M/s. Shree Vasupujya Swami Shwetamber Jain Sangh, Mangaluru V. Joint Commissioner of Income Tax, Range-Exemptions, Hubli-Dharwad

ITA 818/BANG/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7615 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 16-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bonafide belief
• Section: 12A; 12; 10; 11; 139

Judgement Text

ITA.818 TO 821/BANG/2018 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU BENCH 'C', BENGALURU BEFORE SHRI. INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI. LALIET KUMAR, JUDICIAL MEMBER I.T.A NOS.818 TO 821/BANG/2018 (ASSESSMENT YEARS : 2012-13 TO 2015-16) M/S. SHREE VASUPUJYA SWAMI SHWETAMBER JAIN SANGH, NO.11-12-1283, TRISHULESHWARA TEMPLE ROAD, MANGALURU 575 001 .. APPELLANT PAN : AALTS0237J V. JOINT COMMISSIONER OF INCOME-TAX, EXEMPTIONS RANGE, HUBBALLI .. RESPONDENT ASSESSEEE BY : SHRI. SANKETH NAYAK, CA REVENUE BY : DR. P. V. PRADEEP KUMAR, ADDL. CIT HEARD ON : 27.06.2018 PRONOUNCED ON : 20.07.2018 O R D E R PER BENCH : THE PRESENT APPEALS ARE FILED BY THE ASSESSEEE, AG AINST THE SEPARATE ORDERS OF THE CIT (A))-10, BENGALURU, ALL DT.28.12.2017, FOR THE ASSESSMENT YEARS 2012-13 TO 2015-16, WHEREIN TH E ASSESSEE HAS RAISED THE FOLLOWING GROUNDS WHICH ARE COMMON TO AL L THE FOUR YEARS : ITA.818 TO 821/BANG/2018 PAGE - 2 02. THE ASSESSEE TRUST IS REGISTERED U/S.12A OF THE IT ACT, BY THE CIT (EXEMPTIONS), VIDE ORDER DT.25.07.2016, WITH TH E OBJECTIVE OF PROMOTING AND PROPAGATING JAIN PHILOSOPHY, ON THE M URTHY PUJAK SAMPRADAY AND PARAMPARA, ETC., THE ASSESSEE TRUST IS NOT A PROFIT TRUST AND DOES NOT CARRY OUT ANY BUSINESS ACTIVITY. THE ASSESSEE FILED THE RETURN OF INCOME FOR AY 2012-13 ON 14.09. 2016 AFTER THE REGISTRATION OF THE TRUST, WHEREAS THE DUE DATE FOR FILING THE RETURN ITA.818 TO 821/BANG/2018 PAGE - 3 WAS 30.9.2012 AND THUS THERE WAS A DELAY OF 1444 DA YS IN FILING THE RETURN OF INCOME. AS THERE WAS A DELAY IN FILING T HE RETURN OF INCOME, SHOW-CAUSE NOTICE WAS ISSUED ON 19.12.2016 BY THE AO. AFTER RECEIPT OF THE SHOW-CAUSE NOTICE, THE ASSESSE E FILED REPLY ON 23.12.2016, WHEREIN THE ASSESSEE HAD SUBMITTED THAT THE ASSESSEE GOT THE CERTIFICATE OF REGISTRATION ONLY ON 25.07.2 016. IMMEDIATELY THEREAFTER THE RETURN OF INCOME WAS FILED BY THE TR UST ON 14.09.2016 FOR THE LAST FOUR YEARS. FURTHER IT WAS SUBMITTED IN ITS REPLY THAT DONATION INCOME AND RECEIPTS BY THE TRUST WERE UTIL ISED FOR CHARITABLE AND RELIGIOUS PURPOSES. THEREFORE IT WA S REQUESTED THAT PENALTY U/S.272A(2)(E) NEED NOT BE IMPOSED. THE AO WITHOUT CONSIDERING THE REPLY