CHHATTISGARH SABRI SEWA SANSTHAN,SARGUJA (C.G) 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.30/Rpr/2015 Assessment Year : 2009-2010

Chhatisgarh Sabri Sewa Vs. JCIT, Range, Korba Sansthan, Bazarpara, PO: Lakhanpur, Sarguja. PAN/GIR No.AAAAC 3370 Q (Appellant) .. ( Respondent)

Assessee by : Shri G.S.Agarwal, AR Revenue by : Shri O.P.Chaudhury, DR

Date of Hearing : 17/01/ 2018 Date of Pronouncement : 18 /01/ 2018

O R D E R Per Pavan Kumar Gadale, JM This is an appeal filed by the assessee against the order of the CIT(A)

dated 20.10.2014 of the CIT(A)-Bilaspur for the assessment years 2009-10.

penalty u/s.272(A)(2)(e) of the I.T.Act, 1961 of Rs.41,100/- for the

assessment year 2009-2010.

well as u/s.12AA of Income Tax Act, 1961 and claims deduction u/s.11 & 12

of the Act. The penalty proceedings were initiated under section 272A(2)(e)

for the year under consideration on the ground that the assessee had filed

the return of income late by 411 days for the assessment year. The

explanation of the assessee was that the income of the assessee is below

taxable limit and, therefore, 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 return of income. This explanation was not accepted by

the Assessing Officer and, accordingly, penalty of Rs.41,100/- was imposed

by the Assessing Officer u/s.272A(2)(e) of the I.T.Act, 1961.

held that 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 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 year under

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

before the Tribunal.

4.1 We have heard the rival submissions, perused the orders of lower

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, on

the advice of the counsel, 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 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 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 return of income. Therefore, we cancel the penalty of Rs.41,100/-

imposed by the Assessing Officer.

Order pronounced on 18 /01/2018.

Sd/- sd/- (N.S Saini) (Pavan Kumar Gadale) ACCOUNTANT MEMBER JUDICIALMEMBER Raipur; Dated 18 /01/2018 B.K.Parida, SPS

Copy of the Order forwarded to : 1. The Appellant : Chhatisgarh Sabri Sewa Sansthan, Bazarpara, PO: Lakhanpur, Sarguja 2. The Respondent. JCIT, Range, 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