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Facts
The appellant, a charitable trust registered under section 12A, did not file a return of income under section 139(1) for AY 2014-15. A return was filed in response to a notice under section 148, and the assessment was completed at Nil income. Subsequently, the AO levied a penalty of Rs. 2,57,100/- under section 272A(2)(e) for non-filing of the return, which was confirmed by the CIT(A).
Held
The Tribunal held that filing a return of income is not mandatory in the absence of taxable income. Since the assessment, even after notice under section 148, resulted in Nil income, no prejudice was caused to the Revenue. Thus, the penalty levied under section 272A(2)(e) for non-filing of return under section 139(1) was not warranted and directed the AO to delete it.
Key Issues
Whether penalty u/s 272A(2)(e) can be levied for non-filing of return u/s 139(1) when the assessee had no taxable income, and the assessment completed under section 148 resulted in Nil income.
Sections Cited
12A, 139(1), 148, 147, 144B, 272A(2)(e)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM & SHRI ANIKESH BANERJEE, JM
O R D E R Per: Inturi Rama Rao, AM These appeals filed by the assessee are directed against the order of the National Faceless Appeal Centre, Delhi (NFAC) dated 16.07.2025 for Assessment Years (AY) 2014-15 & 2015-16.
Since identical issues and facts are involved in these appeals, they are heard together and disposed of by this common order.
For the sake of convenience and clarity the facts relevant to the appeal bearing for AY 2014-15 are stated herein.
& 641/Coch/2025 St. Josephs Eucational and Charitable Trust 4. Brief facts of the case are that the appellant is a charitable trust registered u/s. 12A of the Income Tax Act, 1961 (the Act). No return of income u/s. 139(1) was filed for AY 2014-15 by the appellant. However, the appellant trust had filed return of income in response to notice u/s. 148 of the Act dated 15.12.2021. Against the said return of income, the assessment was completed by the National Faceless Assessment Centre, Delhi (hereinafter called "the AO") vide order dated 19.03.2022 u/s. 147 r.w.s. 144B of the Act at Nil income. Subsequently, the assessing authority had initiated penalty proceedings u/s. 272A(2)(e) of the Act by issuing show cause notice dated 18.09.2022 for non filing of return of income for AY in question within the prescribed time u/s. 139(1) of the Act. In response to the show cause notice, it is submitted that filing of return of income is not compulsory in the absence of any taxable income. However, rejecting the above contention the AO had proceeded with levy of penalty of Rs. 2,57,100/- u/s. 272A(2)(e) of the Act for non filing of the return of income.
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the levy of penalty.
Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.
The learned counsel for the assessee submits that for the year under consideration filing of return of income u/s. 139(1) was not & 641/Coch/2025 St. Josephs Eucational and Charitable Trust compulsory in the absence of taxable income. It is further submitted that even in the assessment made pursuant to the notice u/s. 148, no additions were made by the AO. The income was assessed at Nil income. Therefore, no prejudice was caused to the Revenue and levy of penalty is unjustified.
The learned Sr. DR opposed the above submissions.
We have heard the rival contentions and perused the material available on record. The only issue that arises for our consideration is whether the CIT(A) was justified in confirming levy of penalty u/s. 272A(2)(e) of the Act. Admittedly, there was no taxable income for the year under consideration. Even in the assessment made pursuant to notice u/s. 148 of the Act, it resulted in Nil assessed income. Thus, these facts demonstrate that there was no taxable income in the hands of the appellant trust for the year under consideration. Provisions of Income Tax does not mandate that filing of return of income is mandatory in the absence of taxable income and, therefore, we are of the considered opinion that levy of penalty for non filing of return of income u/s. 139(1) of the Act is not warranted and accordingly, we direct the AO to delete the penalty levied u/s. 272A(2)(e) of the Act.
Since identical issues and facts are involved in assessee’s appeal our findings in shall apply mutatis mutandis to this appeal also.
Order pronounced in the open court on 31st October, 2025.