ALSO, BECAUSE NO COMPELLING CIRCUMSTANCES ARE BROUG HT TO OUR NOTICE TO TAKE A DIFFERENT VIEW. WE ACCORDINGLY, ACCEPT TH E EXPLANATION OF THE ASSESSEE AS CONSTITUTING SUFFICIENT CAUSE AND H OLD THAT THE PENALTY CANNOT BE SUSTAINED. PENALTY IS ACCORDINGLY , DIRECTED TO BE DELETED. 8. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOW ED. PRONOUNCED IN OPEN COURT ON THIS THE 30 TH DAY OF SEPTEMBER, 2021 IMMEDIATELY ON CONCLUSION OF HEARING OVER VIRT UAL MODE. SD/- SD/- (ANIL CHATURVEDI) (K. NARSIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBE R DATED: 30/09/2021 AKS