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2021 (12) TMI 536 - AT - Income TaxLevy of penalty u/s. 272A(2)(e) - assessee did not voluntarily file its return of income within the time limit prescribed under the Income Tax Act - Proof of deliberateness or deceptiveness in not filing the return of income - HELD THAT - We find that assessee has submitted reasonable cause for the delay and placed reliance upon several case laws in support of these both before the AO as well as CIT(A). None of them have been dealt with by the AO or CIT(A). This is complete disregard of judicial discipline. It is noted that in the case of HTSL community Service Trust 2012 (4) TMI 152 - ITAT BANGALORE has held that an attempt of deliberateness or deceptiveness is the associated with word failure - also in the case of Vatavaran Trust 2006 (2) TMI 225 - ITAT DELHI-I and held that there was excess of expenditure over income in all assessment years, assessee s belief that it was not obliged to file return of income u/s. 139(4A) was bona fide and this constituted reasonable cause, hence penalty u/s. 272(A)(2) (e) is not leviable. We are of the considered opinion, there was a reasonable cause for the assessee for the delay and the case laws referred above are duly applicable. Hence, in the background of aforesaid discussion and precedent, we set aside the orders of the authorities below and delete the penalty. We find that assessee s plea in the present case duly falls under the ken of aforesaid case laws wherein similar penalty has been deleted. No contrary decision has been produced before us. As held by Hon ble Supreme Court in Motilal Padampat Sugar Mills' 1978 (12) TMI 45 - SUPREME COURT that there is no presumption that everyone known law. - Decided in favour of assessee.
Issues Involved:
1. Delay in filing the appeal. 2. Levy of penalty under section 272A(2)(e) for various assessment years. 3. Reasonable cause for the delay in filing the return of income. 4. Applicability of section 139(4A) and section 10(23C) of the Income Tax Act. 5. Judicial precedents and case laws cited by the assessee. Issue-wise Detailed Analysis: 1. Delay in Filing the Appeal: The appeals were delayed by 121 days due to a change in counsel. The assessee claimed that the filing fee had been paid on time, but the delay occurred because the previous counsel left the university, and a new counsel was being appointed. The tribunal condoned the delay after considering the reasons provided. 2. Levy of Penalty Under Section 272A(2)(e): The penalty amounts for the assessment years 2006-07 to 2011-12 were noted. The assessee did not file its return of income within the prescribed time limit and was issued a notice under section 148. The AO initiated penalty proceedings under section 272A(2)(e) due to the delay of 1060 days in filing the return for AY 2006-07. 3. Reasonable Cause for the Delay in Filing the Return of Income: The assessee argued that the delay was due to the complex and tedious process of compiling accounts from multiple locations and the honest belief that its income was exempt under section 10(23C). The AO rejected these explanations, stating that the university, being a large institution, should have been aware of its obligations and that the delay of 35 months was unjustifiable. 4. Applicability of Section 139(4A) and Section 10(23C) of the Income Tax Act: The assessee contended that section 139(4A) was not applicable as the university was not a charitable trust and its income was exempt under section 10(23C)(iiiab). The requirement for universities covered by section 10(23C)(iiiab) to file returns was introduced by the Finance Act, 2015, effective from AY 2016-17. Therefore, there was no mandatory requirement to file returns for the years under consideration. 5. Judicial Precedents and Case Laws Cited by the Assessee: The assessee relied on several case laws to support its claim of reasonable cause: - Shyam Gopal Charitable Trust vs. DIT(E): Reasonable cause for failure to file returns within stipulated time. - Akali Baba Phool Singh Educational Trust vs. DDIT(E): Bona fide belief that income was exempt and not required to file returns. - HTSL Community Service Trust vs. Joint Director of Income Tax (Exemption): No deliberateness or deceptiveness in not filing returns. - Vatavaran Trust vs. Joint Director of Income Tax (Exemption): Bona fide belief that it was not obliged to file returns. - Hindustan Steel Ltd. vs. State of Orissa: No penalty should be imposed for technical or venial breaches of the law. The AO and CIT(A) did not adequately address these case laws or the reasonable cause provided by the assessee. The tribunal found that the assessee's plea fell under the precedents where similar penalties had been deleted. The tribunal noted that there is no presumption that everyone knows the law and that the assessee's belief was bona fide. Conclusion: The tribunal concluded that there was a reasonable cause for the delay in filing the returns and that the case laws cited by the assessee were applicable. The orders of the authorities below were set aside, and the penalty was deleted. The same decision applied to all related appeals for the subsequent assessment years. The appeals by the assessee were allowed.
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