BHARTIYA SHIKSHA PRACHAR SAMITI TONK,TONK vs. CIRCLE(EXEMP.), JAIPUR, JAIPUR

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ITA 564/JPR/2026Status: DisposedITAT Jaipur27 October 2026AY 2015-167 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the penalty levied under Section 271B of the Income Tax Act, 1961, is not sustainable. The Tribunal relied on the finding of the Coordinate Bench in the assessee's own case for AY 2012-13, which held that each institution run by the assessee society is required to be separately assessed, and the assessee is entitled to exemption under Section 10(23C)(iiiad) of the Act. Since the assessee's income was held to be exempt, it was not liable to get its accounts audited under Section 44AB, and consequently, the penalty under Section 271B was deleted. Regarding the penalty under Section 271F, the Tribunal held that when the assessee's income is exempt under Section 10(23C)(iiiad) of the Act, it was not required to file a return of income. Therefore, the penalty levied under Section 271F was also not sustainable and ordered to be deleted. Both appeals were allowed.

What were the facts?

The assessee, Bhartiya Shiksha Prachar Samiti Tonk, filed two appeals (ITA No. 564 & 569/JPR/2026) before the Income Tax Appellate Tribunal (ITAT), Jaipur Bench, challenging the orders dated 14.10.2025 passed by the National Faceless Appeal Centre (NFAC), Delhi (CIT(A)). The appeals pertained to assessment year 2015-16 and challenged the levy of penalties under Section 271F and Section 271B of the Income Tax Act, 1961. The appeals were filed with a delay of 71 days, which the assessee sought to condone due to notices being sent to an incorrect email address. The Revenue contended that the assessee was not entitled to concession for condonation of delay as information was available on the Income Tax Portal. The ITAT condoned the delay, citing sufficient cause.

What were the issues?

1. Whether the penalty of Rs. 5,000/- levied under Section 271F of the Income Tax Act, 1961, for not filing the return of income is sustainable, considering the assessee's claim of exemption under Section 10(23C)(iiiad) or Section 11 of the Act? (Question of law) 2. Whether the penalty of Rs. 1,50,000/- levied under Section 271B of the Income Tax Act, 1961, for not conducting an audit under Section 44AB is sustainable, considering the assessee's claim of exemption under Section 10(23C)(iiiad) of the Act and the ruling of the Coordinate Bench in the assessee's own case for AY 2012-13? (Question of mixed law and fact) Assessee's Contentions: - For the penalty under Section 271B, the assessee argued that it is an educational society imparting education, and its income is exempt under Section 10(23C)(iiiad) as the receipts of each institution are less than Rs. 1,00,00,000/-. It also relied on its registration under Section 12 and a coordinate bench ruling for AY 2012-13. The assessee contended it was not required to get its accounts audited under Section 44AB. - For the penalty under Section 271F, the assessee argued that it was not required to file a return of income if its income was exempt under Section 10(23C)(iiiad). Revenue's Contentions: - The Revenue contended that the assessee was not entitled to condonation of delay as all information was available on the Income Tax Portal.

Which sections of the Income-tax Act were involved?

Section 271F,Section 271B,Section 44AB,Section 139,Section 148,Section 147,Section 11,Section 12

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR “A” BENCH, JAIPUR

Before: SMT. ANNAPURNA GUPTA & SHRI KULDIP SINGH

IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR “A” BENCH, JAIPUR (PHYSICAL HEARING) BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER & SHRI KULDIP SINGH, JUDICIAL MEMBER ITA No: 564 & 569/JPR/2026 Assessment year 2015-16

Bhartiya Shiksha Prachar Circle Samiti Tonk (Exemption), Vs Sarswati Vidhya Mandir Jaipur. (Respondent) Parisar Yag Ke Balaji, Tonk. PAN: AAAAB7653D (Appellant)

Assessee Represented: Sh. P.C. Parwal, C.A. Revenue Represented: Sh. Abhimanyu Singh Yadav, Addl.CIT Date of hearing : 13-10-2026 Date of pronouncement : 27-10-2026 ORDER PER : KULDIP SINGH, JUDICIAL MEMBER:-

The Appellant, Bhartiya Shiksha Prachar Samiti Tonk by filing aforesaid interconnected appeals, sought to set aside the impugned orders both dated 14.10.2025 passed by the National Faceless Appeal Centre )NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’] qua the assessment year 2015-16 on the ground that:- ITA No.564/JPR/2026

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“ 1The Ld. CIT(A), NFAC has erred on facts and in law in confirming the levy of penalty of Rs. 5,000/- u/s 271F of the IT Act, 1961. 2. The appellant crave to alter, amend & modify any ground of appeal. 3. Necessary cost be awarded to the assessee.” ITA No. 569/JPR/2026 “1. The Ld. CIT(A), NFAC has erred on facts and in law in confirming the levy of penalty of Rs. 1,50,000/- u/s 271B of the IT Act, 1961 for not conducting the audit u/s 44AB of Act ignoring that assessee is an educational society not carrying out any business or profession and thus not required to get its accounts audited u/s 44AB of the Act and even the Hon’ble ITAT in assessee’s own case for AY. 2012-13 has deleted the levy of penalty. 2. The appellant crave to alter, amend & modify any ground of appeal. 3. Necessary cost be awarded to the assessee.” ITA No. 564/JPR/2026 2. Briefly stated, facts necessary for consideration and adjudication of the issues at hand are : The Assessing Officer has initiated the penalty proceedings u/s 271F of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) for not filing the return of income by the assessee samiti u/s 139 of the Act. Declining the contention raised by the assessee and the facts that the assessee has not been found eligible to claim exemption u/s 11 and 12 of the Act, for the year under consideration the Assessing Officer levied the penalty to the tune of Rs. 5,000/- u/s 271F of the Act. ITA No. 569/JPR/2026

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3.

