M/S ROTARY CHARITABLE TRUST,DAKSHINA KANNADA vs. JOINT COMMISSIONER OF INCOME TAX (E) RANGE, HUBLI

Under the provisions of section 139(4A) of the Act, every assessee which has receipts of income derived from property held under trust or other legal obligation has to file Return of income irrespective of its tax liability, if its income exceeds maximum amount & 2614/Bang/2018 Page 2 of 5 which is not chargeable to income-tax, before giving effect to the provisions of sections 11 and 12 of the Act. The abovesaid provisions read as follows: “139(4A) Every person in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or in part only for such purposes, or of income being voluntary contributions referred to in sub- clause (iia) of clause (24) of section 2, shall, if the total income in respect of which he is assessable as a representative assessee (the total income for this purpose being computed under this Act without giving effect to the provisions of sections 11 and 12) exceeds the maximum amount which is not chargeable to income- tax, furnish a return of such income of the previous year in the prescribed form and verified in the prescribed 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).” Admittedly, there was a delay in filing the return of income by the assessee, though it is undisputed that the income of the assessee was not chargeable to tax in view of the provisions of section 10(23C)(iiiad) of the Act in both the assessment years. For assessment year 2013- 14, the due date for filing return of income was 30/9/2013 but the return of income was filed on 6/12/2016. For assessment year 2014- 15, due date for filing return of income was 30/9/2015 but the Return of income was filed on 16/12/2016.

We head the rival submissions. The learned counsel for assessee placed reliance on the decision of the Bengaluru Bench of Tribunal in the case of HTSL Community Service Trust Vs. JDIT(Exemptions) (2012) 52 SOT 144 (Bangalore)(URO) wherein on identical reason, penalty-imposed u/s 272(A)(2)(e) was deleted by the Tribunal. The following were the relevant observations of the Tribunal: “In the instant case, the assessee was under a bona fide impression for not filing the return of income within the prescribed time-limit. 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. During the year preceding the relevant assessment year, the assessee-trust was formed. The relevant previous year was the first year of activities of the assessee and the assessee was not familiar with the relevant provisions of filing of return of income and the procedure involved thereof. It was under a bona fide belief that the return is to be filed only after securing recognition under section 80G. However, on being appraised of the provisions of law, return was filed without any further delay. Since the entire income was applied towards the charitable activities, no tax was payable for the relevant assessment year. As a result of late filing of the return, 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 reasonable cause for the delay in furnishing the return of income. [Para 8.4] In view of the above, the assessee trust is not liable for penalty under section 272A(2)(e) for delay in filing the return of income. [Para 8.5]”