SHEETAL ANUSANDHAN AND GRAMIN VIKAS SANSTHA,AMBIKAPUR (CG) vs. JOINT. CIT, RANGE- KORBA, KORBA(CG)

IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR

BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER

ITA Nos.146 & 147/Rpr/2014 Assessment Years : 2008-09 & 2009-2010

Seetal Anusandhan & Vs. JCIT, Korba Gramin Vikas Sansthan, Ambikapur PAN/GIR No.AAFTS 2990 E (Appellant) .. ( Respondent)

Assessee by : Shri S.R.Rao, AR Revenue by : Mrs Sheetal Verma, DR

Date of Hearing : 12/01/ 2018 Date of Pronouncement : 15 /01/ 2018

O R D E R Per Pavan Kumar Gadale, JM Both the appeals filed by the assessee are directed against separate

order of the CIT(A) both dated 8.10.2012 of the CIT(A)-Bilaspur for the

assessment years 2008-09 & 2009-2010.

penalty u/s.272(A)(2)(e) of the I.T.Act, 1961 of Rs.15,700/- for the

assessment year 2008-09 and Rs.18,100/- for the assessment year 2009-

2010.

well as u/s.12A of Income Tax Act, 1961. The society is solely engaged in

imparting education and medical /health camp through its institutions. The

penalty proceedings were initiated under section 272A(2)(e) for the years

under consideration on the ground that the assessee had filed the return of

income late by 157 days for the assessment year 2008-09 and 181 days for

the assessment year 2009-2010. The explanation of the assessee was that

the activity of the society is imparting education and since receipts of the

years under consideration were less than Rs.1 crore, the income is exempt

u/s.10(23C) (iiiad) of the Act, the society was under bonafide belief that it

is not obliged to file return of income and as such no penalty can be levied

for delay in filing the returns. This explanation was not accepted by the

Assessing Officer and, accordingly, penalty of Rs.15,700/- for the

assessment year 2008-09 and Rs.18,100/- for the assessment year 2009-

2010 was imposed by the Assessing Officer u/s.272A(2)(e) of the I.T.Act,

1961.

held that the assessee-society is exempt under section 10(23C)(iiiad) of the

Act. As per the trust deed, there is a managing committee to hold the assets

of the society on behalf of its members. It was held that the assessee

society has not pleaded any reasonable cause for delay in filing the return of

income before the Assessing Officer in true sense within the meaning of

section 273B of the Act. The society is availing benefits of exemption u/s.11

& 12 of the Act and the bonafide of belief that it is not required to file

income tax return is based on registration granted under the aforesaid

section, which lays down fulfillment of certain conditions including auditing of

account books and filing of return u/s.139(4A) every year. The books of

accounts of the year were audited. Therefore, it cannot be inferred that the

assessee society is not required to file income tax returns. Since the

assessee society has filed income tax return late, the CIT(A) confirmed the

levy of penalty imposed by the Assessing Officer for the assessment years

under consideration. Aggrieved by the same, the assessee society is in

appeals before the Tribunal.

authorities and materials available on record. Penalty may be imposed under

section 272A(2)(e) for failure to furnish the return of income in accordance

with the provisions of section 139(4A) rws 139(1) of the Act. In the present

case, there was no deliberateness in not filing the return of income within

the prescribed time limit. The assessee society was under a bonafide belief

that since the income of the society is exempt, it is not required to file

income tax return. However, when it came to the knowledge of the

assessee society that it is required to file income tax return, immediately,

the society filed the same. Penalty cannot be levied under section

272A(2)(e) if there exists sufficient or reasonable cause for the default. The

meaning of the term "reasonable cause" as enunciated by the Hon'ble Delhi

High Court in the case of Azadi Bachao Andolan v Union of India 252 ITR 471

reads as follows:-

"Reasonable cause can be reasonably said to be a cause which prevents a man of average intelligence and ordinary prudence, acting under normal circumstances, without negligence or inaction or want of bona fides".

State of Orissa (83 ITR 26) held as follows:-

"An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard to its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty when there is a technical or venial breach of the provision of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute".

impression/belief for not filing the return of income. 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. As a result of late filing of the returns, 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 sufficient/ reasonable cause for the delay in furnishing

the return of income.

not liable for penalty under section 272A(2)(e) of the Act for delay in filing

the returns of income. Therefore, we cancel the penalty imposed by the

Assessing Officer for both the years under consideration.

Order pronounced on 15/01/2018.

Sd/- sd/- (N.S Saini) (Pavan Kumar Gadale) ACCOUNTANT MEMBER JUDICIALMEMBER Raipur; Dated 15 /01/2018 B.K.Parida, SPS

Copy of the Order forwarded to : 1. The Appellant : Seetal Anusandhan & Gramin Vikas Sansthan, Ambikapur 2. The Respondent. JCIT, Korba 3. The CIT(A)-Bilaspur 4. Pr.CIT-Bilaspur 5. DR, ITAT, Raipur 6. Guard file. //True Copy//

BY ORDER,

SR.PRIVATE SECRETARY ITAT, Raipur