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2012 (4) TMI 152 - AT - Income TaxDelay in filing return - Public Charitable trust U/S 12A - also secured recognition under section 80G(5)(vi) - levy of penalty under section 272A(2)(e) for not filing the return of income within the due date as prescribed in section 139 - assessee in reply stated that the appellant was under a bonafide belief that recognition under section 80G would be a pre-requisite for filing the return of income assessee contented that preoccupation on account of the trusties for meeting the obligations to secure recognition and this was the first year of operation of the trust thus the delay in filing the returns was not intentional Held that - On being appraised the correct provisions of law, return of income was filed immediately without any further delay there was no loss to the revenue as a result of late filing of the return and there was no ulterior motive to defraud the revenue - Penalty may be imposed under section 272A(2)(e) for failure, an attempt of deliberateness or deceptiveness, to furnish the return of income - Penalty cannot be levied under section 272A(2)(e) if there exists sufficient or reasonable cause for the default - Reasonable cause as applied to human action is that which would constrain a person of average intelligence and ordinary prudence - appeal filed by the assessee is allowed in favour of assessee.
Issues Involved:
Penalty under section 272A(2)(e) for delay in filing the return of income. Detailed Analysis: Issue 1: Background and Facts The appellant, a Public Charitable trust, was formed in 2003 and engaged in charitable activities. It was granted registration under section 12A and recognition under section 80G of the Income Tax Act. The return for the assessment year 2004-05 was filed late, leading to penalty proceedings under section 272A(2)(e). Issue 2: Penalty Imposition The Joint Director of Income Tax levied a penalty of Rs. 50,600 under section 272A(2)(e) for the delay in filing the return. The appellant explained the delay was due to a bonafide belief that recognition under section 80G was required before filing the return. The penalty was calculated at Rs. 100 per day for the delay period. Issue 3: Appeal to CIT(A) The appellant appealed to the CIT (A) against the penalty imposition. However, the CIT (A) upheld the penalty, stating there was no reasonable cause for the delay in filing the return, leading to the dismissal of the appeal. Issue 4: Appeal to ITAT The appellant further appealed to the ITAT, arguing that being the first year of operation, they were not familiar with the filing procedures and believed recognition under section 80G was a prerequisite. The appellant contended that there was no deliberate or deceptive intent in the delay. Issue 5: ITAT Decision The ITAT considered the submissions and legal precedents regarding "reasonable cause" for delay in filing. Referring to various court judgments, including the Delhi High Court and the Supreme Court, the ITAT concluded that the delay was due to a genuine belief and lack of familiarity with the procedures. The ITAT found no dishonest or negligent behavior on the appellant's part and noted that no tax was payable for the assessment year due to charitable activities. Therefore, the ITAT held that there was a reasonable cause for the delay and ruled in favor of the appellant, setting aside the penalty under section 272A(2)(e). Conclusion The ITAT allowed the appeal filed by the assessee, determining that the trust was not liable for the penalty under section 272A(2)(e) for the delay in filing the return of income.
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