FILED BY THE ASSESSEE, HAD PR OCEEDED TO DECIDE THE MATTER BY IMPOSING THE PENALTY FOR THE FOUR YEA RS AS UNDER : A. Y 2012-13 RS.1,44,400 A. Y 2013-14 RS.1,07,040 A. Y 2014-15 RS.70,900 A. Y 2015-16 RS.34,400 FEELING AGGRIEVED BY THE PENALTY IMPOSED BY THE AO, THE ASSESSEE PREFERRED APPEALS BEFORE THE CIT (A) AND THE ASSESS EE RELIED UPON THE DECISION RENDERED IN THE MATTER OF ANCHAL CHARI TABLE TRUST V. ADDL. DIRECTOR OF INCOME TAX (EX) [ITA.4863 & 4864/ DEL/2009, IT WAS SUBMITTED THAT ON ACCOUNT OF WRONG UNDERSTANDIN G OF THE PROVISIONS OF LAW THE ASSESSEE HAD NOT FILED THE RE TURN OF INCOME. FURTHER IT WAS SUBMITTED THAT THERE WAS NO LOSS OF REVENUE TO THE DEPARTMENT AS THE TOTAL INCOME WAS NIL. HOWEVER TH E CIT (A) WAS NOT IMPRESSED WITH THE EXPLANATION GIVEN BY THE ASS ESSEE AND IN ITA.818 TO 821/BANG/2018 PAGE - 4 VIEW THEREOF, DISMISSED THE APPEAL OF THE ASSESSEE RELYING UPON THE DECISION OF THE BOMBAY HIGH COURT IN THE MATTER OF MALNAD JAIN YUVAK MANDAL MEDICAL RELIEF CENTRE [(2001)250 ITR 488]. FEELING AGGRIEVED BY THE ORDER PASSED BY THE CIT (A ), PRESENT APPEALS ARE FILED BY THE ASSESSEE BEFORE US FOR ALL THE FOUR ASSESSMENT YEARS. 03. BEFORE US THE LD. AR SUBMITTED THAT THE TRUST W AS REGISTERED ON 3.11.2011 AND THEREAFTER12A REGISTRATION WAS GRA NTED BY THE CIT (EX) ON 25.07.2016 AND THEREAFTER THE RETURN OF INC OME WAS FILED ON 14.9.2016. THEREFORE NO NEED TO FILE THE RETURN FO R AY 2012-13 BY 30.12.2012 AS THE TRUST WAS NOT REGISTERED BY THE C IT (EX). HENCE THE RETURN OF INCOME WAS NOT FILED AND THERE WAS A BONAFIDE BELIEF ON THE PART OF THE ASSESSEE THAT THE ASSESSEE IS NO T REQUIRED TO FILE THE RETURN OF INCOME, IF THE INCOME OF THE ASSESSEE IS BELOW THE TAXABLE LIMIT. THE LD. AR RELIED UPON THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE MATTER OF HTSL COMMUNITY SE RVICE TRUST V. JCIT [20 TAXMANN.COM 4 (BANG)] 04 PER CONTRA, THE LD. DR SUBMITTED THAT THE PROVIS ION OF SECTION 271A(2)(E) CLEARLY PROVIDES IMPOSITION OF PENALTY F OR FAILURE ON THE PART OF THE ASSESSEE TO FILE THE RETURN OF INCOME A ND THEREFORE THE ACTION ON THE PART OF THE LOWER AUTHORITIES WAS IN ACCORDANCE WITH LAW. HE ALSO SUBMITTED THAT THE JUDGMENT RELIED UP ON BY THE LD. AR IN HTSL COMMUNITY SERVICE TRUST (SUPRA) IS NOT APPLICABLE AND ON THE CONTRARY THE JUDGMENT REFERRED BY THE CI T (A) IN THE MATTER OF MALNAD JAIN YUVAK MANDAL MEICAL RELIEF CE NTRE (SUPRA) IS APPLICABLE. ITA.818 TO 821/BANG/2018 PAGE - 5 05. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. BEFORE WE DEAL WITH THE FACTS, IT IS NE CESSARY TO REPRODUCE THE RELEVANT PROVISION OF THE STATUTE U/S .271A(2)(E), WHICH READS AS UNDER : 272A(2) IF ANY PERSON FAILS : (E) TO FURNISH THE RETURN OF INCOME WHICH HE IS REQ UIRED TO FURNISH UNDER SUB-SECTION (4A) OR SUB-SECTION (4C) OF SECTION 139 OR TO FURNISH IT WITHIN THE TIME ALLOWED AND IN THE MANNER REQUIRED UNDER THOSE SUB-SECTIONS; 139(4A) PROVIDES AS UNDER : (4A) EVERY PERSON IN RECEIPT OF INCOME DERIVED FROM PROPERTY HELD UNDER TRUST OR OTHER LEGAL OBLIGATION WHOLLY F OR CHARITABLE OR RELIGIOUS PURPOSES OR IN PART ONLY FOR SUCH PURP OSES, OR OF INCOME BEING VOLUNTARY CONTRIBUTIONS REFERRED TO IN SUB-CLAUSE (IIA) OF CLAUSE (24) OF SECTION 2, SHALL, IF THE TO TAL INCOME IN RESPECT OF WHICH HE IS ASSESSABLE AS A REPRESENTATI VE ASSESSEE (THE TOTAL INCOME FOR THIS PURPOSE BEING COMPUTED U NDER THIS ACT WITHOUT GIVING EFFECT TO THE PROVISIONS OF SECT IONS 11 AND 12) EXCEEDS THE MAXIMUM AMOUNT WHICH IS NOT CHARGEA BLE TO INCOME-TAX FURNISH A RETURN OF SUCH INCOME OF THE P REVIOUS YEAR IN THE PRESCRIBED FORM AND VERIFIED IN THE PRE SCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND ALL THE PROVISIONS OF THIS ACT SHALL , SO FAR AS MAY BE, APPLY AS IF IT WERE A RETURN REQUIRED TO BE FURNISHED UNDER SUB-SECTION (1). FROM THE CONJOINT READING OF THE ABOVE TWO PROVISIO NS IT IS CLEAR THAT IF THE TOTAL INCOME OF THE SOCIETY / TRUST EXC EEDS THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME-TAX, IN TH AT EVENTUALITY SUCH ASSESSEE IS REQUIRED TO FURNISH SUCH RETURN OF INCOME FOR THE PREVIOUS YEAR IN THE PRESCRIBED FORM AND VERIFY IN THE PRESCRIBED MANNER SETTING FORTH OTHER PARTICULARS AS MAY BE PR ESCRIBED. IN VIEW ITA.818 TO 821/BANG/2018 PAGE - 6 OF THE ABOVE, IF WE EXAMINE FACTS OF PRESENT CASE , THAN WE HAVE TO FIND OUT WHETHER THE TOTAL INCOME OF THE ASSESSEE E XCEEDS THE MAXIMUM LIMIT WHICH IS NOT CHARGEABLE TO TAX OR NOT IN ALL APPEALS BEFORE US OR NOT ? . FOR AY 2012-13, THE INCOME AS ON THE YEAR ENDING 31.03.2012 WAS RS.32,931/-, FOR AY 2013-14, IT WAS 1,21,770/-, FOR AY 2014-15 IT WAS 90,554/- AND FOR AY 2015-16 IT WAS RS.1,18,575/-. 06. AS PER PART-III TO THE FINANCE ACT FOR AY 2012 -13, PARA A, THE RATES OF INCOME-TAX IN THE CASE OF EVERY INDIVI DUAL OR HUF OR AOP OR BOI WHETHER INCORPORATED OR NOT OR EVERY ART IFICIAL JURIDICAL PERSON REFERRED TO IN S.7 OF CLAUSES 31 OF SECTION 2 OF IT ACT, UP TO RS.2 LAKHS WAS NIL. 07. THEREFORE FOR AY 2013-14 RELEVANT TO FY 2012-13 FOR AN ASSESSEE LIKE THE PRESENT, FELL WELL BELOW THE TAXA BLE LIMIT. AS MENTIONED HEREINABOVE, THE INCOME OF THE ASSESSEE T RUST FOR ALL THE RELEVANT