SHREE DEO VYADESHWAR DEOSTHAN FUND,GUHAGAR, RATNAGIRI vs. INCOME TAX OFFICER, EXEMPTION WARD, KOLHAPUR, KOLHAPUR

PER ASTHA CHANDRA, J.M.:

The appeal filed by the assessee is directed against the order dated 12-01-2026 of the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi [“CIT(A)/NFAC”], u/s. 250 of the Income Tax Act, 1961 (the “Act”), pertaining to Assessment Year (“AY”) 2012-13, whereby he has confirmed the penalty of Rs. 2,44,177/- levied by the Ld. Assessing Officer (“AO”) u/s. 271(1)(c) of the Act.

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“4.2 Decision of merit: 4.2.1 While non-compliance may be reason enough to dismiss the appeal, I think it would be appropriated to decide the case on its merit for the sake of justice. The appellant has raised multiple grounds of appeal against the action of the assessing officer (hereinafter referred as the AO) as reproduced in 2.1 above and other ground is consequential in nature, without submitting any evidence or counter arguments in support of his claims. 4.2.2 I have gone through the facts of the case, perused the Penalty Order u/s. 271(1)(c) of the Income Tax Act, 1961, (In short, "the Act") dated 15.9.2021 passed by the NaFAC (hereinafter referred as "the AO") for the AY 2012-13 in absence of any written submission filed by the appellant. 4.2.3 It is observed from the impugned penalty order that the appellant failed to comply with the notice/show cause issued during penalty proceedings, as detailed in the impugned order. Therefore, Id AO after being satisfied that the appellant indeed concealed particulars of income by not declaring the income of Rs.12,83,546/- till notice u/s 148 of the act was issued, imposed penalty of Rs. 2,44,177/-being 100% of the tax sought to be evaded. The appellant's first ground that they were not provided an opportunity of being heard does not hold good as they were given ample opportunities of being heard as detailed in the impugned penalty order. 4.2.4 During the course of appellate proceeding, the appellant did not bring any material to substantiate the ground so taken against the finding of the Ld. AO. The appellant has challenged the imposition of penalty u/s 271(1)(c) of the Act of Rs. 2,44,177/- without submitting any evidence or counterarguments in support of his claims during the appellate proceedings. The appellant while filing the appeal in their SoF submitted that the trust is a religious one and involved exclusively in the temple of Shiva called Vyadeshwar Devasthan Trust. But they don't have registration u/s 12A and hence could not claim exemption in respect of the income. However, the appellant relied upon the ITAT, Pune bench in the case of Emilio Ruiz Berdejo in ITA No.991/PN/08 and claimed that no penalty is leviable in respect of income offered in return in response to notice u/s 148 of the Act if the income remained to be offered in the original return. In the present case the appellant did not file any return of 4 income and it was only after the issuance of notice u/s 148 of the Act, as per information of escapement of income, the appellant declared the income at Rs.12,83,546/- which was accepted by the Id AO. Thus, the case law relied upon by the appellant is distinguishable on the fact and circumstance of the case. In the present case the appellant was also unable to provide either before the ld AO or before me a 'bona fide' explanation or there were any errors made by them under bona fide' beliefs. Thus, I do not find any merit in the said submission and accordingly confirm the penalty of u/s 271(1)(c) of the Act of Rs. 2,44,177/-. The grounds so taken on the issue are, thus, dismissed.

“1. On the facts and circumstances of the case and in law the CIT(A) erred in confirming the action of the ITO of levying penalty under section 271(1)(c) on the returned income of the appellant fund. The appellant submits that the AO having accepted the income as per the return of income filed by the appellant, the issue of concealment of income in its case does not arise. The levy of penalty is thus incorrect. The appellant therefore prays that the ITO be directed to delete the penalty. The appellant craves leave to add to, amend, alter, modify, delete or add a new ground of appeal before or at the time of hearing.”

5 2012-13 and the assessee filed its return of income in response to the notice issued u/s. 148 of the Act, declaring income of Rs. 12,83,546/-, after claiming exemption u/s. 11 of the Act. The Ld.AO completed the assessment u/s. 143(3) r.w.s. 147 of the Act at the assessed income of Rs. 12,83,550/- thereby accepting the income returned by the assessee. Thereafter, the Ld.AO proceeded to initiate penalty proceedings and imposed penalty of Rs. 2,44,177/- on the assessee u/s. 271(1)(c) of the Act for concealment of particulars of income for AY. 2012-13 on account of assessee‟s failure to furnish any reply during the penalty proceedings. We find that the Ld.CIT(A)/NFAC did not find any merit in the submissions furnished by the assessee due to lack of any bonafide explanation corroborated with supporting evidence filed by the assessee during appellate proceedings before him as well as before the Ld.AO. He, therefore, confirmed the penalty imposed by the Ld.AO for the reasons which we have already reproduced in the preceding paragraphs. It is the contention of the Ld.Counsel for the assessee that there was no malafide intention on the part of the assessee for avoidance of payment of taxes. The assessee is an ancient temple, engaged in religious activities and now also holds a valid certificate of registration u/s. 12A of the Act, dt. 21-04- 2016 issued by the Ld.CIT(E), Pune. In its return of income filed in response to notice u/s. 148 of the Act, the assessee declared income of Rs. 12,83,546/- for AY. 2012-13, which has been accepted by the Ld.AO and, therefore, the Ld.AR has contended that there is no concealment of income on the part of the assessee. We, however, observe that the Ld.AO has passed an ex-parte order qua the assessee. Before the Ld.CIT(A)/NFAC also, the assessee failed to comply with the various notices issued by his office. Although the Ld.CIT(A)/NFAC has proceeded to deal with the impugned issue on merits, he has confirmed the penalty imposed by the Ld.AO due to lack of any bonafide explanation/corroborate evidence filed

6 by the assessee in support of its claim. Thus, considering the totality of facts and in the circumstances of the case, we deem it fit to set aside the order of the Ld.CIT(A)/NFAC and restore the issue back to his file to decide the same afresh on merits and as per fact and law, after providing reasonable opportunity of hearing to the parties. Needless to say, the assessee shall provide the requisite support in terms of submitting the relevant documents/evidence as may be required/called upon on the appointed date, without seeking any adjournment, unless required for a sufficient cause, failing which the Ld.CIT(A)/NFAC shall be at liberty to pass the appropriate order in accordance with law. We hold and direct accordingly. The grounds of appeal raised by the assessee are accordingly allowed for statistical purposes.

Order pronounced in the open Court on 10-08-2026 (RAMA KANTA PANDA) (ASTHA CHANDRA) VICE PRESIDENT JUDICIAL MEMBER Tadepalli Naga पुणे/Pune; Murali Mohan Murali Mohan दिन ांक/Dated : 10-08-2026 Date: 2026.08.11 11:14:51 +05'30' TNMM

आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent