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TMI Blog2016 (9) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... year under consideration that the assessee realized that the exemption is not available. It was during the assessment proceedings for Assessment Year 2004-05 that assessee realized the exemption being not available vide assessment order for the Assessment Year 2004-05 where the Ld. A.O. rejected the assessee’s claim. From the facts of the case, it does not appear that the assessee has deliberately abstained itself from presenting such application in time. In the application dated 31.10.2006 assessee has also claimed for condonation of delay and has requested for registration to be granted w.e.f. 01.04.1999. Considering the above facts, we are of the opinion that the imposition of penalty u/s 271(1)(c) is not justified as there was compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income on the presumption that DIT(E) will grant the registration u/s 12AA of the Act with retrospective effect. 2.2 Ld. A.O. disallowed the exemption u/s 11 as the same was not available to the assessee for the year under consideration. He completed the assessment at ₹ 10,80,323/-. The Assessing Officer also levied 100% penalty for the addition made during the assessment proceedings. Aggrieved by the levy of penalty, the assessee preferred an appeal before Ld. CIT(A). Ld. CIT(A) held as under: 2.2. I have considered the penalty order of the AO and the submissions of the assessee and I do not find any merit in the submissions of the assessee. The assessee did not apply for registration u/s 12AA which it was required w.e.f A.Y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty as defined under the Act. Ld. A.R. submitted that he assessee was under bona fide belief that it is entitled for exemption u/s 11/12AA of the Act as the application dated 31.10.2006 was filed seeking registration with retrospective effect from Assessment Year 1999-2000. Ld. A.R. submitted that as the application was pending as on the date of filing of return for the year under consideration and that no response was issued in response to the same within six months of filing of the application, it was under bona fide belief that the exemption has been deemed to be allowed to the assessee. Ld. A.R. submitted that it had also raised the claim u/s 11 of the Act in the return filed for the year under consideration for the reason that in the ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght as both the application as well as the return, are even dated. Ld. D.R. thus submitted that the assessee has filed inaccurate particulars of income and thus, is covered under Explanation 1A to 271(1)(c) of the Act. 5. We have perused the records before us and the submissions advanced by both the parties. It is observed that the assessee was registered under Societies Registration Act in the year 1968. The assessee was also granted exemption u/s 10(22) of the Act vide order dated 27.01.1994 issued by the Director of Exemption, the exemption u/s 10(22) was available to the assessee till Assessment Year 1998-99 as Section 10(22) stood deleted w.e.f. Assessment Year 1999-2000. From the records placed before us, it is observed that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section be deemed to represent the income in respect of which particulars have been concealed. 31. After insertion of Explanation 1 to Section 271(1)(c), the law on concealment and penalty has become stiffer. The explanation as it stands now is a complete code having the following features: (1) Every difference between reported and assessed income needs an explanation. (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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