FOUR FINANCIAL YEARS WAS LESS THAN RS.2 LA KHS AND THEREFORE THE ASSESSEE TRUST DO NOT FALL WITHIN THE AMBIT OF SECTION 139(4A) OF THE ACT AND THEREFORE THE ASSESSEE IS NOT REQUIRED TO FILE THE RETURN OF INCOME. AS THE ASSESSEE WAS NOT REQUIRED TO FILE T HE RETURN OF INCOME AS STIPULATED U/S.139(4A), THEREFORE THE PRO VISIONS OF SECTION 272A(2)(E) ARE NOT APPLICABLE. HENCE THE IMPOSITIO N OF PENALTY BY THE LOWER AUTHORITIES IS WITHOUT ANY MERIT. FURTHE R WE ARE OF THE OPINION THAT ASSESSEE WAS GRANTED THE REGISTRATION BY THE CIT (EX) U/S.12A OF THE ACT, ONLY IN 2016. THEREFORE ALSO W E ARE OF THE OPINION THAT THE CONTENTION PUT FORWARD BY THE ASSE SSEE THAT IT HAS A ITA.818 TO 821/BANG/2018 PAGE - 7 BONAFIDE BELIEF NOT TO FILE THE RETURN OF INCOME PR IOR TO REGISTRATION WAS A PLAUSIBLE EXPLANATION. FURTHER THE DECISION RELIED UPON IN THE MATTER OF MALAD JAIN YUVAK MANDAL MEDICAL RELIEF CENTRE, BY THE CIT (A) WHILE DISMISSING THE APPEAL OF THE ASSESSEE, IS IN FACT IN FAVOUR OF THE ASSESSEE WHICH IS CLEAR FROM THE FOLLOWING PARAGRAPHS : 6. IN THE PRESENT MATTER, IT IS NOT IN DISPUTE THAT T HE INCOME OF THE ASSESSEES IS EXEMPT UNDER SECTION 10(22) OF THE ACT. FURTHER, THE PRESENT MATTER IS IN RESPECT OF ASSESSMENT YEAR S 1991-1992 AND 1992-1993. UNDER SECTION 139(4A), EVERY PERSON IN RECEIPT OF INCOME DERIVED FROM PROPERTY HELD UNDER TRUST OR HELD UNDER SOME LEGAL OBLIGATION FOR CHARITABLE OR RELIGIOUS PURPOSES IS REQUIRED TO FURNISH A RETURN OF INCOME IF ITS TOTAL INCOME, IGNORING EXEMPTIONS UNDER SECTION 11 AND SECTION 12 OF THE ACT, EXCEEDS THE MAXIMUM AMOUNT NOT CHARGEABLE TO I NCOME TAX . IN OTHER WORDS, SECTION 139(4A) DEALS WITH FILING OF RETURNS BY CHARITABLE OR RELIGIOUS TRUST OR INSTITUTION, WH OSE INCOME WAS EXEMPT UNDER SECTION 11 AND SECTION 12 OF THE A CT. THE TRIBUNAL HAS COME TO THE CONCLUSION THAT SINCE THE INCOME OF THE ASSESSEE WAS EXEMPT UNDER SECTION 10(22) AND, S INCE, SECTION 10 IS NOT REFERRED TO IN SECTION 139(4A), A ND, SINCE, SECTION 11 AND SECTION 12 ALONE HAVE BEEN REFERRED TO IN THE SAID SECTION 139(4A), THE ASSESSEE - TRUST WAS NOT BOUND TO FILE THE RETURNS UNDER SECTION 139(4A). WE DO NOT AGREE WITH THE VIEW EXPRESSED BY THE TRIBUNAL. SECTION 139(4A) ENJ OINS UPON EVERY PERSON WHO IS IN RECEIPT OF INCOME DERIVED FR OM PROPERTY HELD UNDER TRUST FOR CHARITABLE OR RELIGIOUS PURPOS ES TO FILE A RETURN IF THE TOTAL INCOME IN RESPECT OF WHICH HE I S ASSESSABLE EXCEEDS THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME TAX. THE TOTAL INCOME FOR THIS PURPOSE IS TO BE COMPUTED WITHOUT GIVING EFFECT TO