The Assessing Officer initiated the penalty proceedings u/s 271B of the Act for not getting its accounts audited as required u/s 44AB of the Act. Declining the contention raised by the assessee and the facts that the assessee was not found eligible for claiming exemption u/s 11 and 12 of the Act, for the year under consideration levied penalty to the tune of Rs. 3,52,861/- (0.5% of Rs. 7,05,72,298/-) as per return of income of the assessee, which is above Rs. 1,50,000/- and accordingly levied the penalty to the tune of Rs. 1,50,000/- u/s 271B of the Act. 4. It is brought on record by the registry as well as Ld. AR for the assessee that the present appeals are barred by limitation with delay of 71 days each and sought to condone the same by moving an application on the ground that in Form No. 35 email ID on which communication was required to be sent to the assessee was bspstonk14@gmail.com. However Ld. CIT(A) has issued one notice on 08.10.2025 at e-mail ID sljtonk12@gmail.com, which belongs to assessee’s earlier counsel and that when the earlier counsel communicated the notice to the assessee, present appeals were filed.

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5.

Ld. DR for the Revenue however contended that when the entire information was available at Income Tax Portal, the assessee is not entitled for any concession for condonation of delay. 6. We have perused Form 35 wherein e-mail address for communication of notices are recorded as bspstonk14@gmail.com, however from the record it is proved that notices were sent on e-mail ID sljtonk12@gmail.com. When the assessee has not received the notices having been sent on wrong e-mail ID, it is a “sufficient cause” to condone the delay of 71 days, in view of law laid down by Hon’ble Supreme Court in case of Collector, Land Acquisition vs Mst Katiji and Others (167 ITR 471 (SC). So the delay of 71 days is condoned in both the appeals, which are being heard on merits. 7. Being aggrieved with the impugned orders passed by the Ld. CIT(A), assessee has come up before the Tribunal by way of filing the present appeals. 8. We have heard Ld. ARs for the assessee and Ld. DR for the Revenue and perused the record available on file. 9. Ld. AR for the assessee challenging the levy of penalty by the AO u/s 271B of the Act for not getting his accounts audited u/s 44AB and confirmed by the Ld. CIT(A) contended that the assessee

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being a society registered under Society Registration Act, 1958 is in to imparting education, having receipt of each educational institution less than Rs. 1,00,00,000/- and as such its income is exempt u/s 10(23C)(iiiad) of the Act. It is further contended that the assessee is not filing the return of income, but in response to notice u/s 148 of the Act, it has filed the return of income declaring Nil income by claiming exemption u/s 11 of the Act. The assessee brought on record registration granted u/s 12 of the Act available at page 5 to 9 of the paper book. 10. We have perused the impugned orders of registration granted by the Ld. CIT(E) dated 20.12.2019. We have also perused the order passed by the Coordinate Bench of Tribunal dated 21.02.2025 in ITA Nos. 1094 &1095/JPR/2024 in case of Bhartiya Shiksha Prachar Samiti Tonk vs. Circle (Exemp.) passed in assessee’s case whereby it is held that when a trust is running numerous institutions under the aegis of assessee society every institution is required to be separately assessed by applying threshold limit of annual receipt of Rs. 1 Cr. and as such assessee is entitled for exemption u/s 10(23C)(iiiad) of the Act.

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11.

However perusal of the penalty order passed by the Ld. CIT(A) goes to prove that he has assessed turnover of the assessee at Rs. 7,05,72,298/- which exceeds Rs. 1 Cr. 12. We are of the considered view that when the income of the assessee is exempted u/s 10(23C)(iiiad) of the Act as per findings returned by the Coordinate Bench of Tribunal in case of Bhartiya Shiksha Prachar Samiti Tonk (supra) it is not liable to get its account audited. Consequently penalty levied by the AO u/s 271B confirmed by the Ld. CIT(A) is not sustainable, hence ordered to be deleted. 13. So far as penalty levied by the AO in ITA No. 564/JPR/2026 in A.Y. 2015-16 u/s 271F of the Act is concerned, no doubt the assessee has not filed the return of income u/s 139(4A) of the Act, but at the same time the assessee filed the return of income at Nil after claiming exemption u/s 11 of the Act, in response to notice issued u/s 148 of the Act, but assessment u/s 147 of the Act was framed by not allowing the exemption u/s 10(23C)(iiiad)/ section 11 of the Act. When we examine these facts in the light of the order passed by the Coordinate Bench of Tribunal dated 21.02.2025 (supra) assessee’s claim was allowed u/s 10(23C)(iiiad) of the Act.

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We are of the considered view that when the assessee’s income is held to be exempted u/s 10(23C)(iiiad) of the Act, the assessee was not required to file the return of income, hence penalty levied by the AO and confirmed by the Ld. CIT(A) is not sustainable in the eyes of law, hence ordered to be deleted. 14. Resultantly, both the aforesaid appeals filed by the assessee are allowed. Order pronounced in the open court on 27-10-2026.

Sd/- Sd/- (ANNAPURNA GUPTA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Jaipur Dated:- 27/10/2026. *Santosh. Copy of the order forwarded to: 1. The Appellant- 2. The Respondent- 3. CIT 4. CIT(A) 5. DR, ITAT, Jaipur. 6. Guard File By order, Asst. Registrar/Sr. P.S. Digitally signed by SANTOSH SANTOSH KUMAR MAURYA KUMAR MAURYA Date: 2026.10.28 10:04:50 +05'30'

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