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TMI Blog2021 (5) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... e by: Smt. Monisha Choudhary(JCIT) ORDER PER: SANDEEP GOSAIN, J.M. This appeal has been filed by the assessee against the order of the ld. CIT(A)-3, Jaipur dated 06/09/2019 for the A.Y. 2010-11 wherein following grounds have been taken. 1. The impugned penalty order u/s 272a(2)(e) dated 02/11/2018 as well as notices are bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same may kindly be quashed. 2. The ld. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the imposition of penalty of ₹ 2,53,700/- u/s 272A(2)(e) invoked by the ld JCIT. The penalty so imposed and confirmed by the ld. CIT(A) being totally contrary to the provisions of law and facts on the record and hence the same may kindly be deleted. 3. The appellant prays your honors indulgence to add, amend or alter all or any of the grounds of the appeal on or before the date of hearing. 2. The hearing of the appeal was concluded through video conference in view of the prevailing situation of Covid-19 Pandemic. 3. There is delay of 132 days in filing this appeal, for which the assessee filed an applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l justice to parties by disposing of matters on 'merits'. The expression sufficient cause' employed by the legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner which subserves the ends of justice-that being the life-purpose of the existence of the institution of Courts. It is common knowledge that this Court has been making a justifiably liberal approach in matters instituted in this Court. But, the message does not appear to have percolated down to all the other Courts in the hierarchy. The said judgment is a leading case on the subject and has a binding force on all the officers subordinate thereto. 7. The action or inaction by an assessee, on the advice of its counsel, whether correct or incorrect, if caused a delay, has been held to be reasonable and sufficient cause in these cases also. Kindly refer N. Balakrishnan v. M. Krishna Murthy(1998) 7 SCC 123 published in 30 BCAJ 922, Concord of India Insurance Co. Ltd. v. Smt. Nirmala Devi and Anothers 118 ITR 507 . That it is also settled that for the mistake of the Counsel, the party cannot be suffered. Reliance on Mahaveer Prasad Jain v/s CIT, 172 ITR 331(MP), C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limitation in the underhand way. If the party who is seeking condonation of delay has not acted in malafide manner and reasons explained are factually correct then the Court should be liberal in construing the sufficient cause and lean in favour of such party. A justice-oriented approach has to be taken while deciding the matter for condonation of delay. However, this does not mean that a litigant gets free right to approach the court at its will. 6. If we apply the settled principles as laid down by the Hon ble Supreme Court as well as other courts on the facts of the present case we find that the assessee has explained cause of delay, therefore, in the facts and circumstances of the case, we condone the delay of 132 days in filing the present appeal and admit the appeal for hearing. 7. The brief facts of the case are that as per the revenue, the assessee trust was required to file its return of income U/s 139(4C)(e) of the Act by 31/07/2010 for the year under consideration. However, return in this case was filed on 12/07/2017, thus, it was late by 2537 days. Accordingly, after issuing show cause notice and providing opportunity of hearing, penalty U/s 272A(2)(e) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the case of Shri Bhandup Jain Temple vs. DDIT (1995) 14 CCH 0307 MumTrib (1996) 54 TTJ 0104 It has been held that Penalty under s. 272A(2)(e)-Leviability-Assessee a trust registered as charitable trust enjoying tax exemption-Its belief that it will not be liable to penalty if its return is filed belatedly is bona fide-At the same time, view taken by the CIT(A) also supports the penalty-Two views being possible, one in favour of assessee to be preferred-Penalty cancelled.-CIT vs. Vegetable Products 1973 CTR (SC) 177: (1973) 88 1TR 192 (SC) applied 2. Technical breach only: Alternatively and without prejudice to our other submission, even assuming some default was there, the same at the best was a merely technical and venial breach of law and the conduct of the assessee has not been shown to be contumacious. No deliberate defiance of law is established. It has been held that by the Honble Supreme Court in the case of Hindustan Steels v/s State of Orisa 83 ITR 26 (SC). That in order to impose penalty for failure to carry out a statutory obligation is the result of quasi criminal proceedings and penalty will not ordinarily be imposed, unless the party obliged either acted de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isite for filing the return of income-However, immediately on being appraised, the income tax returns were filed for all the years without any further delay-The delay in filing the return was not intentional or deliberate-Since the entire income was applied towards the charitable activities, no tax was payable for the assessment year under consideration-As a result of late filing of the return, there was no loss of revenue to the Government-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-Hence, assessee trust not liable for penalty u/s 272A (2) (e) of the Act for delay in filing the return of income In the case Vatavaran Trust vs. JDIT (EXEMP.) (2006) 25 CCH 0093 DelTrib (2006) 104 TTJ 0129 Penalty under s. 272A(2)(e)-Failure to file return under s. 139(4A)-Reasonable cause-There being excess of expenditure over income in all the assessment years, assessee's belief that it was not obliged to file return under s. 139(4A) was bona fide and this constituted reasonable cause-Penalty under s. 272A (2) (e) was not therefore, levia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO has also not imposed and initiated any penalty proceeding u/s 271F. Which shows contradictory approach of the AO/JCIT because there is provision of Sec. 271 F for non filling of the return in due time. 4. View favorable to the assessee: Further it is also settled that if case both the side has been referred then it is the settled legal position that to remove the undue hardship and considering the decision of supreme Court in case of CIT Vs. Vegetable Products Ltd. 88 ITR 192 (SC) where it is held that when two views are possible on an issue, the view in favour of the assessee has to be preferred. And also many High court also held the same. 11. On the other hand, the ld DR has vehemently supported the orders of the revenue authorities. 12. We have heard the ld. DR and have also gone through the written submissions filed by the assessee. We have also deliberated upon the decisions cited in the orders passed by the authorities below as well as cited before us and we have also gone through the orders passed by the revenue authorities. As per facts of the present case, as per the Revenue, the assessee was required to file its return of income U/s 139(4C)(e) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore and thus falls U/s 10(23C)(iiiab) of the Act. Therefore, the entire income of the assessee was exempt and as per provisions of Section 139(4C)(e) of the Act the person is required to file the return where its income exceeds the maximum amount which is not chargeable to income tax. However, in this case, the assessee has filled its return of income declaring the nil income and assessment has also 'been completed at nil income vide assessment order dated 25.12.2017 u/s 143((3)/148 of the Act in the status of educational institution. The assessee was not required to file the return on or before 31.07.2010 and thus, in this way, no penalty could have been imposed u/s 272A(2)(e). In the case of Akali Baba Phool Singh Educational Trust vs. DDIT (EXEMPTION) (2010) 29 CCH 0679 Del Trib/(2011) 43 SOT 0700 wherein it was as under: Penalties-Non-filing of returns under s. 273B-Assessee was under the bona fide belief that its incomes is exempt under s. 10(23C)(iiiab) and was not required to file return of income-As per provisions of sub-cl. (iia) of subs. (24) of s. 2, it is found that reference has been made to various other clauses of sub-s. (23C) of s. 10 but no reference has b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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