THE PROVISIONS OF SECTION 11 AND SECTION 12 OF THE ACT. ONCE THE CONCEPT OF TOTA L INCOME WHICH IS REQUIRED TO BE COMPUTED UNDER THE ACT IS K EPT IN MIND THEN, THE ASSESSEE WILL HAVE TO FILE A RETURN INDICATING THE MANNER IN WHICH HE HAS COMPUTED THE TOTAL INCOME. EVEN IF A TRUST OR AN INSTITUTION CLAIMS THAT ITS INCOME IS E XEMPT FROM TAX UNDER SECTION 11 AND SECTION 12 OF THE ACT, IT IS REQUIRED TO FILE A RETURN BECAUSE THE ASSESSEE'S CLAIM FOR EXEMPTION COULD BE DECIDED BY THE DEPARTMENT ONLY AFTER THE RELEVANT M ATERIAL IS ITA.818 TO 821/BANG/2018 PAGE - 8 PLACED BEFORE THE DEPARTMENT BY THE FILING OF THE A SSESSEE'S RETURN. THEREFORE, IF AN ASSESSEE WHO CLAIMS EXEMPT ION UNDER SECTION 11 AND SECTION 12 IS REQUIRED TO FILE THE R ETURN, AS STATED ABOVE, THEN WE DO NOT SEE ANY REASON AS TO WHY AN A SSESSEE WHO CLAIMS EXEMPTION OF INCOME UNDER SECTION 10(22) SHO ULD NOT FILE THE RETURN BECAUSE, ULTIMATELY, THE ASSESSEE'S CLAI M FOR EXEMPTION HAS TO BE DECIDED BY THE DEPARTMENT ONLY AFTER THE RELEVANT MATERIAL IS PLACED BEFORE IT BY FILING THE RETURNS. ....................... IN THE SAID CASE THE TOTAL INCOME OF THE ASSESSEE W ITHOUT GIVING EFFECT TO THE PROVISION OF SECTIONS 11 AND 12 OF TH E ACT WAS MORE THAN THE THRESHOLD LIMIT. HOWEVER IN THE PRESENT C ASE TOTAL INCOME OF THE ASSESSEE WITHOUT GIVING EFFECT OF THE PROVIS IONS OF SECTION 11 AND 12 OF THE ACT WAS LESS THAN THE THRESHOLD LIMIT AND THEREFORE THERE WAS NO OCCASION FOR APPLICATION OF THIS JUDGM ENT. IN VIEW OF THIS JUDGMENT NO PENALTY IS LEVIABLE AS THE ORDER P ASSED BY THE LOWER AUTHORITIES IS WITHOUT MERIT. 08. IN THIS REGARD, WE MAY PLACE RELIANCE ON THE JU DGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN CIT V. VIDYA S AGAR EDUCATIONAL TRUST [(2009) 315 ITR 298], WHEREIN THE HONBLE JURISDICTIONAL HIGH COURT ON IDENTICAL FACTS, WAS C ONSIDERING WHETHER THE ASSESSEE WAS REQUIRED TO FILE THE RETUR N OF INCOME OR NOT BEFORE 30.10.2001, THERE ALSO THE ASSESSEE WAS UN DER THE BONAFIDE IMPRESSION THAT THE ASSESSEE WAS NOT REQUIRED TO FI LE THE RETURN ON OR BEFORE 31.10.2001 AS IT HAD OBTAINED EXEMPTION U/S. 10(22) AND 10(22) OF THE ACT. IN THE PRESENT CASE, 12A WAS GR ANTED ON 25.07.2016, THEREFORE THE PLEA OF THE ASSESSEE IS A PLAUSIBLE ONE AND IS THEREFORE ENTITLED TO RELIEF. ITA.818 TO 821/BANG/2018 PAGE - 9 09. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH DAY OF JULY, 2018. SD/- SD/- (INTURI RAMA RAO) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBE R BENGALURU DATED : 20.07.2018 MCN* COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.